Question: Our contractor has been incorrectly charging GST on invoices for 11 years. The committee says it’s aware but won’t take action to recover the overpayment. What can we do?
Our contractor has been charging GST on all their invoices for 11 years. We informed the secretary eight months ago and also raised it with the strata managing agent. They eventually came back and said the committee is aware, the contractor has stopped charging GST, and no further action will be taken.
How do we hold the committee accountable to recoup this overpayment?
Answer: The outcome depends on whether the plan is registered for GST. If registered, the overcharging would have been claimed back via the BAS. If not, the contractor would owe the plan for all GST overcharged.
If the plan is registered for GST, the overcharge would have been claimed back from the ATO on the BAS.
The tax/BAS agent would have to answer for lodging with errors, in addition to the contractor.
If the plan is not registered for GST, the contractor would owe the plan for all GST overcharged. The committee may have the authority to write off the receivable as not recoverable, depending on the committee’s expenditure threshold. As far as keeping the committee accountable, I don’t believe committee members are financially responsible for their decisions (no one would ever join a committee).
A plan could take the contractor to NCAT. The cost of lawyers may be prohibitive of taking action in the Petty Claims court, but the amount concerned is not mentioned. The eight-month delay in responding to your advice and the failure to pursue the overcharges are topics to discuss at the next general meeting. Why is that contractor still being used? There is nothing stopping owners from bypassing the committee and reporting matters straight to the strata managing agent.
This post appears in the July 2026 edition of The NSW Strata Magazine.
Matthew Faulkner
Matthew Faulkner Accountancy PTY LTD
E: matt@mattfaulkner.accountants
P: 0438 116 374
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