Filing your Business Activity Statement (BAS) is an essential task for small business owners in Australia. It ensures you stay compliant with the Australian Taxation Office (ATO) and accurately report GST, PAYG withholding, and other tax obligations. However, many business owners make mistakes that can lead to penalties, financial loss, or unnecessary stress.
Here are five common mistakes to avoid when preparing your BAS.
1. Lodging BAS late
One of the most frequent mistakes small business owners make is missing the BAS deadline. The ATO sets clear lodgement dates, and failing to submit on time can result in late penalties, interest charges, and compliance issues. Some business owners assume they have more time than they do, only to realise too late that the deadline has passed.
The ATO has strict due dates for BAS lodgement, and if you fail to submit on time, you could face:
- Late lodgement penalties starting at $313, increasing the longer you delay
- Interest charges on unpaid amounts
- Extra ATO scrutiny, especially if late lodgement becomes a pattern
2. Reporting incorrect GST amounts
Incorrectly reporting Goods and Services Tax (GST) is another major issue. Some business owners over-claim GST credits on purchases that are not eligible, while others forget to include GST on taxable sales. These errors can lead to overpaying or underpaying tax, which may require adjustments in future lodgements.
Some of the most common GST errors include:
- Claiming GST credits on purchases that do not include GST
- Failing to charge GST on taxable sales
- Reporting the wrong GST amount due to bookkeeping errors
Another frequent error is misclassifying sales or purchases. Some business owners record transactions incorrectly, which distorts the GST calculation. If figures do not match the ATO’s expectations, businesses may be asked to explain discrepancies, leading to additional administrative work and potential audits.
3. Claiming ineligible business deductions
Many small business owners make the mistake of mixing personal and business expenses, especially if they use the same bank account for both. Some claim deductions for expenses not entirely business-related, such as personal meals, entertainment, or household bills.
While certain expenses may have a business component, such as a mobile phone or car usage, they must be apportioned correctly.
4. Failing to reconcile business transactions
One of the biggest contributors to BAS errors is poor record-keeping and failure to reconcile transactions before lodgement. Some business owners manually enter figures without checking them against bank statements, leading to missing or duplicated transactions. This can cause inaccurate tax calculations and misreporting to the ATO.
5. Estimating figures instead of using accurate records
Some business owners guess their numbers rather than using accurate financial records. This is risky because:
- If your figures do not add up, the ATO may ask questions
- You could end up overpaying or underpaying your tax obligations
- Incorrect lodgements can trigger audits or penalties
The ATO has access to detailed financial data and can detect inconsistencies between reported figures and actual business transactions. If the numbers do not match, businesses may be asked to provide further evidence or explain discrepancies.
Let a First Class Accounts bookkeeper take BAS off your to-do list
Many small business owners try to handle BAS on their own, but the reality is that tax obligations can be complex and time-consuming. Meeting deadlines, tracking every transaction, and making sure all the numbers add up can take hours out of your schedule. That time could be better spent growing your business, serving customers, or simply enjoying peace of mind knowing everything is handled correctly.
That is why you should let a First Class Accounts bookkeeper handle your BAS filing. With a First Class Account bookkeeper, you can:
- Ensure your BAS is lodged on time so you never have to worry about penalties
- Accurately report GST, deductions, and PAYG withholding without second-guessing your numbers
- Spend less time on paperwork and more time running your business
Let’s get your BAS sorted today. Schedule a consultation with a First Class Accounts bookkeeper and take the stress out of tax reporting.
