According to the ATO, the most common GST reporting errors are:
Transposition and calculation errors
These simple mistakes regularly occur during manual inputs, the ATO said. It urged businesses to double check that all calculations and figures are correct before a BAS is lodged.
Not having tax invoices
Another major mistake is not having records (i.e. tax invoices) in order to claim GST credits. Invoices are required as proof of all business purchases that cost more than $82.50 (inclusive of GST).
Suppliers must provide tax invoices within 28 days of a request being made.
The ATO recommends waiting until the invoice is received before claiming GST credits, even if that pushes it into a subsequent reporting period.
Incomplete or incorrect tax invoices are also not considered as being legitimate for tax purposes.
Not knowing what is actually GST applicable
This is particularly pertinent when it comes to food, the ATO said, meaning it is valuable to check what is GST applicable prior to claiming – to avoid making claims that are not legitimate, and on the flip side, omitting legitimate claims and reducing potential credits.
More information on GST and food can be found on the ATO website.
Accounting system errors
According to the ATO, coding errors in accounting systems can see transactions incorrectly classified.
It recommends checking business systems against its GST governance and risk management checklist for large business.
Not correcting identified mistakes
Even with the greatest diligence and oversight, mistakes can and do slip through the cracks – after all, we are all human.
But another error some businesses make is not correcting mistakes that are discovered after a BAS has been lodged.
The ATO said that errors can be corrected on subsequent statements. By being proactive in this manner and correcting any mistakes, businesses will avoid penalties and general interest charge (GIC) on that error.