BAS Review Checklist

Bank Account Reconciliation

Ensure all bank accounts are reconciled up to the last day of the Business Activity Period. This means the closing balance in your accounting software must match the closing balance on your bank statement. If these figures differ, you must locate the error before you lodge the BAS.

Transaction Entry Checks

Verify that every transaction listed on your bank statement appears in your accounting software.

• Check for missing receipts or payments. Look for direct debits, bank fees, and government charges that may have been missed.
• Identify and delete duplicate entries.
• Confirm that every transaction has a valid tax code applied. Items without a tax code will not report correctly to the ATO.

Matching Balances

Compare the Statement Balance in your software to the actual bank statement balance.

• If the difference is small, check for bank fees or interest entries you may have forgotten to enter.
• If the difference is large, check for a transposition error where numbers were entered incorrectly (for example, typing $5000 instead of $500).

Reviewing Unpresented and Outstanding Items

Review the list of unpresented cheques and outstanding deposits. If an item has been on this list for more than a few months, investigate why.

• Contact the bank to see if a cheque has been presented.
• Contact suppliers to confirm if they have received payment.
• Remove stale-dated cheques from the reconciliation and adjust the records accordingly. This ensures your records align with the Income Tax Assessment Act 1997 requirements for record keeping.

Cash Transactions

If you deal with cash, you must reconcile your actual cash on hand to your petty cash records. Count the cash in the tin and match it to the balance in your system. Any discrepancies must be recorded with an explanation before the BAS is finalised.

Electronic Funds Transfer (EFT) and BPAY

Check that EFT payments and BPAY transactions are recorded in the correct month. A payment made electronically on the last day of the month usually processes that night, but sometimes it may not clear until the next business day. Match the transaction date in your software to the date shown on your bank statement to satisfy ATO timing rules.

Regulatory Compliance

Under Taxation Administration Act 1953, you are required to keep records that explain all transactions. This reconciliation process acts as your proof that the figures reported on your BAS are accurate and complete. Do not rely on estimates. The ATO uses data matching to compare your lodged BAS against bank records held by financial institutions. Discrepancies can lead to penalties or audits. Ensure you hold PDF copies of all bank statements for five years as required by law.

Check Labels G1 to G10

Start by checking the total sales at Label G1. This figure must match your total income in your accounting software for the reporting period. Export the Sales Summary or General Ledger report and compare it directly to the BAS. Any difference indicates a data entry error or a missing transaction. If you issue adjustments notes, like refunds or credits, ensure the value at Label G1 is the net sales figure after these adjustments.

Move to the GST-free and input-taxed sales at Label G3. You must verify that every amount included here is legitimate under the A New Tax System (Goods and Services Tax) Act 1999. Common mistakes include mixing up bank interest and basic food items. Bank interest is input taxed, not GST-free. Basic food, such as fresh meat, vegetables, and bread, is GST-free. Processed foods, like biscuits or restaurant meals, are taxable. Check each transaction listed in your GST-free report to confirm the correct tax code was applied.

Check Label G9 for GST-free sales if you are in the retail or hospitality industry. Review your point of sale system reports. Ensure staff are not applying the GST-free code to taxable items like hot takeaway food or soft drinks.

Review your non-capital purchases at Label G11 and capital purchases at Label G12. Check that you have claimed credits for business expenses only. Personal expenses must not appear here. Look for private use of business assets, such as home office electricity or mobile phone usage. You can only claim the business percentage. If you purchased a vehicle for the business, you may need to work out the private use percentage and adjust the GST claim.

Tax Invoice Verification

You cannot claim GST credits unless you hold a valid tax invoice for purchases over $82.50. Under the GST law, a tax invoice must show the seller's Australian Business Number (ABN). It must also show the total price, including the GST amount. If the total price is over $1,000, the invoice must clearly show the buyer's identity or ABN and a brief description of each item sold.

Check your invoices for these details. If an invoice from a supplier is missing the ABN or GST amount, contact them immediately for a corrected copy. Do not claim the credit until you have the compliant document.

GST-Free Sales Verification

Verify GST-free sales by checking the supplier invoices you receive. Ensure they state the sale is GST-free. You cannot assume a product is GST-free just because a similar item is. For example, specific medical aids and certain educational courses are GST-free, but you need written evidence. Keep supplier invoices that justify your GST-free treatment in case the ATO requests a review. Use the correct tax codes in your software, such as FRE or GST, to keep records accurate.

PAYG Withholding Check

You must verify the accuracy of the PAYG withholding amounts reported on your Business Activity Statement. This section focuses on labels W1, W2, and W4. Errors in these labels can lead to incorrect tax liabilities or penalties from the ATO.

Check Label W1 (Total Withholding Amount) Label W1 represents the total amount of tax you withheld from your employees' payments and payments to other businesses during the reporting period.

Do not rely on your bank records alone. You must compare the figure at Label W1 directly against your payroll software reports. For most businesses, this means checking your Single Touch Payroll (STP) finalisation report or the PAYG withholding summary report. Ensure the dates in your software match the dates of the BAS period exactly. If you process payroll through a third-party provider, request a reconciliation report for the period and match it line by line against your BAS.

