What are code split rules?
Certain farm expenses have a percentage of GST that is claimable as a business expense, while the remainder is a personal portion.
Code split rules automate the splitting of these transactions, saving you time and ensuring accuracy and consistency.
In addition, code split rules can be used to split a single coded line into multiple codes or tags.
NOTE: Before you get started, we strongly recommend you have a conversation with your accountant about the portion of business GST you can claim on farmhouse expenses.
Select a code to automatically split
In the Settings screen:
Select Codes.
Click on Code split rules.
3. In the code split rules screen, select Add new rule.
4. Type in the category and extended code you want to split.
TIP: Start typing the word that the code relates to i.e. 'House' and Farm Focus will filter the code list for easy selection.
Create the code split rule
Enter the details of the code split rule as outlined below:
The category and extended code used for the first line of your code split rule
The GST type that applies to this rule
A description for your reference
If you use tags you can enter these for more in-depth business analysis
The percentage for the selected split
A new line will be created for you until the total reaches 100%. Follow these steps for any further split lines (up to six lines).
Click Save. You’re all done!
What happens now?
Every time you use this code Farm Focus will split your transaction or invoice line for you.
Common Code Split Rules
GST and house electricity
As a general rule, if you work on farm you can claim 20% of your household electricity bill as a farm/business expense.
To claim GST on house electricity, split the GST into two parts:
20% of the expense is tax-deductible, so you can claim it with a Business GST type.
The remaining 80% is non-deductible, so record it as a Personal GST type.
This is best achieved by creating a code split rule. Go to:
Settings > Codes > Code split rules and set it up as follows:
This is generic advice and you need to consult your accountant on your personal circumstances.
GST and entertainment and alcohol
Some entertainment expenses are 50% tax deductible, while others are fully deductible.
50% Deductible | 100% Deductible |
Staff party on or off the business premises | Providing morning tea or afternoon tea for your team |
Drinks for team members at a bar | Catering a team lunch in the office |
Taking team members out for lunch | Gifting restaurant vouchers to staff members |
To claim GST on entertainment expenses, split the GST into two parts:
50% of the expense is tax-deductible, so you can claim it with a Business GST type.
The remaining 50% is non-deductible, so record it as a Personal GST type.
This is best achieved by creating a code split rule. Go to:
Settings > Codes > Code split rules and set it up as follows:
This is generic advice and you need to consult your accountant on your personal circumstances.
GST and the telephone and internet
As a general rule, if you work on farm you can only claim 20% of your household telephone and internet bill as a farm/business expense.
To claim GST on telephone and internet, split the GST into two parts:
20% of the expense is tax-deductible, so you can claim it with a Business GST type.
The remaining 80% is non-deductible, so record it as a Personal GST type.
This is best achieved by creating a code split rule. Go to:
Settings > Codes > Code split rules and set it up as follows:
This is generic advice and you need to consult your accountant on your personal circumstances.
More information