Carry-forward corrections¶

When you find a GST mistake on a past statement, you do not always have to reopen the old one. Often the ATO lets you fix an eligible error simply by including it on your next Activity Statement. This is called carrying the correction forward, and it is the easiest way to put a small, recent error right.

In one line

A carry-forward correction fixes an eligible GST error by including it on a later statement instead of revising the original — but only within the ATO's limits.

Why this matters¶

Revising an old statement is more work and reopens a period you had already finished with. Carrying a small, recent error forward onto your next statement is quicker and keeps you moving. Knowing when this is allowed saves you time and effort.

What you will learn¶

What a carry-forward correction is
Why carrying a correction forward is simpler than revising the original
When a carry-forward is allowed, and when it is not

Understanding the concept¶

A carry-forward correction means you fix a past GST error by including it in the figures on a later Activity Statement, rather than going back and revising the statement that had the error. The ATO explains that many GST mistakes can be corrected on your next statement this way.

Why it is simpler:

You do not reopen a period you had already closed off.
You fix the error as part of the statement you are working on anyway.
There is less paperwork than lodging a revision of an old statement.

But it is not allowed for every error. A carry-forward is only permitted when the error sits within the ATO's correction limits — a limit on how big the error is (the value limit) and a limit on how long ago it happened (the time limit). Both depend on your business's GST turnover. If an error is too big or too old to fit the limits, you cannot carry it forward — you revise the original statement for the period the error was made in instead.

The ATO also asks you to keep a note of when the error was made and which later statement you corrected it on, so your records explain what happened.

For accountants & bookkeepers

Carrying a correction forward means including the net correction in the labels on a later statement rather than lodging a revision. Debit errors can be carried forward only up to the debit error value limit and within the debit error time limit for the business's current GST turnover; where the net sum exceeds the value limit, correct up to the limit and revise the balance in the original period. Credit errors carry no value limit but must be within the period of review for the earlier period. Keep records showing the period the error was made and the later statement it was corrected on.

Example¶

Jordan runs a small online shop with modest turnover. While preparing this quarter's BAS, Jordan notices last quarter's GST was overstated by about $250 — the shop reported a bit too much GST. Because the amount is well within the limits for a business Jordan's size and last quarter is recent, Jordan can carry the correction forward: the $250 is built into this quarter's figures, and there is no need to revise the old statement. Jordan keeps a short note recording the quarter the error was made and the statement it was corrected on.

Compare that with a larger, older error. If Jordan had found a several-thousand-dollar shortfall from two years ago, it would be too big and too old to carry forward. In that case Jordan would revise the original statement for the period the error was made in, not carry it forward.

Common mistakes¶

Carrying an error forward without checking it fits the value and time limits.
Assuming a carry-forward is always available — big or old errors must be revised.
Not keeping a note of when the error was made and which statement fixed it.
Trying to carry forward part of a debit error that is above the value limit — the amount over the limit is revised in the original period, not carried forward.

How this works in myaccountant¶

In the app — when an eligible GST error fits the ATO's limits, myaccountant lets you carry the correction onto a later Activity Statement so you do not have to reopen the old one. When the error is outside the limits, myaccountant instead lets you revise the original statement for the period the error was made in.

Key points¶

A carry-forward fixes an eligible GST error on a later statement, not the original.
It is simpler because you do not reopen a closed period.
It is only allowed within the ATO's value and time limits.
The limits depend on your GST turnover.
An error that is too big or too old must be revised in its original period.
Keep a note of when the error was made and which statement corrected it.

Learn next¶

General information only — not tax, super or financial advice.

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