Ever heard of a GST tax scam? No? Well, let me tell you, it’s pretty red hot! Recently, there was a scam targeting the Australian Taxation Office (ATO) that involved videos on social media offering incorrect advice on how to claim more money through GST refunds.
Sneaky, right? Also, illegal.
Since the ATO investigation started, more than $2 billion has been reclaimed, and a further $2.7 billion stopped from being transferred. The lesson here? Always be cautious and verify any communication claiming to be from the ATO and if you’re unsure, ask a licensed tax professional!
Why did the GST tax scams videos go viral?
Because they were "taxing" to watch!
Horrible dad joke, but a good reminder to not get your financial or tax advice from social media!
Now, more than ever, its important for your business to ensure that your GST tracking on expenses is airtight. Accurate GST tracking not only helps your business comply with tax regulations but also enables you to claim those GST tax credits correctly.
What are GST tax credits and how can businesses benefit?
GST tax credits, also known as input tax credits, are credits that businesses can claim for the GST included in the price of goods and services they buy for their business.
Businesses can benefit from GST tax credits by reducing the amount of GST they owe or claiming a refund for any excess credits. This can help businesses improve cash flow and reduce the overall cost of goods and services purchased (understand GST tax credits in more detail).
But there's a catch. Attempting to manually manage your business expenses and tracking GST accurately is a bit like trying to juggle flaming torches – it's risky and can end in you getting burnt! Manual processes are prone to errors, which can lead to time-consuming work for your finance and admin employees.
Not to mention the increased risk of non-compliance with tax regulations, which can result in penalties and fines.
Yikes.
Strategies for managing GST tracking and claiming tax credits correctly
- Maintain detailed records: Keep detailed records of all purchases, sales, and expenses related to your business. This includes invoices, receipts, and other relevant documents (digital records are best practice for efficiency and accuracy). While is not always needed to have a tax invoice on file from your supplier if the purchase is less than $82.50, it’s definitely best practice to do so.
- Regular reconciliation: Regularly reconcile your GST records with your business transactions to identify any discrepancies or errors.
- Stay informed: Stay updated with the latest GST regulations and guidelines to ensure compliance and accurate reporting (see advice from a licensed tax professional).
- Automate expense management: Utilise automated apps and accounting software to automate GST calculations and ensure accurate reporting. This will make the GST tracking process more efficient and reduce the risk of errors.
Automating expense management - the Budgetly way!
Automating your expense management can significantly enhance the accuracy of GST tracking. Budgetly auto extracts the GST from every receipt uploaded via the app, for highly accurate and fast GST tracking.
Budgetly allows you to empower your employees to easily upload their expense receipts and automates expense categorisation, ensuring that all expenses are accurately recorded and GST is tracked correctly.
By integrating with Xero or your accounting software, Budgetly automates the GST extraction process, making it faster and easier; plus it helps your business claim tax credits more efficiently.
“We’ve saved twenty one thousand dollars because now, everything goes through Budgetly."Stanley Tang, Finance Manager, Connecting Families |
If your business uses another expense management solution that isn’t Budgetly, run a quick audit on if they can do the above for you. If you’re paying money for software that manages expenses, the above should be a given feature too.
So, remember, airtight tracking of GST on business expenses is crucial for compliance with tax regulations and claiming GST tax credits correctly. By following the strategies mentioned above and utilising automation solutions like Budgetly, your business can improve its GST tracking practices and avoid potential errors and penalties.
This is article not taxation advice. If you require taxation advice, please see a licensed professional.
If you’d like to eliminate time-consuming admin work with instant budget allocation, automatic GST extraction and real-time reporting, then schedule a demo with us today, or watch a 10-minute recorded demo.
