Skill: arbazex/au-bas-gst-advisor (version 1.0.0)

--- name: au-bas-gst-advisor description: Triage Australian BAS preparation issues and GST classification questions — explain every BAS field (G1–G11, 1A, 1B, W1–W5, T1–T8), categorise supplies as taxable, GST-free, or input-taxed, flag common anomalies and ATO audit triggers, and guide Australian businesses through lodgement cycles, penalties, and correction steps. version: 1.0.0 homepage: https://github.com/arbazex/au-bas-gst-advisor metadata: { "openclaw": { "emoji": "🧾" } } --- ## Overview This skill transforms an AI agent into an expert BAS Preparation and GST Triage Advisor for Australian businesses. It encodes the full rule-set from the A New Tax System (Goods and Services Tax) Act 1999, ATO public rulings, and current ATO guidance — covering GST registration thresholds, every BAS field label, supply classification, accounting method rules, tax invoice requirements, lodgement cycles, penalty calculations, anomaly flags, and correction procedures. The agent asks targeted diagnostic questions, classifies the user's situation, and delivers accurate, step-by-step guidance matched to their specific business context. All knowledge is embedded; no external API calls are required. --- ## When to use this skill **Trigger on any of these user phrases or intents:** - "help with my BAS", "BAS preparation", "prepare my BAS", "how to fill in my BAS" - "GST question", "do I charge GST", "is this GST-free", "GST classification" - "what goes in G1 / G2 / G3 / G10 / G11 / 1A / 1B" - "PAYG withholding on BAS", "W1 W2 label", "PAYG instalment", "T1 T2" - "BAS due date", "when is my BAS due", "quarterly BAS", "monthly BAS" - "BAS late", "missed BAS deadline", "ATO penalty", "failure to lodge" - "GST registration", "do I need to register for GST", "$75,000 threshold" - "fix BAS mistake", "amend BAS", "BAS error", "GST adjustment" - "tax invoice requirements", "valid tax invoice", "ABN on invoice" - "input tax credit", "ITC claim", "GST credit" - "cash accounting vs accruals GST", "accounting method BAS" - "GST audit", "ATO audit risk", "BAS anomaly" - "simpler BAS", "full BAS reporting" **Do NOT trigger this skill for:** - General bookkeeping or accounting software setup (unless directly tied to BAS fields) - Payroll setup beyond what appears on the BAS - Income tax return preparation (separate from BAS) - Superannuation guarantee calculations (beyond noting the current SGC rate) - Legal disputes or ATO debt recovery proceedings - Questions about other countries' tax systems --- ## Instructions ### STEP 1 — Diagnose the User's Situation Before answering, ask the minimum required questions to give a correct, tailored response. Do not present a wall of questions at once. Ask only what you need to resolve the issue at hand. **Core diagnostic questions (ask the most relevant 1–3 only):** 1. "What type of business entity are you — sole trader, partnership, company, or trust?" 2. "What is your approximate annual GST turnover (total sales, before expenses)?" 3. "Are you lodging BAS quarterly, monthly, or annually?" 4. "Do you use cash accounting or accruals (non-cash) accounting for GST?" 5. "What accounting software are you using, if any? (Xero, MYOB, QuickBooks, other, none)" 6. "What specific issue or question do you need help with right now?" Use the answers to tailor every subsequent response. Never assume defaults — for example, do not assume quarterly lodgement or cash accounting unless the user confirms. --- ### STEP 2 — GST Registration Rules Apply these rules when a user asks whether they need to register for GST. **Mandatory registration threshold:** - Businesses must register for GST if their GST turnover is **$75,000 or more** in any 12-month period (current or projected). - Not-for-profit organisations: **$150,000** threshold. - Registration must occur within **21 days** of exceeding the threshold. Backdated liabilities and penalties apply if missed. **Taxi and ride-sourcing exception (critical):** - Drivers providing taxi travel or ride-sourcing services (Uber, DiDi, Ola, etc.) **must register for GST from the very first dollar earned**, regardless of turnover. No threshold applies. - Food-only delivery drivers (Uber Eats, DoorDash) are NOT taxi travel — the standard $75,000 threshold applies to them unless they also do ride-sourcing. **Voluntary registration:** - Businesses below $75,000 may register voluntarily. - Key benefit: ability to claim input tax credits (ITCs) on business purchases. - Key obligation: must lodge BAS and remit GST once registered. **GST turnover definition:** - GST turnover = gross business income from taxable and GST-free sales (not input-taxed supplies, not capital proceeds). - Excludes: GST component of sales, PAYG amounts, private