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Common BAS errors small businesses are making
The ATO has compiled a list of common mistakes and errors that are made by business owners when submitting their BAS. This list has been created with the intention to help solve and prevent common BAS errors.
Who is required to submit a BAS? (Business Activity Statement)
Any business that is registered or required to be registered for GST and PAYG Withholding are required to prepare their Business Activity Statements (BAS) in order to report and pay their tax obligations. Some of the things a business may need to include in their statement include:
- PAYG Instalments;
- PAYG Withholding;
- Fringe benefits tax; and
- Luxury car tax.
Common BAS errors – General Problems and Solutions
Problem: Including wages and superannuation contributions as purchases at G11
You must report wages at W1. You don’t need to report superannuation contributions.
Problem: Lodging blank forms
When lodging statements with nothing to report at any label (a nil statement), insert zeros against labels 1a, 1b and 9.
Problem: Lodging printed activity statements
You must lodge original activity statements with the Australian Taxation Office (ATO)
Problem: Not registering with the ATO for tax obligations reported in your activity statement.
It is important to ensure that you are correctly registered for all your tax obligations. To register or cancel registration for PAYG withholding, goods and services tax, luxury car tax or wine equalisation tax, contact the ATO on 13 28 66.
Problem: Not notifying the ATO of the accounting method used.
If you are new to business reporting, notify the ATO on 13 28 66.
Problem: Not including cash taken from the till to pay for purchases.
Total sales (G1 on your BAS) should include all cash payments made out of the till for purchases.
Problem: Using the Incorrect accounting method.
If you are using the cash accounting method and your business turnover is expected to exceed $10 million, you must change to the accrual accounting method and notify the at 13 28 66. They will consider requests for continued use of the cash accounting method. However, approval is dependent on circumstances.
Problem: Including dollars and cents.
Show only whole dollars when completing your activity statement. To avoid processing errors and to allow us to issue any refund quickly, do not use cents, decimal points, commas, symbols or words such as $, nil and n/a.
Don’t see your problem on this list? Check out the full list on the ATO website here.
Submitting my BAS is taking too much time away from running my business – What do I do?
Fitzpatrick Group help hundreds of businesses to submit their BAS correctly and on time every year. If you would like to spend your time more wisely on your business, contact us here, or call us on 1300 780 191.
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