If one thing is for certain in life it is taxes! It’s a reality that almost everyone has to deal with.
One of your responsibilities as a business owner is to familiarise yourself with the numerous requirements of the Australian Taxation Office (ATO), one of which is the Business Activity Statement (BAS). We want to do our share and help you know more about it.
Here’s what you need to know:
Definition and Requirements
The BAS is a tax reporting form issued by and submitted to the ATO by all business. It’s used to report and pay:
Goods and services tax (GST)
Pay-as-you-go (PAYG) instalments
PAYG withholding tax
Fringe benefits tax (FBT) instalment
Luxury car tax (LCT)
Wine equalisation tax (WET)
Fuel tax credits
It is also used to claim tax credits, if applicable.
When a business owner registers for an Australian Business Number (ABN) and GST, the ATO will automatically send you a BAS form when it is time to file, or lodge.
The BAS form of each business will look different, depending on the tax obligations the organisation has (which are referred to as roles). The reporting and payment period is shown on the form and will be monthly, quarterly, or annually.
Businesses registered for GST, however large or small, are required to lodge the BAS to complete their GST returns.
The GST registration is mandatory for sole traders and companies with an annual GST turnover (Gross income minus GST) of $75,000 and above. Registration is also required for:
Non-profit organisations with a GST turnover of $150,000 and above
Businesses/enterprises providing taxi or limousine travel for a fare as part of the business, regardless of the GST turnover. This applies to both owners drivers and those who lease or rent a taxi.
Owners wanting to claim fuel tax credits for their business/enterprise
You are required to lodge a BAS even if your business did not earn any income or did not pay any expenses for the defined period.
If your business’s annual revenue falls below the threshold or doesn’t fit into one of the categories above, registering for GST is optional.
For those not registered for GST and are not required to, you can submit the alternative Instalment Activity Statement (IAS), which is a similar form. But this one does not include GST obligations.
Submission and Deadlines
The ATO mails your BAS when it’s time to lodge, provided you are properly registered for GST and your organisation has an ABN. This can either be monthly or quarterly.
You can also file the tax form via phone (for ‘nil’ BAS only) or by mail.
When it comes to reporting and paying GST, businesses have several options depending on their GST turnover.
For those with an annual GST turnover of $20 million or above, you have to report and pay your GST monthly. For those with a turnover below $20 million and have not been informed by the ATO that they need to report monthly, they can report and pay the GST quarterly.
For those who voluntarily registered for GST and did not elect to pay by installments, they can report and pay the tax (as well as claim credits) annually.
The due date for lodging and paying for the BAS are included on the form itself, which comes with its own unique Document Identification Number (DIN). If the due date falls on a weekend or a public holiday, the form can be lodged and paid the next business day without any penalty.
Quarterly deadlines, meanwhile, follow the fiscal year calendar. In Australia, the financial year starts on 1 July and ends 30 June of the following year.
Deadline of Lodging
1st– covers July, August, and September
2nd– covers October, November, and December
3rd– covers January, February, and March
4th– covers April, May, and June
If you choose to report monthly, the due date is usually the 21st day of the following month. You can get an extension to lodge and pay the BAS under certain circumstances.
Penalties for late lodging of the BAS starts at $110 for every 28 days past due. There are also small fines for mistakes in the form, be it deliberate or genuine mistakes. The fines will depend on the shortfall amount.
To avoid such penalties, it is wise to work with accountants, bookkeepers, tax agents, and other relevant professionals and organisations.
Financing Your BAS and other Needs
A budget for taxes should always be part of your finances, but sometimes, ends don’t quite meet. That’s where our loans can be of help.
We offer unsecured business loans to boost your company’s finances and grow your operations. You can use the funds for equipment, new hires or employee development, or any other needs you might have. You can also use it to pay for new acquisitions, or even for taxes if you fall short.
Properly handling the BAS is your duty as responsible business owners. With the right resources, and finances, it doesn’t have to be a taxing experience.
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