BAS: Essential Tips for Accurate Lodgment and GST Compliance

1. Maintain Accurate Records

Keeping comprehensive records of all sales, fees, expenses, wages, and other business costs is essential. Ensure you retain appropriate documentation, such as tax invoices, stocktake records, and logbooks for motor vehicle claims. Reconcile your sales with bank statements regularly and use the correct GST accounting method. Remember, all tax invoices and GST records should be kept for a minimum of five years.

2. Claim GST Credits Correctly

Only claim GST credits on the business portion of your purchases. Avoid claiming GST on private expenses like food or entertainment. For items used for both business and personal purposes, claim only the business-related portion. When dealing with discounted purchases, use the discounted price to calculate GST credits, even if the discount isn’t explicitly stated on the invoice. If you account for GST on a cash basis and have hire purchase agreements entered into on or after 1 July 2012, you can claim GST credits upfront for purchases under these agreements. Additionally, when claiming invoices in a foreign currency, use the Australian dollar value.

3. Understand When Not to Claim GST Credits

Do not claim GST credits for purchases that don’t include GST in the price, such as bank fees, stamp duty, and GST-free items like basic foods. Also, avoid claiming GST credits on imported goods unless you’re the importer and the goods are used solely or partly for your business. Purchases made between entities within a GST group are also ineligible for GST credits; however, you can claim credits on transactions between GST branches.

4. Manage Invoices Diligently

Ensure that GST is included on invoices you issue for sales. Only claim GST credits if you have valid tax invoices for purchases of $82.50 (including GST) or more. Be cautious to count each invoice only once to prevent duplication.

5. Avoid Manual Errors

To minimize errors, verify that you’re using the correct formulas to calculate GST. Maintain a separate column for GST in your cash book, and ensure that column and row totals are accurate. Classify and enter transactions correctly into your accounts payable and receivable systems. Utilizing an electronic record-keeping system tailored to your business type can streamline administration tasks and reduce the likelihood of mistakes.

6. Complete Your BAS Accurately

When filling out your BAS:

• Enter whole dollar amounts, excluding cents, and avoid rounding up to the next dollar.

• Ensure each invoice is entered only once.

• If you account for GST on a cash basis, report expenses and sales in the period when payment was made or received.

• Complete only the fields that apply to your business; if a field doesn’t apply, enter zero.

• Double-check your figures and calculations if completing the BAS manually.

• Remember, you can correct mistakes made on an earlier BAS.

7. Lodge and Pay on Time

The due date for lodging and paying is displayed on your BAS. Lodging and paying on time helps you avoid penalties. If a lodgment date falls on a weekend or public holiday, you can lodge and pay on the next working day. Ensure you use the correct payment reference number (PRN), also referred to as an EFT code, when making payments.

By following these guidelines, you can manage your BAS and GST obligations more effectively, ensuring compliance with ATO requirements and contributing to the financial health of your business.