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Common BAS mistakes made by small business owners

If you’re a business that’s registered (or required to be registered) for GST and PAYG withholding, you must prepare a periodic business activity statement (BAS) in order to meet your tax obligations.

The single-transaction BAS form is used to summarise the amounts of GST payable and receivable by you for a certain period, as well as a number of other taxes:

  • Goods and services tax (GST).
  • Pay as you go (PAYG) income tax instalment.
  • Pay as you go (PAYG) tax withheld.
  • Fringe benefits tax (FBT) instalment.
  • Luxury car tax (LCT).
  • Wine equalisation tax (WET).
  • Fuel tax credits.

MISTAKE: Missing or avoiding deadlines

How to avoid it

You’ll need to lodge a BAS either monthly or quarterly at the following intervals:

  • Monthly: 21st day of every month for the most recent month.
  • Quarterly: 28th of October, February, April, and July.
  • You’re required to lodge your annual GST return and pay the amounts owing by the date shown on the front of the return (the date of payment will be the same date that your income tax return is due to be lodged) If you are not required to lodge an income tax return, the due date for these payments will be 28 February.

Failure to lodge penalties range from $110 to $550 for each 28-day period.

What to do in future

Use a cloud-based calendar with reminders to diarise your BAS time. Add it into your operating rhythm and block out time to complete it. That way everyone in the office knows not to disturb you on, for example, the last Monday morning of each month.

MISTAKE: Lodged with incorrect information

How to avoid it

Keep your accounts up to date on an ongoing basis to avoid making BAS time stressful, and own up to a mistake as soon as you become aware of it.

If it’s a genuine error, you might have to pay interest on the underpaid tax (or receive a credit if you’ve overpaid). But if the ATO thinks you were careless or deliberately ignored the law, you will be charged penalty interest (in excess of 9%) calculated on the shortfall.

What to do in future

Using online accounting software like MYOB or Xero should make managing your entire accounting process easier. If you want to DIY, keep a comprehensive and up-to-date database of your finances, and utilise Prospa’s smart tools to help you reconcile your accounts.

MISTAKE: Putting the wrong information in the wrong places

How to avoid it

Messing up your accounts can get… messy. Two of the most common lodging errors are:

Incorrect Correct
Putting wages and superannuation contributions as purchases at G11. Wages must be reported as wages at W1. Superannuation contributions are not reported.
Not including cash taken from the till to pay for purchases. Include all cash payments made out of the till for purchases in section G1.

What to do in future

Put together a brief procedure document highlighting where to enter the information for ease of reference.

MISTAKE: Including dollars and cents

How to avoid it

Round up (≥$.50) or down (≤$0.49) to whole dollars when completing your statement.

What to do in future

Do not use cents, decimal points, commas, $ symbols or words like nil and n/a, as they can cause adding errors. Formulate cells in your spreadsheet to only use rounded dollar figures.

Looking for more ways to manage your bottom line? Talk to Australia’s leading online lender for small business on 1300 882 867 or apply online for a small business loan with Prospa.

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The information in this post is provided for general information only and does not take into account your personal situation. Nothing contained in this post constitutes advice or an endorsement or recommendation of any kind by Prospa. Any links to third party websites are strictly for informational purposes only. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

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