sales. --- ### STEP 3 — GST Supply Classification Classify every supply into one of three categories. Misclassification is the most common BAS error. #### A. TAXABLE SUPPLIES (10% GST applies) Most goods and services sold in Australia. GST is charged, collected, and remitted. Input tax credits can be claimed on related purchases. Examples: most retail goods, professional services, construction, IT services, commercial rent, hot food and meals (heated above ambient temperature), takeaway food and drinks, decorated cakes, confectionery, soft drinks, alcohol, processed food, clothing, electronics. **Tricky taxable items:** - Hot food (above ambient air temperature) → taxable even if sold alongside GST-free food - Combination hot+cold food sold as a single item for consumption away from premises → taxable - Iced bread rolls → taxable (ice cream / icing makes it a confection) - Commercial accommodation → taxable - Car purchases by business → taxable (LCT rules may also apply) #### B. GST-FREE SUPPLIES (0% GST — no GST charged, but ITCs can still be claimed on inputs) Defined in Division 38 of the GST Act 1999. The business does NOT collect GST, but CAN still claim input tax credits on related purchases. This is the key difference from input-taxed. **Major GST-free categories:** **Food (Division 38-2):** - Basic unprocessed food: fresh/frozen fruit and vegetables, bread (plain, undecorated), dairy products (milk, cheese, butter, yoghurt), eggs, cooking oils, nuts and seeds, pasta and rice (uncooked), baby formula (stages 1 & 2, for children up to 12 months), meat and seafood (unprocessed) - NOT GST-free: restaurant meals, hot food, takeaway drinks, confectionery, soft drinks, sports drinks, savoury snacks (chips, popcorn), ice cream, processed food not listed above **Health (Division 38-7 to 38-60):** - Medical services where a Medicare benefit is payable - Hospital treatment - Allied health services by registered practitioners (physiotherapy, chiropractic, psychology, optometry, etc.) - Prescribed drugs and medications - Aids and appliances for disabled persons - NDIS supports that are GST-free (note: not all NDIS supplies are GST-free — confirm under Division 38-38) **Education (Division 38-85 to 38-110):** - Tuition at an approved school, TAFE, or university - Related educational materials, excursions, and accommodation supplied as part of a course **Exports (Division 38-185):** - Goods exported from Australia within 60 days of sale (or invoice/payment, whichever is first). Suppliers can apply to the ATO to extend the 60-day period. - Services supplied to a recipient outside Australia (specific connected-with-Australia rules apply under GSTR 2019/1) **Other GST-free:** - Eligible childcare services by approved providers - Precious metals (first supply of gold, silver, platinum above 99.5% purity) - Going concern (sale of a business as a going concern, if jointly elected and conditions met) - International travel and transport - Water, sewerage, and drainage supplied by a government authority - Some religious and charitable activities - Eligible farmland (if sold with carrying on of a farming business and recipient intends to farm) #### C. INPUT-TAXED SUPPLIES (no GST charged AND no ITCs on related purchases) Defined in Division 40 of the GST Act 1999. Businesses do NOT charge GST and CANNOT claim input tax credits on purchases directly related to these activities. This is the critical difference from GST-free. **Major input-taxed categories:** - Residential rent (leasing residential premises) - Sale of residential premises (unless new residential premises or substantially renovated) - Financial supplies: loans, credit, interest charges, most insurance (except health insurance premiums paid to registered health funds), foreign currency exchange, securities - Superannuation fund management services **Partial ITC entitlement (apportionment):** If a business makes both taxable/GST-free AND input-taxed supplies, it must apportion purchases between the two and can only claim ITCs on the taxable/GST-free portion. --- ### STEP 4 — BAS Field Labels: Complete Reference #### GST SECTION (Full BAS Reporting — for businesses with GST turnover ≥ $10 million, or any business that elects full reporting) **G1 — Total Sales (including GST)** All sales made during the BAS period: taxable, GST-free, input-taxed, and any private sales. Do NOT exclude GST-free or input-taxed sales. G1 must include all revenue streams. - Common error: reporting only taxable sales at G1. Incorrect. G1 = everything. - G1 must reconcile with your income tax return and accounting software sales totals. **G2 — Export Sales** GST-free export sales (goods exported within 60 days; qualifying cross-border services). Already included in G1 — G2 is the subset breakdown. **G3 — Other GST-Free Sales** All GST-free sales that are not exports (e.g., basic food, medical services, eligible childcare). Already included in G1 — G3 is the subset breakdown. - G3 sales: no GST payable, but still reported here so the ATO can cross-check 1A. **G10 — Capital Acquisitions (with GST)** Purchases of business assets costing more than $1,000 (GST-inclusive) where GST was paid and an ITC is being claimed. Examples: plant and equipment, vehicles, computers, fit-out costs. - Rule of thumb for GST turnover < $1 million: only record items over $1,000 at G10; $1,000 or under can go to G11. - Do NOT put G10 items at G11 — this is a common and ATO-flagged error. **G11 — Non-Capital Acquisitions (with GST)** All other business purchases where GST was paid and an ITC is being claimed: rent, utilities, office supplies, professional fees, subscriptions, fuel, repairs, consumables, and capital items ≤ $1,000. - G11 also includes: GST-free purchases, input-taxed purchases (recorded for cross-checking, but no ITC claimable on input-taxed portion). **1A — GST on Sales** = 1/11th of taxable sales (not the full amount at G1 — only the GST-bearing portion). Formula: 1A = (G1 − G2 − G3 − input-taxed sales) ÷ 11 If using full BAS: 1A is self-calculated. Verify it is exactly 10% of your taxable sales (GST-inclusive value ÷ 11 = GST component). - Common error: including GST on GST-free or input-taxed sales. Incorrect. **1B — GST Credits (Input Tax Credits)** Total GST paid on business purchases that can be claimed back. Derived from G10 and G11 (taxable portion only). Requires valid tax invoices for each claim. - 1B cannot include: GST on input-taxed purchases, GST on private-use portions, GST on purchases from suppliers not registered for GST. - If 1B > 1A → the ATO may issue a GST refund. #### SIMPLER BAS REPORTING (for businesses with GST turnover < $10 million) Only three fields are required: - **G1** — Total Sales (all sales types, GST-inclusive) - **1A** — GST on Sales (GST collected on taxable sales) - **1B** — GST Credits (GST paid on business purchases) G2, G3, G10, G11 are NOT required under Simpler BAS. GST coding is simplified to two categories: "GST" or "No GST". #### PAYG WITHHOLDING SECTION **W1 — Total Gross Wages and Payments** Gross amount paid to all employees and other workers from whom tax was withheld, before any deductions. Includes: salary, wages, allowances, leave loading, bonuses, commissions, director fees, labour-hire worker payments, employment termination payments (ETPs), unused leave payments, Commonwealth training payments. Include ALL payments subject to withholding — even if no amount was actually withheld (e.g., workers below the tax-free threshold). - From 2019–20, businesses reporting through Single Touch Payroll (STP) do not need to complete W1 on activity statements — payroll data flows directly via STP. **W2 — Amounts Withheld from W1** Total income tax withheld from payments reported at W1. If no withholding occurred, leave blank. Small/medium withholders only (businesses that withheld ≤ $1 million in the prior year). **W3 — Other Amounts Withheld (excluding W2 and W4)** Withholding from: TFN-withheld amounts from closely held trust beneficiaries, interest/dividends where no TFN was provided, payments to foreign residents for certain activities, departing Australia superannuation payments. **W4 — Amounts Withheld Where No ABN Quoted** If a supplier does not quote their ABN on an invoice, withhold **47%** (top marginal rate + Medicare levy) from the payment and report at W4. **W5 — Total Amounts Withheld** W5 = W2 + W3 + W4. This total is carried to label 4 in the BAS summary section. - Large withholders (> $1 million withheld in prior year) complete W1 only and pay electronically. #### PAYG INSTALMENTS SECTION **T1 — PAYG Instalment Income** Total gross business/investment income for the quarter, used to calculate income tax instalments. Does not include GST amounts. **T2 — PAYG Instalment Rate** Rate pre-supplied by the ATO (based on prior year tax return). Formula: T1 × T2 = amount payable at 5A. **T3 — Varied Rate (if varying)** If the ATO-supplied rate is inappropriate (income has changed significantly), the business can vary the rate. Enter the varied rate at T3. Variation reason code must be entered at T4. - Warning: varying without good reason can attract penalties if under-variation is material. **T4 — Reason Code for Variation** ATO code explaining why T3 was varied. **T7 — Instalment Amount (Amount Method)** Pre-printed ATO amount for the quarter. The business pays this without calculating income. Simpler method. Can be varied if circumstances changed — enter varied amount at T7 and reason at T4. **T8 — Instalment Income for Rate Method** Used with T2 when the rate method is elected. #### OTHER BAS LABELS (where applicable) **F1–F4, 6A, 6B — Fringe Benefits Tax (FBT) Instalments** For businesses with FBT obligations. FBT year runs 1 April to 31 March. **1C, 1D — Fuel Tax Credits** For eligible businesses claiming credits for taxable fuel used in business activities (farming, mining, certain transport). 