When preparing your Income Tax Return, one of the things we check (if you’re registered for GST) is that the income you’ve reported in your Business Activity Statements matches the income reported in your Tax Return.

The ATO is pretty savvy with data matching these days, so if there’s a big difference, they might ask for extra info to explain it. To keep things smooth and stress-free, it’s always a good idea to make sure everything is accurate and up to date before or shortly after lodging your Tax Return. 😊

There are quite a few reasons why your BAS might not line up perfectly with your Profit and Loss report. It's more common than you might think! Here are the top three culprits that usually cause the mismatch:

This is where numbers are either swapped (cool thing transpositions - they are generally multiples of 9 if the numbers swapped are next to each other), or you hit the wrong number when entering the info into the BAS. These are by pure accident and are the most common cause.

Transactions might be recorded in your accounting system at different times from when they’re reported on your BAS. This can occur when transactions are backdated or when the bank reconciliation is not complete before you lodge your BAS numbers.

A variance may occur when your BAS is reported on an Accrual Basis, but the report from Xero was pulled on a Cash Basis. It's easy to mix these up, and it can cause things not to match up as they should.

When it comes to accounting, you have two options for lodgment: Cash or Accrual.

Simply put, cash basis is all about when the money actually changes hands—when you get paid or when you pay a bill. Accrual basis, on the other hand, focuses on when the work is done or when bills are due, regardless of whether the money has come in or gone out yet.

Most small businesses stick with GST on a cash basis, and for good reason! It’s not only easier to track, but it’s also gentler on cash flow since you don’t have to pay GST until the money actually lands in your account.

If you ever need to make changes to a previously submitted BAS, don’t worry—it’s totally doable! You can amend your BAS through the ATO portal in MyGov or the Online Services for Business portal.

Once you’ve figured out the variance, the next step is to update your BAS by submitting an amendment. Here are the step to help you update your BAS and ensure everything is accurate and up to date: 👇

1. Log into your MyGov account.

2. Navigate to ATO online services.

3. Select Tax, then Activity Statements, then View or revise activity statements

4. Select the History tab and locate the activity statement you want to revise. (If a revision is possible, a Revise button will appear to the right of the activity statement.)

5. Select Revise.

6. Select Edit for each role you want to revise and enter the revised values.

7. Select Lodge.

1. Log in to the Online Services for Business: Start by logging into your account on the ATO Business Portal. If you don’t have an account, you’ll need to register first.

2. Select Lodgments then Activity statements.

3. Select Revise next to the processed activity statement from the History list.

4. Enter the revised values - If the Revise button doesn't display, you can't revise the activity statement through the service.

5. Select Lodge.

If this feels overwhelming or you’d prefer a hand with it, you can always book in with Balance Tax, and we’ll get it sorted for you. 💙

Matching your income between your BAS and Tax Return is an easy way to stay on track and avoid issues down the road. If you need any help, feel free to reach out; we’re here to assist! 💫