Business Activity Statements (BAS) and Goods and Services Tax (GST) management are vital to running a successful business. To help you navigate the complexities of BAS and GST, the team at GC Accountants has compiled a comprehensive list of expert tips. Our tips will ensure you maintain accurate records, claim the proper GST credits, avoid common errors, and smoothly complete and lodge your BAS.
BAS and GST Record Keeping Tips
Maintain Comprehensive Records: Keep detailed records of your sales, expenses, wages, and business costs. Proper record-keeping is the foundation of accurate BAS and GST management.
Document Everything: Store essential records like stocktake records and logbooks. These documents provide evidence of your business activities and can support your BAS claims.
Reconcile Sales: Regularly reconcile your sales figures with your bank statements. This practice helps identify any discrepancies and ensures accurate reporting.
Use Correct GST Accounting Method: Choose the GST accounting method that suits your business, whether it’s the cash basis or the accruals basis. Consistency is key to accurate reporting.
Retain Tax Invoices and GST Records: Keep tax invoices and GST records for at least five years. This practice ensures you have the necessary documentation to support your claims.
Optimising GST Credits
Claiming GST credits on business-related purchases can significantly benefit your bottom line. However, remember to avoid claiming GST on private expenses like entertainment or personal food purchases.
When an item serves both personal and business purposes, claim only the portion relevant to your business. Be sure to use the discounted price when claiming GST credits on discounted purchases and keep track of foreign currency invoices.
When Not to Claim GST Credits
- No GST on Bank Fees and Stamp Duty: Avoid claiming GST credits on purchases that don’t attract GST, such as bank fees and stamp duty.
- GST-Free Items: Don’t claim on GST-free items like basic foods. Properly categorise these items to avoid discrepancies.
- Imported Goods: If you’re not the importer for your business, avoid claiming GST credits on imported goods.
- Intra-Entity Transactions: While you can’t claim GST credits on purchases between entities within a GST group, you can claim them between GST branches.
Invoices: Ensuring Accuracy
Include GST on Invoices:
Ensure that GST is included on all sales invoices issued. Accurate invoicing supports correct reporting.
Tax Invoices for Purchases:
Only claim GST credits with valid tax invoices for purchases over $82.50 (including GST).
Avoid Duplicating Invoices:
Double-check your records to prevent duplicating invoices, which can lead to inaccurate reporting.
Avoiding Manual Errors
Accurate calculations are essential to avoid compliance issues. Use the correct GST formulas for calculations and include a separate GST column in your cash book. Ensure that column and row totals match in your cash books, and enter transactions accurately into payable and receivable systems.
Consider using an electronic record-keeping system tailored to your business’s needs for enhanced accuracy.
Completing and Lodging Your BAS
Whole Dollar Amounts: Enter amounts on your BAS as whole dollars, omitting cents. Avoid rounding up.
No Duplicate Entries: Enter each invoice only once to prevent duplicate entries.
Double-Check Your Figures: Before submitting your BAS, thoroughly review your figures and calculations for accuracy.
Correcting Mistakes: If you make an error on a previous BAS, fix it on the next activity statement.
Lodging and Paying Your BAS
Timely Lodgment and Payment: Lodge and pay your BAS by the displayed due date to avoid penalties.
Communication: If you’re unable to lodge or pay by the due date, contact the relevant authorities to discuss your situation.
Refunds for BAS and GST: Timely and Accurate
Maintaining up-to-date lodgments is essential for timely refunds. Double-check and verify your financial institution details to ensure smooth refunds. If you make a mistake on your BAS, correct it on the next activity statement.
Keep in mind the four-year time limit for claiming credits and refunds. When making adjustments, report them using the appropriate labels, especially for events like changes in sale or purchase prices or returned goods.
How GC Accountants Can Help with BAS and GST Services
Navigating the world of BAS and GST can be overwhelming. That’s where the expert accountants at GC Accountants come in. Our experienced professionals are well-versed in Australian tax regulations and can provide tailored guidance to ensure seamless BAS and GST management. Whether you need assistance with record-keeping, GST credit optimisation, accurate reporting, or lodgment processes, our team has you covered. With GC Accountants by your side, you can focus on growing your business while we handle the complexities of BAS and GST.
By following these expert tips and considering the assistance of professionals like GC Accountants, you can confidently manage your BAS and GST responsibilities, ensuring accurate reporting, maximising credits, and avoiding penalties. Remember that precise record-keeping and a thorough understanding of the regulations are your keys to success.