GST mistakes to avoid this tax season
Avoid GST mistakes this tax season
Take note that those who generate irregular income and not for profit are not considered by the ATO as being in business. The ATO considers them as having a hobby so they are unable to claim GST credits on purchases. Check these facts out to ascertain if you actually have a business:
- Do you repeat an income producing activity?
- Is the size and scale of this activity consistent with other businesses in the industry?
- Do you have commercial sales?
- Do you promote and advertise this activity to attract clients?
When you registered for GST, you would have chosen either a cash basis or accrual accounting method. If you chose cash basis, you would account for income and expenses at the time you receive or pay the amount whereas if you chose accrual, you would account for it at the time it is invoiced. If you’ve chosen the wrong accounting method when doing your BAS, it will lead to reporting incorrect figures.
Another common mistake is not reporting or charging GST on the sale of business assets. If you sell a company asset and you are registered for GST, you should include GST as part of the sale. If, on the other hand, you are a sole trader or a partnership, some expenses may be apportioned to personal and business usage and you can claim the GST on the portion that was used for business only.
Goods & Services Tax
Keep in mind that several business expenses do not include GST such as general bank fees (not merchant fees), gift cards, donations, phone bills and overseas purchases. You should review your invoices and check if they include GST. That said, do not forget to keep all your receipts and accounting records.
Know when to get help if you are having doubts. Speak to our business accounting specialists so they can address any concerns with your accounts.
As you look for different ways to grow and improve your business, seeking professional advice from a business consultant could prove to be an important and helpful decision.
You can click here to speak to business experts. We would love to help you formulate investment strategies and streamline your processes to take your business to the next level. Our goal is to help you grow your business, find ways to invest more and increase your productivity.
You can click here to speak to a business, accounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.
Email Address: email@example.com
Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437