ATO Is Watching GST and Expense Claims: What Physio Clinics Should Check

The ATO has said it is taking stronger action on businesses that claim expenses and GST credits they are not entitled to.

That matters for physio clinics.

Most clinics have many small costs each month. Rent. Software. Towels. Clinic supplies. Ads. Repairs. Fuel. Equipment. It is easy for a wrong GST claim to slip into the BAS.

One small mistake may not feel like much. But repeated mistakes can add up fast.

Start with the BAS, not the bank balance

Your BAS should match your records.

Do not lodge just because the bank account looks right. Check the reports behind the numbers.

Look at:

• GST collected on sales
• GST credits claimed on costs
• wages and super reports
• supplier bills
• receipts
• bank feeds
• any manual journals

If something looks odd, stop and check it.

Check costs with no GST

Not every cost has GST on it.

For a clinic, this can include some bank fees, wages, super, loan payments, interest, and some insurance charges.

If your software treats every cost as GST, the BAS may be wrong.

This is a common problem when transactions are rushed or copied from old rules.

Watch mixed-use costs

Some costs may be part business and part private.

For example:

• a car used for both clinic and personal trips
• a phone used outside work
• a home office cost
• training mixed with personal travel

You may not be able to claim the full amount.

Keep notes. Make the split clear. Do not leave it to memory.

Keep proof for bigger clinic costs

Large clinic costs need good records.

That may include:

• treatment beds
• gym gear
• diagnostic tools
• computers
• fit-out work
• lease costs
• software subscriptions

Keep the tax invoice. Keep the payment record. If the item is large, also keep a note of what it is used for in the clinic.

This helps if the ATO asks questions later.

Do not claim from quotes or unpaid bills by mistake

A quote is not a tax invoice.

A draft bill is not always enough either.

Before you claim GST credits, check that you have a valid tax invoice and the cost belongs to the clinic.

This is simple. It is also easy to miss when the clinic is busy.

A quick BAS check for clinic owners

Before the next BAS is lodged, ask these questions:

• Are any private costs in the business file?
• Are any costs coded with GST when they should not be?
• Are large equipment costs supported by invoices?
• Do the payroll reports match the BAS labels?
• Do the bank feed and accounting file agree?

You do not need to check every line yourself. But you do need a process.

Why this matters now

The ATO has made its focus clear. It is looking at over-claimed expenses and GST credits.

For clinic owners, the best fix is boring but useful.

Keep clean records. Code costs properly. Review the BAS before it is lodged.

That is much cheaper than fixing a messy BAS after the ATO has already asked questions.

Sources: ATO, “Stronger action on over-claimed expenses and GST credits”.