Business Activity Statement (BAS) is a tax reporting requirement for all business. The BAS is used to report and pay Goods and Services Tax (GST), PAYG Instalments, PAYG Withholding tax and other tax obligations.
How often must you lodge your BAS?
The BAS is required to be lodged either monthly or quarterly. If you are a monthly lodger the due dates are 28 days after the end of the month, for example, January BAS is due for payment and lodgement 28 February.
If you are a quarterly lodger the reporting dates are July-September, October-December, January-March and April-June. The due dates for these BAS are 28 October, 28 February (an extra month due to Christmas) and 28 April.
If you use the services of a BAS or Tax Agent then you will be entitled to an additional month’s time for lodgement for each BAS, apart from the December quarter/month when everyone is entitled to the additional month extension.
If you have turnover of less than $20 million you have the choice to either lodge monthly or quarterly. It is common practice, if you have the choice, to choose quarterly, this will mean less compliance costs from your accountant or bookkeeper as the number of BAS each year is 4 and not 12.
Who must register for BAS & GST?
You are required to register for the BAS and GST if your total business turnover is greater than $75,000 or $150,000 if you are a tax exempt / not for profit organisation or if you provide taxi travel regardless of your turnover.
How do you account for GST?
You can also choose to account for GST on cash or accrual basis. Cash is available to those businesses with a turnover of less than $2 million and means that you only pay GST when you receive income or pay expenses. Accrual means you pay GST when invoices are issued (by invoice date) or received (by invoice date). If you have trade debtors it is better to pay on cash method so you are not having to pay GST before you are paid.
How do you prepare your BAS?
In order to prepare your BAS timely and accurately you will need to be using an accounting software that reconciles all GST transactions, PAYG withholding from wages and other tax obligations.
What are the risks of being late with BAS?
It is also important to ensure that your lodgements are made on time otherwise you could be up for late lodgement penalties or general interest charge for overdue amounts. The current penalty for late lodgement is $170 per month and the General Interest Charge rate is 9.15%, so it is important to be on time!
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The information provided here is of a general nature for Australians and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary.