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_emiec(Initiate)Initiate
27 Apr 2021

Hi,

A migration lawyer is required a client to sign a contract in which it detailed the disbursements and installments of service fee. According to the legal requirement, the money received from the client including the disbursements and service fee must be kept in a trust account until the service is completed or an invoice is issued. Client is asked to pay in advance for the disbursements and part of the service fee before the job is processed. I would like to know when the GST of the service fee should be reported on cash basis. Should it be at the time the money is banked in the trust account but the lawyer has no right to access the money or at the time the service is completed. Thanks in advance

1,116 views
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1,116 views
3 replies

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Most helpful reply

CaroATO(Community Support)Community Support
28 Apr 2021

Hi @emiec,

I have a great appreciation on how you thought about this scenario.

When using the cash accounting method you account for the GST when you receive payment.

Generally an invoice would be issued once a taxable sale has been completed and then the client pays.

The lawyer will be paid once the taxable sale in the form of a service is completed, therefore they will account for the GST at this time.

We have some fantastic information on our website about using the cash accounting method and invoicing.

Take care and stay safe.

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Most helpful reply

CaroATO(Community Support)Community Support
28 Apr 2021

Hi @emiec,

I have a great appreciation on how you thought about this scenario.

When using the cash accounting method you account for the GST when you receive payment.

Generally an invoice would be issued once a taxable sale has been completed and then the client pays.

The lawyer will be paid once the taxable sale in the form of a service is completed, therefore they will account for the GST at this time.

We have some fantastic information on our website about using the cash accounting method and invoicing.

Take care and stay safe.

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