As we previously communicated in North News in March and April, the Australian Taxation Office (ATO) will be removing the ability for us to claim a Reduced Input Tax Credit (RITC) on behalf of members for Advice Fees collected by the platform, from 1 July 2024.
What’s changing?
Currently, the RITC provides your clients with a 75% discount on the GST charged on Advice Fees.
For example, when you are charging an Advice fee of $110 (inc GST) clients are currently receiving a credit of $7.50, therefore paying a net amount of $102.50.
From 1 July 2024, clients will be charged the full GST amount. In the example above, the full $110 will now be charged to your client.
While the fees you charge and collect will remain the same, the amount paid by your client for advice fees will increase by the RITC amount.
When is the change effective?
The GST charged on Advice Fees will increase for clients for all fees collected from 1 July 2024.
What are the impacts to clients?
Advice Fees collected from client accounts will increase by 7.317% due to the removal of the RITC.
What do I need to do?
We recommend you review your Advice fees and discuss the impending change with your clients.
- Read the ATO notice to familiarise yourself with this update.
- Read the FAQs to help you through this change.
More information
If you have any questions, please speak to your Business Development Manager.
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