Home – New Forums Money matters Matching of BAS and Tax Return

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  • #979061
    CG
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    Situation:
    Sole trader’s BAS for 4th Q already submitted directly (calculated using Saasu, but submitted on paper).

    After seeing his accountant with the figures for his tax return, he is advised to adjust the proportion of the total rent for the commercial building that he’s deducting from his business expense claim, to account for private use of a tiny domestic area at the back of the property. The rent for the premises had been increased substantially, but as the domestic area is very run down, its value for private use could not be considered to have increased proportionately with the commercial rental.

    As it happens the landlord is not registered for GST so the rental has no GST element that can be claimed back. Which fortunately means that the figures for GST on the BAS are not affected. But the figure for total expenses on the BAS statements for the year will now differ slightly from the total expenses claimed for the business in the tax return.

    The accountant is not interested in this aspect since he wasn’t involved in the BAS returns. But do the ATO match BAS totals that do not include GST so precisely against the tax return?

    #1111707
    Past-Member
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    I don’t see why the Accountant can’t adjust for you in the annual tax return. I do my own BAS but I present all details and payment receipts of the the BAS to my accountant with the annual tax return. They check if there are any adjustments to be made then and adjust accordingly. This also applies to PAYG.

    Accountants also have access electronically to all interest statements for bank accounts which will affect your tax, and your health fund eligibility. So, they should be able to adjust.

    I also think you can make an adjustment to a BAS in the next quarter if you have to. There’s an area for it.

    This is not legal advice. But you should check with the ATO and your accountant. Or get a new accountant.

    #1111708
    ntgd
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    The ATO does data matching, however I am not sure will it be to the dollar.

    Both you and your accountant can adjust the BAS via an amendment. Since you know exactly what to adjust it should be an easy task and there is no GST adjustment, so no additional charges. You can requst an amendment BAS form from the ATO via a phone call.

    Why is there a domestic area for the commercial property you rent? What is it use for?

    Private usage is based on area in general, the % shouldn’t change as rent goes up. However as rent goes up the $ amount for the private use goes up as well as your total rent still go higher.

    You may want to consider is your accountant interested in helping your business or not. Accountant really should focus on more than just the compliance side.

    #1111709
    CG
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    Thanks to both of you for your prompt responses.

    Yes, we’ll certainly be looking for a new Saasu-qualified accountant for the coming year. We’ve only been using Saasu since January and it has made the record-keeping so much easier, especially compared with the manual stripping out of GST for the tax return I used to have to do in Excel spreadsheets.

    The very fact that the accountant didn’t raise the problem of discrepancy with the figures on the BAS is a pointer, together with the lack of any constructive advice over the years. It’s good to know that a BAS adjustment could be done next quarter. In the overall picture it’s really quite a small change.

    To ntgd: it’s a retail shop in an old terrace building; they often have a domestic area at the back or upstairs, in this case a single room with kitchenette & shower. Has been sub-let in the past; now in need of flooring & other repairs, so is being used on a temporary basis by the business owner.

    #1111710
    James Millar
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    Some items need more precise reconciliation with ATO than others (this is probably not one of them). Materiality comes into play. Cost comes into play.

    The accountant may have genuine reasons (including the above) for not engaging in an amendment process so it’s hard to determine if there has been any complacency.

    It’s important to understand the accountant’s role (and process) and perhaps they have not articulated that well. We conduct an annual high level BAS review / reconciliation process for our clients when preparing their annual reports. The process includes a risk assessment of any discrepancies and their relative importance and materiality. In other words some discrepancies are ok and we don’t recommend that they all be addressed (unnecessary expenditure). Good bookkeepers will generally eliminate these issues and know what is important and what isn’t.

    From a technical perspective there are also threshold allowances in the GST Act for increasing adjustments to be addressed in future periods. the exact number of periods forward you can go depends on the quantum of the GST adjustment and the size of your business.

    Saasu is a good choice and any semi progressive accountant should be able to assist you with it.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1111711
    CG
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    Thanks, James. Yes, in this case poor ‘articulation’ is perhaps to blame, but this accountant has never even floated the idea of a thorough review such as you describe. I don’t think he is even ‘semi progressive’.

    JamesMillar, post: 124394 wrote:
    Saasu is a good choice and any semi progressive accountant should be able to assist you with it.

    I’ve located a couple of alternative accountants who are members here (one is a CA) and within easy distance. The sole trader does not drive and far prefers face-to-face rather than telephone contact. But both are Xero partners, not Saasu. Given that the Saasu entries would continue to be done in-house, how readily might a Xero accountant be willing to use figures prepared in Saasu? Or do we just have to meet them and find out?

    #1111712
    EmbalmSkincare
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    Hi CG,

    That does sound a lot like my previous accountant…

    Good luck!

    Regards,
    Mel

    #1111713
    James Millar
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    In my view an accounting firm should be prepared and equipped to work with any of the major platforms (Saasu, Xero, MYOB, QBooks etc). This is especially the case with cloud platforms as they have no local machine software hassles so everyone can access very easily. If you understand a general ledger (as an accountant should) then you can drive these programs – simple.

    Some of the accountants you are seeing may be professional partners with Xero and trying to secure discounts or rebates etc by having more clients on their list (there is nothing wrong with that – especially if they are rebating the discount back to you). Even though we’re professional partners with most of the majors (which we pay to be) we have never sold the software to a client and aren’t really interested in going down that road.

    If you’re invested in Saasu then stick with it. Your accountant can work around your requirements on that front.

    I’m not sure where you’re based (or if location is an issue) but feel free to drop us a line if you have no luck.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1111714
    CG
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    Thanks again, James. Camberwell is unfortunately rather too far away for us, but your assistance here is much appreciated.

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