Small Businesses can make a few most common GST mistakes which can land them in trouble. Goods and Services Tax (GST) forms a major chunk of the government revenue. But at the same time, it can also create a whole lot of confusion, especially among small businesses. Unfortunately, these mistakes can lead to costly penalties and fines. In this blog post, you can check out all the common GST mistakes small business owners make and also discuss how you can avoid them.

Mistake #1: Failing to Register for GST

Many small business owners fail to register for GST. If your business has a turnover of $75,000 or more, you must register for GST. Also if you are a non-profit organisation that has a GST turnover of $150,000 or more, you should immediately register for GST. If you fail to register, you can face penalties and interest charges. You will also not be able to GST on your business expenses. 

Mistake #2: Failing to Keep Accurate Records

For staying GST compliant, you need to keep accurate records. You must make sure that all of your sales and purchases are routinely recorded, as well as that your company’s receipts and invoices are properly maintained. You face fines and penalties if you don’t maintain correct records. 

Mistake #3: Failing to Report Cash Transactions

Now in case you receive cash payments of $10,000 or more, you will have to report these transactions to the ATO. If you come across such transaction you will have to report them to AUSTRAC in a report within 10 business days.

Mistake #4: Claiming GST Credits on Non-GST Items

In a hassle, you as a small business owner can make the mistake of claiming GST credits on items not subjected to GST. These are common aspects like bank fees, wages, and interest charges. So you need to ensure that you claim GST credits only on those items that have GST included in their pricing. 

How to Avoid These Mistakes?

Now those were just a few common GST mistakes we discussed. And to avoid those, it will be best to seek professional advice from a tax accountant. This expert personnel can guide you through the entire process of GST so that you have peace of mind. Let’s see what else you can do. 

• The first thing you can do is to educate yourself and take an effort the understand GST obligations and how the system work. For this, you can check out the ATOs official website which is an excellent resource for this. 
• Secondly, you can continuously review your GST processes. You can also identify potential issues and make necessary adjustments. You can review your records and check out what you are charging and whether you are claiming GST correctly or not. 
• Also, remember to pay your taxes on time and this will keep you away from penalties and fines from the ATO. Make sure you are on top of your estimated tax payments and fill out your tax return on time. 
• If you can use accounting software it would be best as it can help you keep your records accurate and also streamline your BAS lodgement process. 

Conclusion

GST mistakes can be a serious problem and small business owners or especially the ones who are just starting can find it very difficult to deal with them. You need to get a piece of professional advice from a prominent tax agent and for this, you can rely on KPG Taxations. That’s because it has expert tax agents and accountants who are always ready to deliver accurate advice to small businesses by understanding their concerns personally. You can trust their expert advice as they will not let any GST mistakes happen.