GST Information Sheet

At Lumley all our systems have been updated and are ready to support our brokers to easily manage the transition when GST increases from 12.5% to 15% from 1 October 2010.

What the GST increase means for you

“Time of supply” is deemed to be the date of the closing (or placing slip) as we assume the customer has been invoiced or has paid you by the time we receive the closing slip.

This means:
• A closing/placing slip dated on or before 30 September 2010 attracts GST at 12.5%
• A closing/placing slip dated on or after 1 October 2010 attracts GST at 15%.

However, we understand that there may be some exceptions to this over the transition period and we request that you notify these to us on your Bordereaux.

GST Transition Rules

The following rules describe how Lumley will manage the transition period from 1 October 2010:

- Quotes

All quotes issued prior to 30 September 2010 will show the premium calculated on the quotation or policy inception date (as stated on the quotation) and show a validity period for the quote.

While the premium amount will remain for the validity period, in all cases GST will be charged at 12.5% for policies closed on or prior to 30 September 2010 and 15% for policies closed thereafter (as detailed in New Business rules below).

- New Business and Renewals (including Levies)

The date the GST is calculated will be the earlier of payment or invoice date as displayed on the closing/payment slip supplied to the insurer.  (Note that the date of the renewal notice supplied by Lumley cannot be used as it does not constitute an invoice).

All policies (renewals, new business and quotes) closed prior to 1 October 2010 will be at 12.5%. Any new business, renewals and quotes closed on or after 1 October 2010 will be at 15%.

October renewals, new business and quotes invoiced or paid prior to 1 October 2010 will attract GST at 12.5%.

- Installments

In some cases for an annual policy, policy holders may pay by installment plans.  If the annual policy is eligible for GST at 12.5%, Lumley will pay output tax at 12.5% at the start of the policy to ensure all installments remain at 12.5% GST.

Note that this rule excludes periodic policies (monthly and fortnightly) offered to direct customers.

- Endorsements

Any debit endorsement processed after 1 October 2010 will attract a 15% GST rate.
Any credit endorsement processed after 1 October 2010 will attract the GST rate applicable at the time of the original supply. For example: An item on a policy insured on a schedule before 1 October 2010, but deleted after 1 October 2010 will be at 12.5%.

- Cancellations

Refunds on existing policies (that have not been endorsed) will be issued at the GST rate corresponding to the original GST charged.

E.g. If an annual policy was invoiced at 12.5% (prior to 1 October 2010) and cancelled after 1 October 2010, then the refunded GST will be at 12.5%.

Refunds on policies that have been endorsed spanning two GST periods will be refunded proportionately.

- End of year adjustments and declarations

If a policy was issued at 12.5% GST and was subject to an annual adjustment clause, the adjustment will be at 12.5% GST if before 30 September 2010. Otherwise, from 1 October 2010 the 15% GST rate applies.

- Commission

Commission is paid based on the invoice date, regardless of when the business was closed.  All commissions paid in September 2010 attract GST at 12.5%, while those paid from 1 October 2010 will attract GST at 15%.

- Claims

Claims payments invoiced or received on or after 1 October 2010 will attract 15% GST, regardless of date of loss or claim notification.