How to Handle GST Mistakes with Your Australian Taxes
So you’ve made a mistake on a Business Activity Statement (BAS) that you’ve already lodged with the tax office. Don’t despair! Correcting this kind of mistake is surprisingly easy.
Usually, the best approach is to simply adjust your next activity statement, adding or subtracting the Goods and Services Tax (GST) to the boxes where the amounts belonged in the first place.
However, you’re only allowed to make an adjustment in this way if you meet certain conditions
If you reported for GST on sales incorrectly or overclaimed for GST paid on purchases. You can only fix these kinds of mistakes on current activity statements if you do so within 18 months of the period in which that mistake belonged.
In addition, if the mistake (or the net combined value if you’re correcting more than one mistake) increases your GST payable, the limit to the value of your final adjustment must be $10,000 or less (assuming you have a turnover of less than $20 million).
If you underclaimed for GST paid on purchases. If you didn’t claim for GST on a purchase, then you can fix this mistake on a current activity statement if you do so within four years from the date of that mistake. Happily enough, there’s no limit on the value you can claim.
The benefit of correcting GST errors on a current activity statement (as opposed to lodging a revised BAS for a previous period) is that you’re not liable to any penalties or interest on underpaid amounts.
So how do you adjust a current activity statement for a mistake in the past? Imagine you realise that you missed claiming the GST on a supplier invoice. The invoice was for $1,100, including $100 GST. All you have to do is add $1,100 to the value that you already have in G11 (non-capital purchases) and add $100 to the value you already have in 1B (GST on purchases). The same principle applies if you make a mistake with a customer invoice, except that you adjust G1 (total sales) and 1A (GST on sales).
If you need to lodge a revised activity statement, by far the easiest method is to lodge this revision online, assuming you’ve registered with the ATO online portal. (And if not, don’t delay — go to Australian Taxation Office and follow the prompts for online registration.) Alternatively, you can phone 13 28 66 to obtain an activity statement revision form through the post.