Snippets February 2022

Online reviews - what might they reveal

Engaging with customers is always important and in the current environment, online interaction with customers has become exponentially relevant. In a 2017 survey, 87% of people said that a business needed an online rating of at least 3 stars for them to use the business, and 84% trusted online reviews as much as a personal recommendation. The same survey reported that on average, one negative review can cost a business 30 customers.

However, sometimes online reviews are not always as they appear. A review by a Texas man on Speartip Security Services’s (‘Speartip’) Google page was made just days before multiple arrests were made. The review read as follows:

“Speartip is very professional and on top of it. They get the job done in an expedited time. Couldn’t imagine using anyone else!!” To which Speartip responded: “Thank you for the kind words. Always a pleasure working with you.”

Although the interaction appears innocent enough, the reviewer was apparently referring to assistance in helping orchestrate a double murder, involving the review writer’s former girlfriend and her current partner.

An individual who was also suspected of being involved with the murders had left a review on Speartip’s Google page eight months earlier, praising the business for being “very professional” and for responding quickly to their concerns and “immediately” covering their needs.

Next time you’re reading a customer review, there might actually be more than meets the eye.

Common error - claiming GST on FBT

For those of you who prepare and file FBT returns on behalf of a GST-registered employer, you will be familiar with the GST on FBT adjustment that forms part of the FBT return.

The adjustment itself is straight-forward and involves calculating GST on the gross taxable benefits that are subject to GST, and including this as part of the FBT payable. However, a very common misunderstanding is that this GST amount is then able to be claimed in the GST return.

A benefit provided to an employee (e.g. a Christmas Gift) is deemed to be a taxable supply for GST purposes (akin to a sale). The GST adjustment in the FBT return is the mechanism by which the GST on the deemed supply is paid to IRD. Another way to think of it – when the employer originally acquired the Christmas gift the GST was claimed on purchase. However, because the gift is consumed privately (i.e. not used in the business) the GST shouldn’t be claimed and the GST on FBT adjustment is the mechanism to reverse the original claim.

It is common to see the words “GST” and split the total FBT payable between the two taxes for coding purposes, resulting in the GST being re-claimed in the next GST return. But this is incorrect – it is akin to claiming GST on a sale.