Tax

Beware of Penalties When Doing Your Own BAS

Many clients prepare their own quarterly BAS as a way of keeping their accounting costs down. Did you know that the ATO can impose penalties for incorrectly reporting your tax liabilities or even amending a BAS? These short term savings could end up costing you more in the long run.

As a director of a company, it is in your best interests to ensure that there are no unpaid and unreported Pay As You Go (PAYG) withholding or Superannuation Guarantee Charge (SGC) amounts, as it is a very real possibility that the ATO could issue you with a Director Penalty Notice (DPN). The ATO has the power to commence the recovery of any unpaid or unreported liabilities against a director under the DPN regime and as a director, you can also be personally held liable for the debt.

Did you know that the ATO is also able to issue a DPN to a director for an amended BAS? Typically, the BAS is prepared from the internal records that are kept and believed to be the relevant figures. When the end of the financial year rolls around, your internal accounts are sent to us for preparation of the external accounts as well as checking that the BAS’s lodged during the year were correct.

Where a PAYG withholding discrepancy is found and an amended BAS needs to be lodged, chances are the unreported liability was not advised to the ATO in the required time allowed. In this scenario, where the ATO does issue the company with a DPN, the liability to the director is unavoidable. You can read more about ATO penalties and fines here.

If you need assistance in preparing your BAS or would like to know how you can avoid the ATO issuing you with a director penalty notice then please contact us.