1. The most common error with GST claims is incorrectly claiming GST credits on bank fees (e.g. monthly and annual fees, cheque book fees and loan establishment fees). Banks do not charge GST for these services. Note that GST is charged on credit card merchants fees and therefore a GST credit can be claimed on these.

2. Another common mistake is claiming GST credits on government charges like land tax, council rates, water rates, ASIC filing fees and motor vehicle registration where no GST has been charged. Sometimes, this is because the program you are using allocates GST to the transaction by default. You must look very carefully and make sure you adjust the GST component if this is the case.

3. A tricky one is business insurance policies. The stamp duty component of your business insurance will not have GST on it, so GST cannot be claimed on the whole payment. It must be adjusted so that the stamp duty component is GST free. If in doubt, check the invoice, or better yet, ask your accountant or bookkeeper.

4. This one is commonly overlooked, and it is usually not intentional. When a business sells an asset, and they are registered for GST, they must charge GST to the buyer, and must remit GST to the ATO. This includes trade in of motor vehicles as well. The sale of a business asset is subject to GST just like any ordinary business transaction unless the going concern exemption applies.

5. For those that receive government grants, there are GST on the payment. You must declare this as income, and remit the GST component to the ATO.

6. There are lots of GST free items or services that are purchased by businesses, that are sometimes overlooked and GST is claimed on it by mistake. Examples of this include - items purchased from overseas, basic food items, health services, and donations. Also ask for a tax invoice if you are not sure.

7. When a business purchases a car (which includes GST), they usually claim the full amount of the GST paid. Logically speaking, this makes sense. Unfortunately, there is a luxury car limit, so the purchaser can only claim the GST up to the luxury car threshold.  For the 2016 financial year, this is $63,184 , so the maximum GST you can claim is $5,744, even if you paid $10,000 in GST.

8. Claiming GST on the full transaction, when the transaction is partly private in nature. Eg. Telephone bills : say for example only 50%is deemed business usage - this means that is a bill is $100, you can only claim GST on $50 (being $4.55).


If you have discovered an error, do not panic. The error can be fixed and is easily rectified!