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Common BAS Mistakes
Are you worried about making mistakes when completing your Business Activity Statement (BAS)? Don’t panic, it is not as uncommon as you may think! Read on for some basic tips to assist you in avoiding those errors and what to do if you think you may have got it wrong.
Common industries prone to BAS mistakes include building and construction; professional services; retail and wholesale; rental/hiring; and logistics businesses. While these mistakes are better not made, the Australian Taxation Office (ATO) will generally treat them as genuine errors, unless there is sufficient evidence to suggest carelessness, recklessness or intentional disregard for the law. This was reflected in research they conducted, which showed that 80% of BAS errors are indeed unintentional.
Tips to Avoid Mistakes on your Business Activity Statement
The ATO has a list of suggestions for reducing or eliminating errors in your BAS, which are as follows:
- Check every invoice is only entered once
- Ensure that sales and expenses entered are only for the current tax period
- Make certain that the amounts on your BAS are filled in as whole dollars (cents are left out)
- Remember not to claim GST on private expenses
- Before you lodge your BAS, ensure that the amount calculated on it is the same as what the taxpayer expects to pay or receive as a refund
- Maintaining good record-keeping practice, including:
- Obtaining valid tax invoices for purchases that include GST
- Keeping records of all sales and purchases
- Keeping records electronically
A handy resource to keep an eye out for is the ATO bulletin which is sent with your BAS, and webinars that they hold online from time to time.
What to do if you get it wrong…
As the ATO will generally regard errors as honest mistakes, there is rarely a reason to panic if there is a genuine error on your BAS. While getting it right the first time is obviously ideal, accidents do happen and the best thing to do is to amend any errors as soon as they are recognised. Some common examples of errors made on Business Activity Statements include:
- Clerical errors (e.g. double-counting a creditable purchase)
- Incorrectly recording a taxable sale as GST-free
- Incorrectly recording a GST-free sale as taxable
If you think you have made a mistake on your BAS, see the ATO website and follow their instructions on how to go about changing them. In some circumstances, you will be able to make the correction on your next BAS (following quarter).
Are you new to business and need help completing your BAS? Are you unsure about the correct way to record a particular transaction? If so, our tax team are here to assist so don’t hesitate to give us a call on 9301 2200
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