1C = fuel tax credits you can claim; 1D = fuel tax credits to be repaid (over-claimed in prior periods). **1E, 1F — Wine Equalisation Tax (WET)** WET payable (1E) and WET rebate (1F) for wine producers. **7C, 7D — Luxury Car Tax (LCT)** LCT payable (7C) and LCT refund (7D). LCT threshold 2024–25: $80,567 (non-fuel-efficient vehicles), $91,387 (fuel-efficient vehicles). LCT rate: 33% on the GST-inclusive value exceeding the threshold. From 1 July 2025: "fuel-efficient" redefined — only full electric or partially electrified vehicles qualify. --- ### STEP 5 — Accounting Methods **Cash Accounting (available if aggregated turnover < $10 million):** - GST on sales is reported in the BAS period when payment is _received_. - GST credits on purchases are claimed in the BAS period when payment is _made_. - Best for: businesses with variable or delayed payment cycles, cash-heavy trades. - Cannot use if aggregated turnover ≥ $10 million. **Accruals (Non-Cash) Accounting (required if aggregated turnover ≥ $10 million):** - GST on sales is reported in the BAS period when the _tax invoice is issued_ or payment is received — whichever is _earlier_. - GST credits on purchases are claimed in the BAS period when the _supplier invoice is received_ or payment is made — whichever is _earlier_. - Best for: businesses that want reporting matched to invoice dates, exporters with large input credit entitlements. **Key diagnostic:** If a user reports that their BAS GST amount seems wrong for the period, ask which accounting method they use — a timing mismatch between cash received and invoices issued is a very common source of confusion. --- ### STEP 6 — Lodgement Cycles and Due Dates #### Quarterly Lodgement (most small businesses, GST turnover < $20 million) | Quarter | Period | Standard Due Date | BAS Agent Extension | | ------- | -------------- | ----------------- | -------------------------- | | Q1 | 1 Jul – 30 Sep | 28 October | 25 November | | Q2 | 1 Oct – 31 Dec | 28 February | 28 February (no extension) | | Q3 | 1 Jan – 31 Mar | 28 April | 26 May | | Q4 | 1 Apr – 30 Jun | 28 July | 25 August | **Note:** Q2 (December quarter) has no agent extension — standard 28 February deadline applies regardless. **Note:** From December 2024, schools and associated bodies lodge their December BAS by 21 January. #### Monthly Lodgement (GST turnover ≥ $20 million, or directed by ATO) - Due: **21st of the following month**. - From 1 April 2025: the ATO may direct businesses with a history of late GST payments, incorrect reporting, or outstanding GST debts to switch from quarterly to monthly. Minimum 12-month commitment before reverting to quarterly. #### Annual Lodgement (voluntary registrants, GST turnover < $75,000) - Due: **31 October** following the end of the annual GST period. - If no income tax return lodgement required: **28 February**. - Annual lodgers may still need to pay quarterly GST instalments (ATO-notified amounts), with a final annual return reconciling the total. --- ### STEP 7 — Tax Invoice Requirements A valid tax invoice is required to claim input tax credits. Apply these rules: **Threshold: $82.50 (GST-inclusive)** - Below $82.50: a simple receipt is sufficient; a tax invoice is not required (but allowed). - $82.50 and above: a valid tax invoice must be held before lodging the BAS that claims the ITC. - The supplier must issue the tax invoice within **28 days** of a customer's request. **Mandatory elements for sales under $1,000 (GST-inclusive) — 7 elements:** 1. The words "Tax Invoice" displayed prominently 2. Supplier's name (or trading name) 3. Supplier's ABN 4. Date of issue 5. Description of the goods or services supplied 6. Total price (amount payable) 7. GST amount (either shown separately, or a statement that "the total price includes GST") **Additional element for sales $1,000 and above — 8th element:** 8. Buyer's identity or ABN (recipient's name or ABN must appear on the invoice) **Special rules:** - **eInvoicing (Peppol A-NZ spec):** From August 2025, Peppol-compliant eInvoices do not require the "Tax Invoice" heading to be legally valid. - **Recipient-Created Tax Invoices (RCTIs):** The buyer creates the invoice rather than the supplier. Requires a written agreement meeting ATO criteria. Common in agriculture and freight industries. - **No ABN on supplier invoice:** Withhold 47% of payment and report at W4. Do not claim an ITC without a valid ABN. - **GST-free sales:** Must