Q1 BAS Prep: The Mistakes We See Every October

You’ve had three months since your last BAS. Plenty of time to stay on top of things, or so you’d think.
Except most of that time went on EOFY wrap-up. Then a break. Then everything else that isn’t bookkeeping.

By the time October rolls around, the habits that kept you organised in June have usually gone quiet.

We see this every year. The first BAS after EOFY catches more people out than any other. Not because it’s harder. Because nobody’s warmed up.

When it’s actually due

Your Q1 BAS, covering July to September, is due 28 October. Lodge and pay online, and you get an automatic two-week extension to 11 November. Lodge through a registered BAS agent, and you may get more time again, it’s worth asking.

If you miss it, the ATO applies a failure-to-lodge penalty that grows the longer it sits, plus interest on anything unpaid. The exact rate changes over time, so we won’t quote a figure. Check the current rate on ato.gov.au before you assume anything.

PAYG instalments trip people up more than anything else on the form. It’s not a bill for last quarter. It’s a prepayment toward your annual income tax, based on an ATO estimate. 

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Where it goes wrong

Three months of transactions is a lot to face at once. If reconciliation has been in the “too hard basket” since July, October is when that catches up with you. We’ve written before about why close enough reconciliations cost more than they save, and Q1 is exactly when that bill comes due.

Then there’s coding. Bank fees, wages, loan repayments, owner drawings. None of these should carry a GST code at all, they’re BAS-excluded, not GST-free. Mix that up and your GST figures are wrong, sometimes by a lot.
Your reporting method matters too. Cash or accrual, whichever one you use for GST needs to match what you’ve used all year. A setting quietly changed in Xero, and suddenly you’re double-counting or missing income without knowing why.

PAYG instalments trip people up more than anything else on the form. It’s not a bill for last quarter. It’s a prepayment toward your annual income tax, based on an ATO estimate. We’ve lost count of how many people pay it twice by accident, or ignore it entirely because they don’t understand what it’s for.

And the extension itself isn’t automatic. The two extra weeks only apply if you lodge and pay online, or through a registered agent. Assume it applies and you might be closer to the deadline than you think.

Different mistake, same root cause. A quarter’s worth of small slips, none of them caught until BAS week.

What actually being ready looks like

• Reconcile weekly, not once a quarter. Don’t let three months build up unreconciled.
• Run a GST report early, a week or two out, so anything odd has time to be fixed.
• Check your chart of accounts for anything coded to the wrong GST treatment, especially new categories added since June.
• Confirm your PAYG instalment amount still matches reality, and vary it if your income has genuinely shifted.
• Know your real deadline, 28 October if you’re lodging on paper, 11 November if you’re online or with an agent.

None of this is hard once it’s a habit. It’s just easy to let slip after a long EOFY stretch, and Q1 is where that slip shows up first.

The takeaway

If your BAS routine has drifted since July, this is the quarter to reset it, not the one to muddle through again. The first BAS is where good habits go quiet. Make it the one where they don’t.