GST & BAS

Businesses registered for GST are required to lodge Business Activity Statements.

Lodgement dates are generally 4 weeks from the end of the reporting period.

Being our client allows you an extra 4 weeks to lodge and pay your BAS, as long as we lodge BAS for you.

Though you must pay GST collected on your income, you can claim GST credits expenses paid (or accrued).

Be aware that the ATO imposes hefty fines if your BAS is lodged after the due date.

Firstly, talk to us to find out if you need to report your BAS on a ‘Cash’ (payments paid and received) or ‘Accrual’ basis (payments due).

Income

You must include all income regardless of payment method, cash, eft, bank transfer, and PayPal.

Generally, the GST component on income is 1/11^th. This is what you are owing to the ATO.

Be aware, you may also receive payments that are GST-free, for example interest.

Expenses

Be vigilant when claiming Income Tax Credits on your expenses:

• Always check your invoices and receipts for the correct amount of GST you can claim
• Keeping records is essential. They must be provided to the ATO if requested
• Most relevant records need to be kept for five years from the lodgement date
• Avoid writing onto your documents (even if you are just relining sun-bleached fuel receipts) as this can void the document

For more information and further registrations that might affect you please contact us.

Other reportings

You may also be eligible or required to report other items in your BAS. This could include, for example, Fuel Tax Credits (FTC), Wine Equalisation Tax (WET), payroll items, ‘Pay as you go’ income tax instalments or Fringe Benefits Tax (FBT) instalments.

Common mistakes when preparing your BAS

We understand people make mistakes, however, we are not here to judge you, we are here to help.

Below are some examples of what to look out for:

1. Not all expenses attract GST

Common expenses that do not attract GST are:

• Bank fees (however merchant fees do attract GST)
• Government charges, taxes, levies, stamp duties (including the one on your motor vehicle registration)
• Salaries, wages and superannuation payments
• Loan repayments
• Interest expenses
• Unprocessed foods

It should also be noted that not all of those expenses are reportable as expenses in your BAS.

2. Double dipping

You can claim GST credits in the period you made a capital acquisition, but don’t claim it again with your loan repayments afterwards. Those are essentially just transfers between accounts.

3. Private expenses

Certain expenses may need to be apportioned if you use them for business purposes but also privately, such as your mobile phone expenses, home office running costs or motor vehicle expenditures. Other cash outflows may be considered fully private in nature and have no place in your BAS at all, like speeding fines, personal loan principal and interest and drawings.

We suggest to strictly separate between business and private expenses.It is advisable and for certain entities required to open a separate bank account for business dealings.

4. Capital sales

Remember to report and charge GST on the sale of business assets. Mistakes can catch you out cold if you haven’t accounted for the GST.

5. Supplier is not registered for GST

We suggest to always check ABN lookup to verify if a supplier is registered for GST.

If a supplier is not registered for GST, they cannot charge GST. It is understood GST credits can only be claimed if they have been charged.

Be aware:

If a supplier does not quote their ABN you can still trade with them but need to withhold part of the payment as ‘No ABN withholding’ and forward the withheld amount to the ATO as part of your BAS.

You are in good hands at Taxpro!

• Have less stress
• Have less work
• Avoid costly mistakes
• Ensure compliance
• Have a trusted advisor by your side throughout the year