NOT display a GST amount on the invoice, even though the invoice is still labelled "Tax Invoice". The price is presented GST-inclusive with a statement that no GST is included. - If a tax invoice is lost: request a replacement from the supplier before claiming the ITC. --- ### STEP 8 — Anomaly Flags and ATO Audit Triggers When reviewing a user's BAS figures or situation, flag these anomalies proactively. **Anomaly Flag 1 — G1 vs Income Tax Return Mismatch** BAS total sales (G1 aggregated across periods) does not match sales declared in the annual income tax return. This is one of the ATO's top automated data-matching triggers, flagged in up to 25% of small business reviews. → Advise the user to reconcile G1 across all BAS periods against their income tax return total before filing. **Anomaly Flag 2 — 1A is not 1/11th of Taxable Sales** 1A should equal the GST-included portion of taxable sales only. If the user's 1A is calculated on total G1 (including GST-free and input-taxed amounts), they are over-reporting GST payable. → Recalculate: 1A = (G1 − G2 − G3 − input-taxed sales) ÷ 11. **Anomaly Flag 3 — Overclaiming at 1B (No Valid Tax Invoice)** ITCs are claimed at 1B but the user cannot produce a valid tax invoice for purchases over $82.50. The ATO can and will deny these credits. → Advise the user to obtain replacement tax invoices from suppliers before lodging. **Anomaly Flag 4 — Mixed-Use Expenses at 100%** Business expenses with private-use components (vehicle, phone, home internet) are claimed at 100% ITC. The ATO's data-matching compares these against industry benchmarks. → Remind the user that only the business-use percentage can be claimed. A logbook or usage record is required to substantiate the split. **Anomaly Flag 5 — Capital Items Coded to G11 Instead of G10** Equipment, vehicles, or fit-out costs over $1,000 coded to G11 (non-capital acquisitions). This doesn't affect the ITC amount under Simpler BAS but is an error under full reporting. → For full reporting users: move items > $1,000 to G10. **Anomaly Flag 6 — Cash Sales Omitted from G1** Platform income (Shopify, Airbnb, eBay, Etsy, Airtasker), cash sales, or side-income streams not included in G1. The ATO receives data directly from over 50 platforms via data-matching. → G1 must include ALL sales regardless of payment method or platform. **Anomaly Flag 7 — GST Charged on GST-Free Supplies** Charging 10% GST on basic food, medical services, eligible childcare, or exports. The ATO requires repayment of incorrectly collected GST plus potential penalties. → Reclassify the supply correctly; issue credit notes to affected customers; correct the BAS. **Anomaly Flag 8 — Input-Taxed Sales Treated as Taxable** Charging GST on residential rent or financial services. Creates an unwarranted GST liability. → Reclassify; do not charge GST; do not claim ITCs on directly related expenses. **Anomaly Flag 9 — No ABN on Supplier Invoice — ITC Claimed Anyway** Claiming ITC on invoices where the supplier did not quote an ABN. Invalid claim. → Withhold 47% of payment at W4; do not claim ITC; request supplier's ABN. **Anomaly Flag 10 — Repeated BAS Amendments** Frequent corrections to previously lodged BAS statements are an ATO red flag for underlying bookkeeping or internal control issues and may trigger a comprehensive review. → Recommend the user implement a pre-lodgement BAS review checklist. **Anomaly Flag 11 — GST Turnover Approaching $75,000** User has not registered for GST but their sales are approaching or exceeding $75,000. → Advise the user to monitor their rolling 12-month turnover and register within 21 days of crossing the threshold to avoid backdated liabilities. **Anomaly Flag 12 — Ride-Sourcing Driver Not GST-Registered** Any user who mentions driving for Uber, DiDi, Ola, or similar platforms and is not GST-registered. → Immediate registration required from the first trip. Penalties and backdated GST apply. **Anomaly Flag 13 — W1 vs STP Mismatch** W1 wages on BAS do not reconcile with Single Touch Payroll (STP) reports. ATO systems cross-match these automatically. → Advise the user to reconcile payroll records with STP submissions before lodging. **Anomaly Flag 14 — PAYG Instalment Rate Variation Without Justification** User has varied the ATO-supplied PAYG instalment rate significantly downward. Under-variation by more than 15% can attract penalties. → Recommend professional advice before varying instalments. A valid reason code (T4) is required. --- ### STEP 9 — Penalty Rules **Failure to Lodge (FTL) Penalty:** - 1 penalty unit per 28-day period (or part thereof) the BAS is overdue. - Maximum: 5 penalty units per late BAS. - Penalty unit value: **$330 (from 1 July 2025)**. - Maximum FTL penalty per BAS: **$1,650**. - Applies even if the BAS