BAS mistakes that cost businesses thousands

Most BAS errors are not complicated. They are small habits repeated every quarter, and they cost real money in overpaid GST, amendments and penalties.

Most of the BAS problems we see are not exotic. They are ordinary mistakes, repeated quarterly, that quietly cost money. Here are the ones that come up most often.

Claiming GST on things that do not have it

This is the most common error by a distance. Not every expense includes GST, and claiming it anyway means an incorrect BAS.

The usual offenders: bank fees and most financial services, residential rent, most fresh food, council rates and water, some government charges and fees, and any supplier who is not registered for GST. That last one catches people constantly. A tradesperson under the registration threshold can invoice you without GST, and if you code it as though there was some, you have claimed a credit that does not exist.

The fix is to read the invoice rather than assume. If the supplier has not shown GST and has not shown an ABN, there is nothing to claim.

Claiming the full amount on a car or a phone

If something is used for both business and private purposes, you can only claim the business portion. Vehicles, phones and home internet are where this goes wrong most often. Claiming one hundred percent of a phone bill when you plainly use the phone for personal calls is an error, and it is an easy one for the ATO to ask about.

Work out a reasonable percentage, write down how you arrived at it, and apply it consistently.

Treating wages as an expense on the BAS

Wages are not a GST expense. There is no GST on wages, so they do not belong in your GST claim at all. They appear on the BAS through PAYG withholding, which is a different field entirely. Mixing these up overstates your credits and understates what you owe.

Getting the timing wrong on cash versus accrual

If you report on a cash basis, GST is counted when money actually moves. On accrual, it is counted when the invoice is issued. Businesses that switch software, or change bookkeepers, sometimes end up with a mix of both, which produces a BAS that reconciles to nothing.

Pick the correct basis for your circumstances and stay on it.

Lodging late, or not at all

The due dates for standard quarters are the 28th of the month after the quarter ends, except for the December quarter which is due on 28 February. Lodging late risks penalties and interest, and it puts you on the radar for the wrong reasons.

Worth knowing: when a registered BAS agent lodges for you, concessional due dates can apply, which buys legitimate extra time. That is a benefit of using an agent that many business owners do not realise exists.

Not reconciling before you lodge

The single most useful habit. Before the BAS goes anywhere, your bank account should reconcile, your GST accounts should agree with your reports, and anything sitting in a suspense or unallocated account should be dealt with. A BAS built on unreconciled books is a guess.

None of this is complicated on its own. It is just relentless, and it is exactly the sort of work that gets squeezed out when you are busy running the business.