Common GST Coding Mistakes

Some businesses are making simple mistakes reporting their GST. The key is to be aware of common issues so you can avoid them. Here are the top mistakes that we see regularly.

1. Claiming GST against all expenses

There are expenses that do not have a GST component, they include:
  • Bank fees (other than merchant fees)
  • ASIC fees
  • Motor vehicle/loan repayments
  • Donations
  • Entertainment expenses
  • Interest

2. Claiming on GST for private purchases

Items like personal loan, director’s fee and other purchases for private consumption cannot have the GST credit collected on you BAS statement

3. Claiming GST credits on purchases where the supplier is not registered for GST

Check the source invoice to see if it has GST. You can easily find out whether your supplier is registered for GST by doing a search on the ABN Lookup website. Suppliers are required by law to provide you with an ABN when you purchase goods or services.

Understanding goods and services tax (GST) is essential for businesses, but with so many rules and guidelines it’s easy to be confused. If you are unsure about certain transactions of GST treatment, we can always provide support and guidance.

Author

Linda Edwards