BAS and reporting
G11 non-capital purchases
G11 on the BAS is where you report the GST-inclusive cost of everyday business purchases and expenses that are not capital items, such as stock, rent, supplies and services.
G11 is the label on the BAS for non-capital purchases. It includes the day-to-day costs of running the business, including stock for resale, materials, rent, utilities, advertising, professional fees, subscriptions, insurance where GST applies, and repairs. Like G10, it is reported including GST. Together, G10 and G11 cover most of your purchases for the period.
The distinction between G10 and G11 helps the ATO to build a picture of how your business spends money. It does not change whether you can claim a GST credit. For both, you generally need a valid tax invoice for purchases over $82.50 including GST, the purchase must be for your business, and it must be a creditable acquisition. The credits from both labels flow to 1B.
Not everything in your expenses belongs at G11. Wages, super, bank fees without GST, and some government charges do not include GST and should be handled with the appropriate tax codes. Some items you pay may be GST-free, and some relate to input-taxed activity. Your software uses tax codes to separate these. Review your chart of accounts to make sure the default codes are correct.
If part of a purchase is private, you should report only the business portion at G11 and claim the credit on that part. Examples include a mobile phone used for both business and personal calls, or a home office portion of utilities. Keep a record of the method you use to apportion the cost, such as a usage diary or a reasonable percentage that you can justify.
A common mistake is to include non-purchases, such as loan repayments, owner drawings or tax payments, in the G11 figure. These are not purchases and have no GST. Another is to enter expenses without matching them to a tax invoice. Go through large items each quarter to make sure the document exists and is addressed to your business.
Keep records for five years and be ready to explain G11 against your profit and loss report. The numbers will not match exactly, because of non-GST items, but the difference should be explainable. This is general information only, so confirm your situation with the ATO or a registered tax professional.
Worked example
In a quarter, Sofia's bakery buys flour, packaging, utilities and advertising. Items with GST total $33,000 including GST, all with tax invoices, while other expenses of $12,000 such as wages have no GST. She reports $33,000 at G11, and the GST credit is $33,000 divided by 11, which is $3,000. That amount is included in her 1B figure.
Practical tips
- Keep wages, owner drawings, loan repayments and tax payments out of G11 since they carry no GST.
- Check large purchases each quarter to confirm a valid tax invoice is on file.
- Keep a written record of how you apportion mixed business and private costs.