Check Label W2 (Amount Withheld Where No ABN Quoted) Label W2 is for tax withheld from payments where you did not quote an Australian Business Number (ABN). This usually applies to subcontractors.

Under the Taxation Administration Act 1953, you must withhold 47% from a payment if the supplier does not provide their ABN and a valid statement by form. You must compare the total at Label W2 against your accounts payable records. Look for invoices flagged as 'No ABN' in your accounting software. Ensure you have a valid "No ABN Statement" from the contractor on file. If you cannot find the statement, you may need to issue a payment summary to the contractor.

Check Label W4 (Total Withholding Payable) Label W4 is the net amount you must pay to the ATO or claim as a credit. This figure is your total tax withheld (W1 + W2), minus any PAYG withholding credits you are entitled to claim.

Review your payment summaries and vouchers for the reporting period. If you made a payment to the ATO that was meant to settle a previous quarter's liability, ensure you did not include it as a credit in the current W4 calculation. Under Section 221YKD of the Income Tax Assessment Act 1936, you can only claim a credit if the amount was actually withheld by you during this specific period.

Final Verification Reconcile the total tax taken from employee payslips against the STP data exported to the ATO. If the figures do not match, check for unreported pay runs or manual adjustments. Your payroll system is your primary source of truth for these calculations.

Final Sign-off and Declaration

This section is the most important part of the review. By signing this declaration, you are legally confirming that the information provided to the Australian Taxation Office (ATO) is true and correct. You must not sign this form until you have checked every line item and discussed any discrepancies with your bookkeeper or accountant.

As the business owner, you carry the legal responsibility for the Business Activity Statement (BAS), even if a third party prepares it for you. Under the Taxation Administration Act 1953, the director or proprietor is liable for any errors or shortfalls resulting from lodged documents.

Please read the following declaration carefully before signing.

Business Owner Declaration

I declare that the information contained in this Business Activity Statement for the period [Insert Period] is true and correct. I have reviewed the figures and confirm they represent the business transactions to the best of my knowledge and belief.

I acknowledge that I have a legal obligation to keep accurate business records under Section 262A of the Income Tax Assessment Act 1936. I confirm that all records required to verify the amounts claimed on this BAS have been retained and are available for audit if requested by the ATO.

I understand that the GST claimed has been calculated in accordance with the A New Tax System (Goods and Services Tax) Act 1999. I confirm that:

• Tax invoices have been obtained for all GST credits claimed where the total amount is more than $82.50.
• The supplies made and acquired relate to the business purpose.
• The correct tax codes have been applied based on current ATO guidelines.

I authorise the lodgement of this BAS with the Australian Taxation Office.

I also acknowledge that penalties may apply for false or misleading statements under the Taxation Administration Act 1953.

Signature

Full Name (Please Print)

Date

Position (e.g., Director/Owner)

Checklist Before You Sign

• Bank Feeds: Are all bank transactions up to date and reconciled for the period?
• Wages: Have PAYG withholding amounts been matched against Single Touch Payroll (STP) reporting?
• Superannuation: Is the superannuation liability recorded but not claimed as a deduction until paid?
• Adjustments: Have any private use portions been removed from the business claims?

Label 7D: Fuel Tax Credits

Check the total at Label 7D matches your calculations for fuel tax credits (FTC). This label claims back the excise or customs duty included in the price of fuel used in your business activities.

Verify eligible fuel types You can only claim credits for specific taxable fuels used in eligible business activities. Common fuels include petrol, diesel, and aviation kerosene. Ensure you have not claimed for fuels that are already exempt or taxed differently, such as liquefied petroleum gas (LPG), liquefied natural gas (LNG), or compressed natural gas (CNG). These fuels fall under the Excise Tariff Act 1921 but operate under different credit schemes. Check that alternative fuels like ethanol or biodiesel blends are correctly classified, as they often attract different credit rates.

Confirm eligible vehicles and machinery Credits apply when you acquire, manufacture, or import fuel for use in machinery, plant, equipment, or heavy vehicles for business purposes. Review your records to confirm the fuel was not used in a light vehicle with a gross vehicle mass (GVM) of 4.5 tonnes or less travelling on a public road. These uses are specifically excluded under the Fuel Tax Act 2006. You must have valid business records linking the fuel purchase to specific equipment or jobs. Logbooks and fuel receipts must clearly show the fuel was used in an eligible excavator, bulldozer, tractor, or other heavy machinery, rather than a commercial ute or van driving to a site.

Apply the Road User Charge for heavy vehicles If you operate heavy vehicles with a GVM over 4.5 tonnes on public roads, you must reduce your claim. You cannot claim a credit for the excise duty that effectively covers the cost of road use. The Australian Taxation Office (ATO) sets a Road User Charge (RUC) rate for each financial period. Calculate the number of litres used in heavy vehicles while driving on public roads and multiply this by the current RUC rate. Subtract this total from your overall fuel tax credits calculation before entering the final figure at Label 7D. Failing to apply this reduction leads to over-claiming and potential penalties.

Check calculation methods Ensure you used the correct fuel tax credit rate for the specific date you acquired the fuel. Rates change frequently based on carbon pricing adjustments and indexation. Do not use a single annual rate if the rates changed during the quarter. Refer to the ATO schedule of rates to confirm the exact cents per litre for each fuel type and acquisition date.