Companies registered for GST need to lodge business activity statements with the ATO. To know about the BAS basics and best practices, keep reading.
Most business owners get cold sweats when they hear the term ‘business activity statement’ (BAS) — a form businesses registered for goods and service tax (GST) need to accomplish. One major reason why business activity statements cause undue stress usually has to do with a lack of preparation.
Also, things can get even more stressful if you haven’t been setting aside cash for BAS payments.
But what is the purpose of business activity statements?
Here, we’ll discuss the basics of business activity statements, so you and your company can start planning for BAS time.
Business Activity Statements 101
Australian businesses registered for GST submit their BAS on either a monthly, quarterly, or annual basis. This statement details a company’s earnings and expenses over a specific period and serves as a report of its tax obligations.
Lodging business activity statements requires you to supply details or specifics, including some or all of the following payments.
- Fringe benefits tax (FBT) instalment
- Fuel tax credits
- Goods and services tax
- Luxury car tax (LCT)
- Pay-as-you-go (PAYG) income tax instalment
- Pay-as-you-go (PAYG) tax withheld
- Wine equalisation tax (WET)
The Australian Taxation Office (ATO) issues business activity statements on either a monthly or quarterly basis. Therefore, your company’s reporting and payment cycle is determined by your GST turnover.
- Monthly: Your company has a GST turnover of $20 million or more.
- Quarterly: Your company has a GST turnover of less than $20 million, and the ATO has not required you to report monthly.
- Annually: This schedule is for organisations that voluntarily register for GST and have a GST turnover below $75,000 (or $150,000 for not-for-profit entities).
You’ll need to lodge the BAS form with the ATO and make the corresponding payment to them by the due dates stated below.
A monthly BAS should be lodged within 21 days of the end of the taxable month on the form. For example, a September BAS is due on 21 October.
There are set due dates for quarterly business activity statements. Instalment amounts are payable on the following dates for every quarter:
- July, August, September: 28 October
- October, November, December: 28 February
- January, February, March: 28 April
- April, May, June: 28 July
In general, the due date for lodging and payment is 31 October. However, businesses that aren’t required to lodge tax returns have a 28 February due date following the annual tax period.
Use BAS to Keep Track of Business Finances
Rather than viewing BAS as just another form you need to fill, you can use it as a tool to stay on top of your business finances. After all, you’ll have to keep track of your income and expenses to be able to calculate your GST and other liabilities on your BAS.
To avoid needless stress come BAS lodging time, practise the following:
- Track your income and spending regularly.
- Keep monthly printouts of the same.
- Check your business bank account balance to ensure you have adequate funds to make payments.
- Generate weekly or monthly profit and loss statements in addition to BAS reports.
When you integrate the above steps into your processes, you can stay organised, know your numbers and plan accordingly. And with ready data at your fingertips, you can set aside the funds you need to make payments and eliminate BAS-related stress.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.