It is common for businesses to make GST errors in their BAS. The majority of these mistakes are unintentional.
The ATO recently reviewed all of the BAS adjustments made as a result of auditing and revealed that over 80% were the result of inadvertent GST mistakes. Examples of common mistakes include: clerical errors such as duplications or accidental omissions, sales being incorrectly recorded as GST free, adding invoices after a period is closed, or accidentally recording a GST-free sale as taxable.
Getting your BAS right the first time around can save your business time and money, and ensure that you receive your refund as soon as possible. Make sure that the ATO has your bank details on file so that the refund can be deposited directly into your bank account.
Regular and meticulous bookkeeping can make a significant difference to the accuracy of your BAS. It is also important to retain any relevant documentation including tax invoices for purchases that included GST and all electronic records.
The ATO has indicated that it will be lenient towards businesses with mistakes in the BAS unless there is an indication that the business has been reckless in their record keeping, or have deliberately provided misleading information.
Here are some tips for ensuring accuracy on your BAS:
• Confirm that all expenses and sales were incurred within the specified tax period
• Do not enter cents into your BAS (whole dollar amounts only)
• Ensure that none of the expenses claimed were private expenses
• Only claim the GST that is on the invoice (relevant to insurance)
• Double check that the amount you have calculated on your BAS is equivalent to what you expect to receive as a refund
• Lodge your BAS online, as the online portal will pick up on many common mistakes
If you have made any errors on your BAS then you have the option of simply correcting them on your next BAS yourself. This will not subject you to any liabilities or general interest, and is generally much simpler than redoing the past BAS. However, this is not possible if your error is outside the correction limits. If you are outside the correction limits you will need to amend the BAS in the period that relates to the correction.
Business categories that have been identified as being at high risk of GST errors include construction, professional services, wholesale trade, retail and logistics.