GST HP Reform 2012
Changes to the GST Act have recently been made by the government and will go live on the 1st July 2012.
These changes will impact our Hire Purchase product in the following way:
It will change to be a fully taxable financial supply, meaning GST will be payable on the terms charges of the contract
- Due to the increased GST this change will increase the instalment made by the customer
- Cash basis taxpayers will be able to claim input tax credits upfront, similar to a Chattel Mortgage
- All fees and charges will now include GST
- To see the AFC submission for more information, click here
These changes will not have an impact on Hire Purchase agreements settled prior to 1 July 2012, unless those agreements are amended in such a way that a new agreement is executed (e.g. variation agreement).
We are currently working on updating CapitalQuote to support the new changes to the Hire Purchase product.
For Hire Purchase applications after 1st July 2012 but before the new release of a CapitalQuote, a workaround has been supplied to ensure the customer is being charged the correct amount of GST. Click the links below for the Capital Quote Bulletin, Calculator instructions and Capital Quote Calculator.
Click here to save the HP calculator to your computer. Capital Finance is providing this calculator solely to assist its brokers and dealers in calculating GST on the interest under a Term Purchase agreement settled on or after 1st July 2012 until Capital Quote is updated. The information provided is for general purposes and guidance only and does not constitute legal, tax or financial advice. It has been prepared without taking into account any specific objectives, financial situation or needs of any customer. Capital Finance takes no responsibility for any loss caused to any person who uses or downloads this calculator.