BAS and GST Compliance Guide – Mastin Harris Accountants

Tell it like it is: Most BAS problems come from (1) wrong GST coding, (2) missing records, or (3) lodging late. This guide is built around those three risk areas.

1) GST registration — are you required to register?

If you should be registered and you’re not, everything downstream becomes messy (and can be expensive to fix).

Your business GST turnover is $75,000 or more (registration required).
Your not-for-profit GST turnover is $150,000 or more (registration required).
You provide taxi/limousine or ride-sourcing services (GST registration required regardless of turnover).
You want to claim fuel tax credits (GST registration required).
You know whether you report GST monthly, quarterly, or annually (and it matches what’s in the ATO portal).

If you’re nearing the threshold, talk to us early so you can plan pricing and cash flow (GST collected isn’t “yours”).

2) BAS basics — get the foundations right

A BAS is a reporting form. The numbers come from your bookkeeping. If the bookkeeping is wrong, the BAS will be wrong.

What you should have in place

You have one main accounting file (Xero/QBO/MYOB etc.) and you’re not running “shadow spreadsheets” with different totals.
Bank feeds are matched and coded — but also reviewed (feeds don’t “know” GST rules).
You reconcile bank accounts to bank statements each period.
You have a process to capture receipts/invoices (photo upload, email-to-file, or weekly scanning).

Before you lodge

GST on sales looks reasonable compared to revenue (no obvious spikes/drops without a reason).
GST credits aren’t inflated by private spend or non-creditable items.
Any big one-off items are checked (asset purchases, refunds/credit notes, insurance payouts, deposits).
You can explain the result in one sentence (if not, don’t lodge yet).

3) Tax invoices — compliant invoices and clean records

If invoices aren’t compliant, GST credits get harder to defend and ATO queries get more painful.

The ATO has specific requirements for tax invoices, including what needs to be included and when a tax invoice must be provided.

Sales invoices (you issue)

Your invoices show your business name and ABN.
Invoice date is shown.
What you supplied is clearly described (and quantities where relevant).
GST is shown correctly (or clearly marked as GST-free / input-taxed where relevant).
You handle credit notes/adjustments properly (don’t just “delete” the invoice).

Supplier invoices (you receive)

You keep tax invoices/receipts for expenses you’re claiming GST credits on.
You don’t claim GST credits without evidence (especially on larger purchases).
You attach invoices/receipts in the accounting file where possible (makes audits far easier).

If you want, we can provide an invoice template that aligns with ATO requirements and your branding.

4) GST coding — the “make or break” step

Most compliance issues are simply wrong GST codes (especially mixed supplies and private use).

Sales coding

You know what you sell that is taxable (GST applies).
You know what you sell that is GST-free.
You know what you sell that is input-taxed (generally no GST credits on related purchases).
Mixed invoices are split correctly (not “one GST code for everything”).

Expense coding

Private transactions are excluded (or apportioned) — meals, vehicles, phone, home internet, etc.
You don’t claim GST credits where GST wasn’t actually charged.
You review coding on subscriptions, fuel, and contractor invoices (these are common error zones).
If you’re unsure, you ask before lodging (not after the ATO letter arrives).

5) GST credits — claim what you’re entitled to (and only what you can support)

GST credits are valuable. They also get reviewed. Keep it clean.

You only claim GST credits for business-use expenses (private portion excluded/apportioned).
You keep tax invoices/receipts to support your GST credits.
You don’t claim credits for input-taxed activities where credits generally don’t apply.
You review large claims and keep the paperwork (assets, fit-out, equipment, vehicles, bulk stock buys).
You reconcile GST balances and run a GST summary report before each BAS.

6) BAS due dates — set reminders and avoid penalties

Due dates vary depending on whether you report monthly or quarterly, and whether you lodge online or through an agent.

You know your reporting cycle (monthly/quarterly/annual).
You’ve got BAS due dates in your calendar (not “I’ll remember”).
You allow at least a week before due date for review and fixes.
If cash flow is tight, you talk to us early (late is always worse).

We recommend using the ATO’s published due dates as the single source of truth (they can change).

7) Record keeping — make compliance easy

If you can’t produce records quickly, you’re not really “compliant” — you’re just hoping you won’t be asked.

Records you should keep

Sales invoices, income records, and any credit notes/adjustments.
Supplier invoices/receipts and supporting documents for GST credits.
Bank statements and reconciliations.
Asset purchase documents (equipment, vehicles, fit-out) and finance paperwork.
Contracts, agreements, and anything “non-standard” (it’s what the ATO asks for first).

Retention and storage

Records are kept for at least 5 years (and longer where required in certain situations).
Digital copies are readable and accessible (not locked in someone’s phone gallery).
You have backups (cloud + backup is ideal).
You can retrieve key documents within a day if asked.

8) A simple BAS workflow (monthly or quarterly)

Keep it boring and consistent. That’s how you stay compliant and avoid surprises.

Week 1 after period end

Make sure all sales invoices are raised (no missing revenue).
Upload all supplier invoices/receipts and allocate GST correctly.
Match bank transactions and flag anything you’re unsure about.

Before lodgment

Reconcile bank accounts to the statement.
Run a GST summary report and sanity-check totals.
Confirm you have supporting documents for major GST credit claims.
Put funds aside for the BAS payment so cash flow doesn’t blow up the due date.

ATO references (Australian sources)

These are the primary references the guide is based on.

General information only. This guide doesn’t consider your specific circumstances. GST outcomes can differ by industry and transaction type. If you’re unsure how something should be treated, ask before lodging.

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