The ATO has announced that one of its compliance focuses for the upcoming year will be GST compliance.
The program will involve a combination of compliance and education to help business owners understand what is involved in meeting their obligations.
Key areas of GST compliance focus will be registration, accuracy in BAS reporting, and GST fraud. The ATO will have improved data matching capacities to help in the course of investigation. External sources that the ATO will be seeking records from include banks, industry suppliers and other government agencies. This data will be electronically cross-matched with tax returns and business activity statements.
To ensure that your business doesn’t accidentally fall afoul of the new program, we have compiled this brief overview of GST compliance requirements:
Businesses that have an annual turnover of more than $75 000 are required to register for GST. However, if a business has an annual turnover of less than $75 000 they may voluntarily register for GST. In the event that your annual turnover fluctuates, it is advisable to seek advice from your accountant in regards to whether or not you should be registered for GST.
Getting your BAS right
It is very common for businesses to make mistakes on their monthly/quarterly business activity statements. However, the ATO considers that a majority of these mistakes are inadvertent, and as such, are relatively lenient in allowing for corrections. It is generally easier to get your BAS right if you are lodging online, as there are various safeguards in place.
Avoiding common mistakes
There are a number of simple mistakes that the ATO has identified as particularly common in BAS reporting, with the vast majority being easily avoidable. Particularly common errors include:
• Entering dollars and cents as opposed to whole dollar amounts
• Claiming GST on purchases that are not eligible
• Incorrect calculations, and;
• Using the wrong tax codes and entering information in the wrong sections.
Call (02) 4926 2300 or email us.
To discuss getting your GST right along with any other questions about your business, please give the team at Leenane Templeton a call.