Lodging a business activity statement (BAS) is something all business owners will be familiar with, however, mistakes can still be made. You must ensure that you have reported carefully and correctly to avoid incurring a penalty. In the event an error has been made in the reporting of your activity statements, here is what you will need to know to rectify the misreporting.
If you have made a mistake or left something out on a previous activity statement, in most cases you are able to correct the errors on your next statement or lodge a revised statement. Remember, correcting a mistake on an earlier BAS is different from making an adjustment.
An error or mistake relates to an amount that was incorrect at the time of lodgement and can be fixed by revising the original BAS or making the relevant changes on your next BAS. Examples of a mistake include:
- Clerical or transposition errors.
- Double-counting of your purchases.
- Reporting a taxable sale/purchase as GST free, or reporting a GST free sale/purchase as taxable.
An adjustment relates to a report that was correct at the time of lodgement but a situation has since occurred that changes the amount of reported GST. When you become aware of the need for an adjustment, you can report it in the activity statement for the current reporting period. Examples of when to make an adjustment are:
- If the price of a purchase changes.
- If the goods are returned and the sale has been cancelled.
In order to keep a level playing field for small businesses that are doing the right thing, the ATO takes stronger action against those that they believe are deliberately attempting to cheat the tax and super systems. To avoid falling into this category, all mistakes must be corrected within four years. You can do this through myGov, on the Business Portal of the ATO, from your business software if it is enabled for Standard Business Reporting (SBR), or by contacting the ATO.