Most activity statement errors are unintentional – even so, such errors can have a big impact on your Business Activity Statement. Unintentional errors may result in you paying too much GST or not enough. Whether you lodge the BAS yourself or whether you use our services to lodge, it’s useful to understand some of the inadvertent inaccuracies that can happen.
Here are some tips to help avoid the most common mistakes we see on the BAS.
Before preparing the BAS
- Allocate all transactions in your accounting software to the correct expense or income account.
- Make sure you reconcile your accounting software to your actual bank balance to ensure you haven’t missed or duplicated transactions.
- If you use point-of-sale software and clearing accounts, check that you are not declaring the same income twice.
- Set aside time to prepare the BAS so you have plenty of time to manage cash flow obligations ahead of the BAS payment due date.
Reviewing the BAS
- The most common errors involve incorrect tax codes. Bank fees, donations, certain registrations, interest and ASIC fees are GST free.
- Check overseas purchases—many well-known online vendors are now registered for GST in Australia, however many of the smaller overseas vendors may not be, so they should still be GST free.
- Similarly, some payment gateway services have GST on their fees, and some don’t—check if you can claim GST.
- Check that you have included stamp duty on insurance policies—as this is a government duty, no GST is payable.
- If you have bought a vehicle, check that you have not claimed more than the ATO car limit of GST for this financial year.
- Make sure you haven’t double-claimed GST on both the vehicle purchase and repayments.
- Don’t include salary, PAYGW or superannuation as a purchase on your BAS. Salary and PAYGW are reported separately on the BAS. Superannuation is not reported on the BAS at all.
- Do include cash purchases and income. Cash transactions should be recorded in your accounting software.
- Check the GST registration of any contractors you pay and check that you have not claimed GST if they are not registered.
- If you transfer money between related entities or bank accounts, check that these transactions do not have GST as they are excluded from BAS reporting.
- Although your business may purchase goods and services for private use, you may not claim GST on these.
- Remember, you need a valid tax invoice for every business purchase over $82.50 including GST.
Accurate Activity Statements
There are many more potential issues with BAS reporting, but these are the most common and easily fixed. If your business is growing in complexity, or if the compliance obligations are becoming challenging, we’ll help you make BAS effortless and accurate every time.