BAS. THE GOLDEN RULES!
If your businesses revenue is over $75,000 you need to register for GST and complete Business Activity Statements on an annual, quarterly or monthly basis. While the BAS is another compliance hoop your business needs to jump through, remember these four golden rules to avoid costly mistakes.
1.Always complete and lodge the Business Activity Statement by the due date.
Too many businesses put off completing their BAS, especially if there is an amount payable at the end of it. Putting off the BAS may seem like a short-term cash flow solution, but really you are adding to the cost later on. The ATO charges penalties and interest on overdue Business Activity Statements. Don’t let your business pay extra hard-earned cash for putting your head in the sand.
If you’re on an annual cycle, your due date is the date of your tax return for the period.
If you’re on a quarterly cycle, your due date is the 28th day of the month after the end of the quarter (except for the December quarter, which has a due date of 28 February).
If you’re on a monthly cycle, your due date is the 21st day of the month after the end of the monthly period.
2. Check, Double Check, and Triple Check your figures.
Always remember human error can happen at any time. You don’t want a simple error occurring when you’re telling the ATO how much you will need to pay or receive.
Also remember that although accounting software makes your life a lot easier, it is only as powerful as the user who enters and assigns the information. Check the GST Audit Report to see if all eligible purchases are given the right tax code.
Assuming the software is infallible may cost your pocket dearly. Double checking is free.
3. Remember not all purchases are claimable.
The ATO only allows you to claim a credit on the GST of purchases you make for use in your business. Too many people try to claim personal expenses in their businesses BAS. If an expense is for both business and personal use, it needs to be apportioned based on the business use % of the expense.
Also remember, you cannot claim GST on items which are GST Free, or on items where GST was not included in the purchase price (i.e. an item sold by a vendor not registered for GST).
4.Receipts and Tax Invoices are not a waste of time.
The ATO expects you to have written evidence of the GST credits you claim. Keeping receipts or tax invoices of the purchases which, you claim GST credits on backs up your claim.
For purchases over $82.50, you are required to receive a tax invoice from the supplier within 28 days of purchase.
Contact us at Dolman Bateman or Buildersbooks if you are looking for an experienced accountant or Bookkeeper.
This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice.