With the upcoming GST hike from 8% to 9% in 2024, here’s what you need to do to manage this change if you are an existing user of Xero:
1. Change the default rate
From 5th December 2023, Xero will provide the option for you to update the default rate to 9%. The former 8% rate will have a differentiating indicator and will state ‘2023’ for your ease of use.
2. Update your default rate in your Chart of Accounts
On 1st January 2024, Xero will have a new button appearing on top of the Chart of Accounts page labelled as ‘Update to 9% defaults’.
Select ‘Update’ on the prompted pop-up to change the GST rate on your contacts, inventory items and accounts. If you have more than one Xero organisation, you will need to separately update each one individually.
Do take note that if you do not complete the above update by 7th February 2024, Xero will automatically do it for you within the system.
3. Implement the new rate
Other than the Chart of Accounts, you will still need to update the rates manually for:
- Bank Reconciliation
- Automated bank rules and apps which you may have connected from the Xero App store or other providers
- Repeating invoice templates (especially those set to ‘Approve to send’) and repeating bill templates
- Draft transactions dated from 1st January 2024 (including invoices, bills and manual journals)
- If you use Hubdoc, you will need to update the default tax rate, which will apply to any new suppliers moving forward. For existing suppliers, you will need to update the tax rate information on a supplier level.
If you want to learn more on the GST hike and find out about the different scenarios that you may encounter, join us at our webinar on 5th January 2024 from 2:30 pm to 4:30 pm. We will share how to manage the GST rate change, as well as provide you with more insights as to how grants and cybersecurity solutions can improve the operations and productivity of your business.