Businesses operating in Australia with a turnover greater than $75000 are to submit a Business Activity Statement (BAS) reporting for the Goods and Services Tax (GST). BAS can be lodged monthly, quarterly, or annually, with a few limitations. 97.2% of businesses in Australia are small businesses. And the biggest struggle for them is focusing on growth and lodging BAS before the due date.
Many things are tricky in preparing the BAS, leading to common errors which can impact the business’s financial health. Aupod’s professionals have helped many small businesses navigate BAS lodgement with accurate reporting with full ATO compliance to avoid issues with their business tax return services.
Does Your Business Need to Register for GST?
Small business owners are bound to register for GST once their annual turnover reaches the threshold ($75000 for most businesses) fixed by the ATO (Australian Tax Office). Most sales and purchases by a small business have a 10% GST. The basic GST-free supplies are;
- Basic food items
- Education courses
- Medical, health, and care products or services
Small businesses that have ridesharing services or taxi no matter what their turnover is, are bound to register for the GST. NGO with a turnover reaching $150,000 are to register for GST.
7 BAS Common Mistakes and How Aupod Helps You Avoid Them
The small error can cost you big money. Online Accounting and Taxation Digital Service Providers like Aupod can help you (businesses) keep away from common GST errors while properly reporting GST on BAS.
1. Claiming GST Twice on Vehicle or Equipment Purchases
This type of error commonly occurs when a business claims the full GST upfront on a vehicle or equipment purchase and then inadvertently claims it again in subsequent monthly repayments. It is often the result of incorrect coding in hire purchase or lease agreement repayment entries.
How Aupod Prevents Double GST Claims on Asset Purchases?
We review your BAS entries before submission, making sure GST is only claimed once and repayments are coded correctly. Our team checks purchase invoices, loan agreements, and coding to ensure your BAS is accurate and compliant.
2. Mixing Up Wages, Superannuation, and BAS Purchase Codes
Wages should be reported in W1, with superannuation excluded entirely; however, many businesses incorrectly include these amounts in G11 (non-capital purchases), leading to inaccurate reporting and potential ATO scrutiny.
How Aupod Helps Correctly Report Wages and Superannuation?
Our accounting review separates wages, super, and purchases correctly every time, using ATO-approved reporting structures so your BAS matches the income tax return for small business perfectly.
3. Incorrect Tax Codes in the Chart of Accounts
An improperly configured chart of accounts can result in recurring BAS errors, such as incorrect GST codes for expenses, misclassification of capital items as purchases, or treating GST-exempt sales as taxable.
How Aupod Helps Set Up the Correct Code?
We set up (or clean up) your accounting system’s tax codes to match your GST registration, industry rules, and reporting method. Once fixed, your business tax returns and BAS will always use the correct codes.
4. Omitting GST-Free and Exempt Sales from Total Sales Figures
Some businesses omit GST-free sales, such as basic foods or medical services, from G1 (Total Sales) under the misconception that they are irrelevant. However, the ATO requires these to be included in G1, with GST-free amounts separately reported in G3.
How Aupod Helps with Accurate Sales Reporting
We verify your sales mix, making sure taxable, GST-free, and input-taxed sales are correctly classified and reported on your BAS, aligning with your ATO business tax return
5. Failing to Reconcile BAS Figures with the Balance Sheet
If adjustments are made after a BAS has been lodged, they will not appear in the following BAS report. Without proper reconciliation, discrepancies in GST or PAYG balances may go undetected, resulting in errors that can carry over into multiple reporting periods.
How Aupod Helps with Quarterly BAS Reconciliation for Accuracy?
Our team runs balance sheet reconciliations every quarter, so your BAS aligns with actual GST/PAYG payable accounts. Any discrepancies are fixed before lodging.
6. Claiming GST Credits from Non-Registered Suppliers
GST credits can only be claimed if the supplier is registered for GST and has applied it to their invoice. Claiming credits from a non-registered supplier may result in an ATO audit adjustment.
How Aupod Help Claiming GST Credits?
We verify supplier GST status using ABN Lookup and ensure your expense claims match valid tax invoices. No more guesswork, just compliant claims every time.
7. Missing Cash Transactions
Cash sales and purchases, particularly in trades, hospitality and construction, are often under-reported. The ATO’s advanced data-matching systems can readily identify such discrepancies.
How Aupod Helps with Missing Cash Transactions?
We work to ensure all transactions (including cash) are recorded and reconciled. For industries with Taxable Payments Reporting obligations, we prepare accurate annual reports so nothing is missed.
Final Words!
The majority of small businesses in Australia are striving to grow their business and operations. In the process, businesses often accidentally bypass the ATO requirements and make mistakes that cost them penalties.
The smartest way to focus on your growing business is to leave your monthly, quarterly, or annual BAS lodgment on Aupod. Our TPB-registered professional handles the entire process with precision and care, giving you the confidence that everything is accurate, compliant, and on time.
With Aupod, you get:
- Accurate BAS preparation and lodgement
- Compliance with all ATO requirements
- Timely submissions to avoid penalties
- Expert review by qualified accountants
- More time to focus on running and growing your business
FAQs
What happens if I make a mistake on my BAS?
The debit error can be amended within 12 months of the due date of the BAS lodgment. The consequences depend on the type of error. Depending on the ATO requirements in the given circumstances, you can revise the original BAS or make amendments in the next cycle. The best way is to source a DSP like Aupod to have stress-free BAS lodgment.
What are the Due Dates for BAS to remember?
There are three ATO BAS lodgment cycles: monthly, quarterly, and annually. Businesses report quarterly BAS if GST turnover is under $20 million (unless required to report monthly), monthly if it is $20 million or more, or annually if voluntarily registered and the turnover is under $75,000 ($150,000 for not-for-profits).
