Property insurer reverses decision in our client’s favour.
When an insurance claim is being assessed, the insurer will ask
“What percentage of Input Tax Credit (ITC) do you claim?”
For most businesses registered for GST,
the answer is 100%.
Fire partially destroyed the property of our clients.
It included commercial units downstairs and residences above. The fire was extensive but the repairs primarily related to the upper floor residences. When declaring their GST Input Tax Credit to the insurer, our client assumed that as they were registered for GST and submitted quarterly BAS, they could claim 100% GST on the costs of repairs. They therefore notified the insurer to settle net of GST.
Don’t get caught with the wrong GST advice.
When it came time to submit their quarterly BAS, their accountant pointed out that as the majority of costs related to the upstairs residences, they were not claimable on the BAS, leaving our client out of pocket tens of thousands of dollars for the GST expenses of the repairs.
So what happens if you have damage to a property that is partly GST claimable and partly not?
Precisely the case where both commercial and residential units make up a property. Just as you cannot charge GST on the rental invoices to your residential tenants, you cannot claim the GST costs of the residences on your BAS – including repairs and renovations. In addition, you cannot claim the full GST percentage of your insurance premium
How we helped reverse an insurer’s decision.
It’s very important to notify the insurer what percentage of Input Tax Credit you are able to claim on your BAS, so they can take this into account in your settlement. In this particular instance we were able to convince the insurer to amend their previous settlement and our client will not be out of pocket for this error – but without our determined effort on this, the result could have been financially very damaging.
Your accountant may save you a small fortune. For an investment property that includes
residential, your accountant can help determine what percentage of Input Tax Credit to declare
on your insurance policy and subsequently any building related claims.
That way you won’t get caught out when claiming on a policy.
We want you to understand our role and how we can support your business to choose the right insurance, save you money and disappointment when making claims. Andrew and Monique Logan
As confusion continues over the COVID-19 pandemic and what is covered,
Logans offer complimentary cover reviews for new and existing clients.
Logan Insurance | Client Stories
We have created short videos to introduce our client stories
Betta Home Living
On New Years eve 2020, Betta Home Living in Bateman’s Bay was totally destroyed by bush fire.
Adequate property insurance meant our clients could be swiftly compensated for the loss.
Bitton was founded in Alexandria, Sydney in 2000. Since then, David and wife Sohani have launched a product range of the same name, a small business consultancy, Bitton Consulting and a second café,
Bitton Oatley. A third café is opening in Rose Bay in Jan 2020.
BOOB LOOB is one of our newest clients. Their product encourages women to perform breast checks that are easy and effortless. Boob Loob is designed for women to put their mind at ease without changing their daily routine. Proudly made in Australia and every bottle purchased online means $1 dollar donated to the McGrath Foundation.
At Logans we provide cover for businesses of all types.
While they are all different in their insurance needs, Betta Home Living, Bitton and Boob Loob
all have extensive cover placed through Logan Insurance Brokers. Cover for these clients includes Public Liability, Business Interruption, Transit, Product Liability,
Theft, Fire, Machinery Breakdown and Food Spoilage.
Our clients have saved $100’s a year by combining and customising their business cover.
Our business is to know your business. Logans will always provide options for the best available cover for your business. That way disappointment is avoided when it comes to making a claim.
If you would like to see how Logans can help your business, please use the link below.
A good insurance broker will ask relevant questions and seek to keep up to date on your business needs. They will also keep up their education in new products and cover in the market, ensuring you have the broadest choices available to you.