Amending your activity statement
Once you have lodged your latest activity statement, you may realise that something has been left out or you have neglected to include a particular item. The Australian tax system is based on “self assessment”, which means the ATO generally takes your word, under our guidance, and bases its assessment on the information it has been provided.
But this is not to say that the ATO may not check the information it has been given if, for example, its data matching activity flags a concern. If an inadvertent error slips past the keeper, there are options to make it right.
It is not all that uncommon for business owners to want to make a change to a business activity statement (BAS) that has already been lodged — often there can be an unclaimed credit that simply slipped your mind, or you remember that you received some other form of income.
For example, a not uncommon situation arises when a business owner has already claimed fuel tax credits based on the intention to use the fuel in a certain way, but subsequently uses it in a different way. An error can be either on the credit or debit side. Again using fuel tax credits as an 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 were entitled to.
A debit error means you claimed more tax credits than you were entitled to. This can 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 only the fuel intended 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. If you made multiple errors in a BAS period, you must treat each error individually when determining if it can be corrected and how to correct it. Apart from these specific circumstances, there are also those straight-out mistakes that we all make from time to time, or you could 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 correct many previous GST and fuel tax credit errors, to make claims for previous periods or to vary a PAYG instalment. A four 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 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 effect of the amended assessment is the day it is adjusted on your running balance account. However if the ATO does not accept the revised amounts in full, it will issue a notice of amended assessment.
If 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. This means you’re likely to receive concessional treatment for any penalties and interest charges that may apply. (You will still have to pay any outstanding tax or overpaid credits, and we may have to ask for a reduction in interest charges for you.)
Harper Group Chartered Accountants Frankston Ph 03 9770 1547
Disclaimer: All information provided in this article is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.