Common BAS mistakes sole traders make, and how to avoid them

Claiming a credit without a valid tax invoice

To claim GST on a purchase over $82.50 including GST, you need a valid tax invoice from the supplier. A bank line or a credit card slip is not enough. If the invoice shows the supplier’s ABN, the date, a description and the GST amount, you are covered. If you cannot get one, you cannot claim the credit, though you may still be able to claim the expense. See tax invoice requirements.

Claiming GST on things that have none

Wages, bank fees, interest, rent from non-registered landlords, government charges, and many insurance and stamp duty components carry no GST. Dividing every payment by 11 will overstate your credits. Check the invoice instead of calculating. See which expenses have no GST.

Claiming the full GST on private or mixed purchases

If a phone, car or meal is partly private, the GST credit is limited to the business share, just as the deduction is. A single "business" tick on a bank line is a common way for this error to arise. Work out the percentage and apply it to both. See private use and business percentage.

Using the wrong label or the wrong basis

Total sales go at G1 including GST, and the GST on sales goes at 1A. Credits go at 1B. Putting the GST-exclusive sales figure at G1, or entering the GST amount at the wrong label, is a very common slip. See BAS labels explained.

Also check which GST accounting method you use. A cash basis reports sales when paid. An accruals basis reports when invoiced. Switching without realising causes sales to be counted twice or missed. See cash vs accrual GST accounting.

Counting transfers and loans as income

Money you move from savings, a loan you receive, or a refund from a supplier is not sales income. If it is entered at G1 it inflates your GST, and often your income tax. Reconcile each deposit against an invoice before including it. See bank reconciliation for sole traders.

Missing income paid through platforms

Payouts from Stripe, Square, PayPal, Uber or Airtasker are net of fees, so the deposit does not equal your sales. If you report only the deposits, your sales are understated. Use the platform’s summary to record the gross amount and the fee separately. See payment processor fees and GST.

Forgetting adjustments

Bad debts, changes to an earlier invoice, and goods taken for private use can all need an adjustment to your GST. They are easy to miss because nothing appears on the bank statement. See bad debts and GST.

Lodging late or not at all

A BAS is due even when you had no sales, and a nil BAS is still lodged. Late lodgment attracts penalties that grow, and interest on unpaid amounts. If you have missed one, lodge it as soon as you can and ask the ATO about relief. See missed a BAS, what to do.

A checklist before you lodge

• Have you reconciled the quarter against the bank statement?
• Does every credit have a valid tax invoice?
• Have you removed private and non-GST items?
• Do G1, 1A and 1B agree with your records?
• Are your PAYG instalment amounts correct for the quarter?
• Do you have the cash set aside to pay it?

If you find an error after lodging, see fixing a mistake on a lodged BAS.

How FlowFi helps

FlowFi works from your bank statement to build the BAS labels, flags lines that look like transfers, private spending or missing GST, and shows what is ready to copy into ATO Online. It does not lodge for you, so you review and enter the figures yourself.