Being Jack of All Trades can land you in hot water with BAS
IT’S PERHAPS EASIER TO do your own bookkeeping these days than it used to be; particularly if you’re using a cloud accounting program like MYOB, Xero or QuickBooks, which are among the easiest, yet robust, accounting applications currently on the market.
But even so, there are many aspects of Australian tax that, while accounting software makes it possible to carry them out yourself (like business activity statements, for example), it’s not a good idea unless you really know what you’re doing. Here are the three GST mistakes nearly every business owner makes in their bookkeeping.
Claiming GST twice
This is most common when a business has vehicles, machinery, plant equipment, etcetera that are either being leased or are under hire purchase. The business owner’s accountant will typically claim the full GST component for in the first quarter that the business purchased the equipment, but confusion generally sets in when it comes to recording regular monthly payments.
Very often the business owner will record it as GST or a capital expense, and because both show up in their BAS reporting sheet, they end up claiming the GST twice.
Recording GST for all expenses
There are many expenses that do attract GST. They include:
- Motor vehicle registrations
- Bank charges
- ASIC fees
- Paypal transaction fees
- Interest and director fees / drawings.
Claiming GST credits on purchases from suppliers not registered for GST
Not all business owners are registered for GST, and although they should state somewhere on their invoice that no GST has been charged, oftentimes they’ll leave you to assume that. As a general rule of thumb, if the invoice doesn’t show an amount in the GST column, there’s a good chance the supplier isn’t registered. To make sure, though, visit the ABN Lookup Page and search their ABN.
Accounting software is easier, but Aussie tax remains as complicated as ever
Even though MYOB, Xero and QuickBooks are among the most user friendly accounting software applications on the market, Australia’s tax laws remain as complicated as they’ve ever been. So while you can do your own data entry (reconciling your bank statements), it’s a good idea to hire a BAS or Tax agent to look after the more complicated aspects of your tax and BAS requirements.
Want to learn or brush up your cloud accounting and bookkeeping skills?
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Need help finding a BAS or TAX Agent?
National Bookkeeping is an online directory of local bookkeepers looking to add to their customers. Visit National Bookkeeping to find a suitable and experienced person available to work in your area, or able to work anywhere in the cloud. Alternatively, if you are a bookkeeper looking to expand your client list or find contract work, you can register and become part of our network for free.