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FAT testing


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FAT testingHow would your business measure up to the FAT test under an ATO audit?

The financial acquisitions threshold test or FAT test has become a standard menu item for all GST audits. If you don’t know your FAT risk profile and you don’t have a FAT management program in place then this is a potential risk area for your business.

As a general rule if a business makes financial supplies then it may not be entitled to claim the GST credits on the costs associated with making those supplies. The FAT is a de minimus test that allows businesses that only make minor financial supplies to claim full GST credits on the costs associated with those supplies. However, if your business fails the FAT test then you may not be entitled to claim all of the GST credits on the costs associated with your financial supplies.

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