Weymouth Reader Krishan Kumar had raised the following query:
I want to know whether we can claim GST for goods purchased on barter card points (Trade Money) from the GST return for cash money.
Inland Revenue Community Relationships Advisor Abdul Rafik responds:
You can exchange goods and services for other goods or services, or a combination of goods, services and money – this is barter.
If the exchange is for other goods and services, you must account for 3/23 of the open (current) market value of whatever you received in return for your supply.
When part of the exchange is money, you must include (a) 3/23 of the open (current) market value of the goods and services you received, as an adjustment in Box 9 of your GST return and (b) the money received in Box 5 of your GST return.
Use this rule whichever GST accounting basis is applicable to you.
You might also receive goods and services in full (or part exchange) for your supplies from another person.
Between both of you, work out a dollar value for the exchange (for example, a trade-in). You must include this agreed value plus any money involved, in Box 5 of your GST return.