With the September quarter BAS coming up, now is a good time to check that your GST credits are properly backed up. The most common problem is a missing tax invoice.
The rule
If you are registered for GST, you can generally claim a GST credit for the GST included in the price of things you buy for your business. For a purchase over $82.50 including GST, you must hold a tax invoice to claim the credit. For purchases of $82.50 or less, the ATO says you should hold a tax invoice, cash register docket, receipt or invoice.
A tax invoice has to show more than a bank transaction does. For purchases over $82.50 it must show each taxable sale, the amount of GST to be paid and the total amount to be paid. A card statement on its own is not enough.
If the invoice is missing
You can ask your supplier for one. The ATO says the supplier has 28 days to provide a tax invoice after you ask. Wait until you have it before you claim the credit, even if that falls in a later reporting period.
What to do
- Capture invoices at the time. Photograph paper receipts or forward emailed invoices into your bookkeeping app the same day.
- Check before you lodge. Before finalising your BAS, scan the larger purchases and confirm each one has a matching invoice.
- Chase suppliers early. Ask for missing invoices as soon as you notice, not on the day the BAS is due.
- Keep them. The ATO says to keep GST records, including tax invoices, for five years.
- Claim only your business share. If a purchase is partly private, only the business part qualifies.
A few minutes of checking each quarter can protect credits that would otherwise be knocked back in a review. If you are unsure whether a document counts, ask your accountant.