Expenses

An invoice is an itemised list of goods/ services to be sold that includes the price and any terms of the sale. They are particularly important for organisations as they need to track what is being purchased and sold and use these documents to calculate any tax or other meet other legal obligations. 

Why do I need to provide a tax invoice to Old Nick Company?

The way to think about this is you are a 'supplier' supplying your services as a cast member to the Old Nick Company and you are submitting an invoice to request reimbursement for your expenses incurred due to participating in the show.

Old Nick:

• Cannot send money out of its accounts without having a formal record of the transaction (IE an invoice)

• Will need your bank details in writing

• Must withhold 47% tax unless you have quoted a valid Australian Business Number 'ABN' - don't panic - more on this below!

Many cast members will not have an Australian Business Number (ABN). The ATO has a form specifically for this purpose but it can only be used in some circumstances. 

The ATO website states -

Payers (Old Nick) may request a written statement from the supplier (Cast Members) to justify not withholding (tax) if the supply either:

• relates to a private recreational pursuit or hobby – for example, a hobby artist receives a prize of $100 in a shopping centre art show, or

• is wholly of a private or domestic nature for the supplier – for example, a home owner sells some personal furniture to a second-hand store

As a minimum, the statement should contain the following:

• the supplier's name and address

• why it was not necessary to withhold

• the supplier's signature

A Statement by a supplier form can be used for this purpose. 

So that's why we usually need the form as well as the invoice!