Common mistakes found in the BAS reporting form
1. Double Claim GST
Hire Purchase of Plant or Equipment is an area that I see many business owners making a mistake when doing the books. Initially, the client (or their accountant) will claim the full GST component in the first quarter that they purchase their vehicle. However, when they record their regular monthly payments later on, the client will either continue to code it as a GST or as a Capital expense which effectively causing them to “double claim" on the GST.
2. Claiming GST against all expenses
There are expenses that do not have a GST component. They include:
· Motor vehicle registrations
· Bank charges
· ASIC fees
· Paypal transaction fees
· Insurance payment
3. Forgetting to include all cash sales and purchases
The ATO has a sophisticated process of cross matching data. So make sure you declare all cash payments. At the same time, do not throw away genuine tax deductions and GST credits into the bin.
4. Not including capital sales in G1 (Total Sales)
This includes the sale of motor vehicles, a trade in or office equipment.