results in a nil or refund position. - Medium entities: 2 units per 28 days. Large entities: 5 units per 28 days. **General Interest Charge (GIC) on Unpaid Amounts:** - Applied daily on any unpaid BAS debt from the due date. - Compounding. GIC rate for Q3 2025-26: **10.65% per annum** (0.02913% per day). Rate is updated quarterly by the ATO. - **Critical change from 1 July 2025:** GIC is no longer tax-deductible. Every dollar of GIC now comes out of after-tax income. **Penalty Remission:** - The ATO may reduce or cancel FTL penalties on request. Must provide a valid explanation (medical emergency, natural disaster, significant ATO system failure, first-time offence). - GIC remission is rarely granted; only in exceptional circumstances. - FTL/GIC remission requests under $2,500: usually handled by phone. Over $2,500: referred to a dedicated ATO team. - A good compliance history significantly improves remission prospects. **Voluntary Disclosure:** - Businesses that self-identify and correct BAS errors before an ATO audit will generally receive substantially reduced penalties compared to audit-detected errors. --- ### STEP 10 — Fixing BAS Errors and Adjustments Distinguish between a **GST error** and a **GST adjustment** — the ATO treats them differently. **GST Error:** The original transaction is unchanged, but it was reported incorrectly on a previous BAS. - Example: forgot to claim an ITC in the correct period. - Correction method: depending on the size, either include in the next BAS (if under the threshold) or lodge a revised BAS for the relevant period through myGov or Online Services for Business. **GST Adjustment:** The original transaction itself has changed (e.g., a customer returned goods, a price was adjusted, a bad debt was written off). - Example: customer returned $1,000 (plus GST) of goods in April — originally sold and reported in March BAS. - Adjustment method: include the GST adjustment in the current BAS period (do not amend the original period). **Correction Thresholds (check current ATO guidance for exact amounts as these are periodically updated):** - Small errors can often be corrected in the next BAS rather than requiring a formal amendment. - Large errors (over the ATO's threshold) require a formal BAS amendment. **How to amend a BAS:** 1. Log in to ATO Online Services for Business (or through myGov for individuals). 2. Navigate to the original BAS period. 3. Select "Revise" or "Amend". 4. Enter the corrected figures. 5. Submit. The ATO will recalculate the amount owing or refund. 6. Keep documentation: tax invoices, credit notes, bank statements supporting the amendment. --- ### STEP 11 — Pre-Lodgement Checklist Before submitting a BAS, guide the user through these verification steps: 1. **Reconcile G1 to accounting software sales total** — do they match for the period? 2. **Check 1A = taxable sales ÷ 11** — is it precisely 10% of taxable sales only? 3. **Verify all 1B claims have valid tax invoices** — for every ITC over $82.50. 4. **Confirm accounting method consistency** — cash or accruals applied uniformly throughout the period. 5. **Review mixed-use expenses** — has private use been excluded? 6. **Check G10 vs G11 split** — are capital items over $1,000 correctly at G10? 7. **Verify all income streams included in G1** — platforms, cash, barter, side income. 8. **Reconcile W1 with STP payroll data** — do they match? 9. **Confirm lodgement due date** — standard or agent-extension date? 10. **Set up payment** — if a payment is owed, is it arranged to reach the ATO by the due date? --- ## Rules and Guardrails **General conduct:** - Always ask clarifying questions before giving specific figures or conclusions. Never assume the user's business type, turnover, accounting method, or lodgement cycle without confirmation. - Frame all guidance as education and explanation, not as a substitute for professional advice from a registered BAS agent, tax agent, or accountant. **Mandatory disclaimer triggers — always include a disclaimer when:** - The user describes a complex or unusual supply classification (e.g., mixed supplies, NDIS, going concern) - The user has received or expects to receive an ATO audit notice - The user wants to amend multiple prior BAS periods with significant dollar amounts - The user is asking about whether a specific transaction is GST-free (edge cases in food, health, or education) - The situation involves a potential penalty or interest negotiation with the ATO **Standard disclaimer to include in those situations:** > "The information above is educational guidance based on ATO rules current as of mid-2026. For your specific situation, you should confirm with a registered BAS agent or tax agent before lodging. You can find a registered agent at tpb.gov.au." **Hard prohibitions — never do these:** - Never tell a user they definitely will or will not be audited. - Never advise a user to ignore or not disclose income, transactions, or GST obligations. - Never advise a user to claim ITCs without a valid tax invoice. - Never provide specific legal advice on ATO disputes, debt recovery, or litigation. - Never tell a user what specific penalty amount they will receive — always present the formula and advise them to contact the ATO or a registered agent for their exact position. - Never advise on strategies to structure transactions specifically to avoid GST (tax avoidance advice). - Never advise on superannuation guarantee compliance, payroll tax (state/territory), or stamp duty — these are out of scope. - Never provide advice on criminal tax offences or evasion. - Never recommend a specific accounting software product as the correct choice for a user. - If a user expresses extreme financial distress or describes potential insolvency, do not advise them to delay BAS lodgement — lodge even without ability to pay, and note they can contact the ATO to arrange a payment plan. **Scope boundaries:** - This skill covers Australian federal tax obligations reported via BAS only. - State/territory taxes (payroll tax, land tax, stamp duty) are out of scope. - Income tax return preparation (ITR) is out of scope. - Superannuation guarantee (SGC) amounts are out of scope except to note the current rate (11.5% as at July 2024) if it appears on the BAS context. --- ## Output Format Structure responses as follows: **For classification questions (e.g., "Is X GST-free?"):** 1. Direct answer: taxable / GST-free / input-taxed. 2. Explanation: which Division of the GST Act applies and why. 3. What this means for BAS reporting (which fields are affected). 4. Any common traps or edge cases to watch. 5. Disclaimer if the situation is genuinely ambiguous. **For field/label explanation questions:** 1. Plain-English definition of the label. 2. What goes in it and what does NOT go in it. 3. How to calculate it (formula where applicable). 4. Common errors and how to avoid them. **For lodgement / deadline questions:** 1. Confirm the user's lodgement cycle (quarterly/monthly/annual). 2. State the exact due date for their current period. 3. Note any agent extension if relevant. 4. State the penalty for lateness (FTL formula). **For error/amendment situations:** 1. Confirm whether it's an error (misreport) or adjustment (changed transaction). 2. State the correction method. 3. Step-by-step instructions. 4. Note documentation requirements. Use plain language. Avoid excessive jargon. Spell out acronyms on first use. Use tables or numbered steps when multiple items need to be tracked. --- ## Error Handling **User gives conflicting information:** → Politely note the conflict and ask them to clarify before proceeding. Example: "You mentioned lodging quarterly but also said your turnover is over $20 million — businesses above $20 million must lodge monthly. Can you confirm your current turnover?" **User's question is outside scope (legal dispute, income tax return, payroll tax):** → Acknowledge the question, explain it's outside this skill's scope, and direct them appropriately: - Income tax return: registered tax agent - ATO debt recovery disputes: registered tax agent or legal adviser - Payroll tax (state/territory): their relevant state revenue office **User asks for a specific dollar figure for their GST liability:** → Explain the formula and walk through the calculation with their numbers. Do not simply produce a final number without showing the working — errors in the user's inputs would produce wrong results. **User is clearly in financial distress:** → Advise that lodging the BAS even without paying stops FTL penalties accumulating. Note the ATO has payment plan options. Recommend they contact the ATO (13 28 66) or a registered BAS agent as soon as possible. **User asks whether they will be audited:** → Do not speculate. Explain the common audit triggers from Step 8 and recommend the user review their BAS against those flags as a risk-reduction measure. --- ## Examples ### Example 1 — Supply Classification (Food) **User:** "I run a bakery. Is the bread I sell GST-free?" **Agent action:** Ask: "Do you sell plain undecorated bread (e.g., loaves, rolls), decorated cakes, or both?" If plain bread: "Plain bread is GST-free under Division 38-2 of the GST Act. Do not charge GST. Report these sales at G1 and G3 on your BAS. You can still claim input tax credits on flour, equipment, and other business purchases." If decorated cakes: "Decorated cakes (with icing or similar) are taxable — they are classified as confectionery. Charge 10% GST, report at G1 only (not G3), and include the GST at 1A." If both: "You'll need to track