If you’re a business that’s registered (or required to be registered) for GST and PAYG withholding, you must prepare a periodic business activity statement (BAS) in order to meet your tax obligations.
The single-transaction BAS form is used to summarise the amounts of GST payable and receivable by you for a certain period, as well as a number of other taxes:
- Goods and services tax (GST).
- Pay as you go (PAYG) income tax instalment.
- Pay as you go (PAYG) tax withheld.
- Fringe benefits tax (FBT) instalment.
- Luxury car tax (LCT).
- Wine equalisation tax (WET).
- Fuel tax credits.
MISTAKE: Missing or avoiding deadlines
How to avoid it
You’ll need to lodge a BAS either monthly or quarterly at the following intervals:
- Monthly: 21st day of every month for the most recent month.
- Quarterly: 28th of October, February, April, and July.
- You’re required to lodge your annual GST return and pay the amounts owing by the date shown on the front of the return (the date of payment will be the same date that your income tax return is due to be lodged)
Failure to lodge penalties range from $110 to $550 for each 28-day period.
What to do in future
Use a cloud-based calendar with reminders to diarise your BAS time. Add it into your operating rhythm and block out time to complete it. That way everyone in the office knows not to disturb you on, for example, the last Monday morning of each month.
MISTAKE: Lodged with incorrect information
How to avoid it
Keep your accounts up to date on an ongoing basis to avoid making BAS time stressful, and own up to a mistake as soon as you become aware of it.
If it’s a genuine error, you might have to pay interest on the underpaid tax (or receive a credit if you’ve overpaid). But if the ATO thinks you were careless or deliberately ignored the law, you will be charged penalty interest (in excess of 9%) calculated on the shortfall.
What to do in future
Using online accounting software like MYOB or Xero should make managing your entire accounting process easier. If you want to DIY, keep a comprehensive and up-to-date database of your finances.
MISTAKE: Putting the wrong information in the wrong places
How to avoid it
Messing up your accounts can get… messy. Two of the most common lodging errors are:
| Incorrect | Correct |
| Putting wages and superannuation contributions as purchases at G11. | Wages must be reported as wages at W1. Superannuation contributions are not reported. |
| Not including cash taken from the till to pay for purchases. | Include all cash payments made out of the till for purchases in section G1. |
What to do in future
Put together a brief procedure document highlighting where to enter the information for ease of reference.
MISTAKE: Including dollars and cents
How to avoid it
Round up (≥$.50) or down (≤$0.49) to whole dollars when completing your statement.
What to do in future
Do not use cents, decimal points, commas, $ symbols or words like nil and N/A, as they can cause adding errors. Formulate cells in your spreadsheet to only use rounded dollar figures.
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