As soon as we have filed your latest activity statement, you might realise that something has been left out or else you have forgot to include a particular item. The Australian tax system is based on “self-assessment”, meaning the ATO usually takes your word, under our guidance, and bases its assessment around the information it's been provided. But this isn't to say that the ATO might not look into the information it's been provided if, for instance, its data matching activity flags an issue. If the inadvertent error slides past the keeper, you will find alternatives to make it right.
It is not all that unusual for businesses to need to make an alteration to a business activity statement (BAS) that has already been lodged — often there may be an unclaimed credit which simply slipped your mind, or you remember that you received some other type of income.
For instance, a quite normal situation arises when a business owner has already claimed fuel tax credits in line with the intention to make use of the fuel in in certain manner, but consequently uses it in another way. An error could be either on the credit or debit side. Again using fuel tax credits for example, a credit error means you claimed less fuel tax credits than you were entitled to — for example, you used a lower rate than you had been entitled to.
A debit error indicates you claimed more tax credits than you had been entitled to. This will occur if you:
- Made clerical errors, for example, double counting some fuel purchases
- Over calculated your eligible quantity of fuel
- Used a higher fuel tax credit rate than you were entitled to
- Claimed fuel tax credits for all fuel you acquired, not just the fuel meant for use in an eligible activity.
If you did not make an adjustment in the BAS period in which you become aware an adjustment was required, it becomes an error. In the event you made multiple errors in a BAS period, you have to treat each error individually when determining if it can be corrected and the way to correct it. Apart from these specific circumstances, there's also those straight-out mistakes that we all make every so often, or you might have forgotten to tell us something about your tax affairs at our appointment.
How we can help
We can use your current activity statement to improve many previous GST and fuel tax credit errors, to make claims for previous periods or to vary a PAYG instalment. 4 year time limit applies to claiming refunds and credits, and this “period of review” commences from the day you were required to lodge the activity statement.
If you can’t make such corrections on your current activity statement, we may have to revise the original BAS for you. Note that the process for correcting mistakes and making claims for previous periods can depend on the specific tax or type of credit involved, so you may need to check with us.
If you need to correct information you provided on a BAS and are not eligible to correct it on a later statement, you may need us to complete a revised activity statement. The important thing is to make sure that as soon as you realise that the information you have reported to the ATO is incorrect or incomplete, that you ask us to take actions to correct it.
And the way we can do this is to revise a BAS or apply to make an amendment (in fact the ATO generally treats a revised activity statement as an application to amend an assessment).
If the ATO accepts your revised amount in full and also the amendment is made within the period of review, the revised statement will be taken to be a notice of amended assessment. The date of after effect of the amended assessment is the day it is adjusted in your running balance account. However if the ATO does not accept the revised amounts entirely, it'll issue a notice of amended assessment.
In case your revision increases the tax you owe or reduces your credit, the ATO will generally treat your revised activity statement as a voluntary disclosure of unpaid tax or over-claimed credits. What this means is you’re likely to receive concessional treatment for any penalties and interest charges which may apply. (You will still have to pay any outstanding tax or overpaid credits, and we might have to request for a reduction in interest charges for you.)
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