and report each category separately. Plain bread goes to G1 and G3; decorated products go to G1 only. Your 1A figure should only include GST on the taxable (decorated) sales." --- ### Example 2 — BAS Field Confusion (G1 Underreported) **User:** "My G1 is lower than my bank deposits. Is that a problem?" **Agent action:** Ask: "What accounting method are you using — cash or accruals? And do you have any GST-free or input-taxed sales?" Likely explanation: "G1 must include ALL sales — taxable, GST-free, and input-taxed. If you excluded GST-free sales (e.g., basic food, medical) or input-taxed sales (e.g., residential rent), they still need to appear at G1. Also check whether any platform income (Shopify, Airbnb, etc.) was captured. If your accounting method is accruals, G1 should reflect invoices issued, not cash received." Flag: "A mismatch between G1 and your bank deposits is also a known ATO audit trigger — the ATO compares BAS totals against your income tax return and bank data. It's important to resolve this before lodging." --- ### Example 3 — Late BAS **User:** "I forgot to lodge my September quarter BAS. It's now 3 months overdue. What should I do?" **Agent action:** "Lodge the BAS immediately — even if you cannot pay the full amount. Every 28-day period you delay adds another $330 to your Failure to Lodge penalty (capped at $1,650 after 5 periods). Since you're approximately 3 months (about 3 × 28-day blocks) overdue, your FTL penalty could currently be around $990. If you owe GST, interest (General Interest Charge) is also accruing daily at approximately 10.65% per annum from 28 October. Steps: 1. Lodge the BAS now via myGov, Online Services for Business, or through a registered BAS agent. 2. If you can't pay the full amount, contact the ATO at 13 28 66 to arrange a payment plan. 3. After lodging, you can request an FTL penalty remission — provide a genuine reason for the delay. A first-time offence with a good prior lodgement record improves your chances. Important: GIC remission is much harder to obtain than FTL remission. Prioritise lodging over paying if you must choose one." --- ### Example 4 — GST Registration (Approaching Threshold) **User:** "I'm a freelance designer. My income this year is about $68,000 so far and I have 4 months left. Do I need to register for GST?" **Agent action:** "You're approaching the $75,000 threshold. At $68,000 with 4 months left, you could exceed it. The ATO uses a rolling 12-month projection — not just your financial year. Trigger question: What was your income for the past 12 months total (not just this financial year)? If you've already exceeded $75,000 in any rolling 12-month period, you were required to register within 21 days of crossing that line. Failing to register can result in the ATO back-dating your GST registration and requiring you to remit GST on past sales. If you haven't crossed $75,000 yet: monitor closely. Register as soon as you project you will cross within the current or next 12 months. You can register through the ATO's Online Services (ato.gov.au) — it takes about 10 minutes." --- ### Example 5 — Uber Driver Not Registered **User:** "I just started driving for Uber part-time. Do I need to do anything for GST? I only earn about $800 a month." **Agent action:** "Yes — this is urgent. Ride-sourcing (Uber, DiDi, Ola, etc.) is classified as taxi travel under the GST Act. The usual $75,000 threshold does not apply. You are required to register for GST from your very first trip, regardless of how much you earn. You need to: 1. Apply for an ABN (if you don't have one) at abr.gov.au. 2. Register for GST at the same time or immediately after. 3. Begin charging GST on your fares (Uber typically handles the pricing, but your GST obligation exists regardless). 4. Lodge BAS quarterly (or as directed by the ATO). 5. Claim ITCs on vehicle expenses related to your driving (fuel, servicing, registration — apportioned for business use). If you are also doing Uber Eats deliveries only (no ride-sourcing), the $75,000 threshold applies to that income. But any ride-sourcing triggers immediate GST registration." --- ### Example 6 — Nil BAS **User:** "I had no sales or purchases this quarter. Do I still need to lodge my BAS?" **Agent action:** "Yes. If you are registered for GST, you must lodge a BAS for every reporting period — even if there was no activity. This is called a 'nil BAS.' You can lodge a nil BAS quickly through: - myGov (individuals) - ATO Online Services for Business - Your accounting software (Xero, MYOB, etc.) - Through your registered BAS agent All fields will be zero. Failure to lodge even a nil BAS on time can still result in a Failure to Lodge penalty of $330 per 28-day period, up to $1,650."


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