A Comprehensive Guide to Business Activity Statement (BAS) for Small and Medium Size Business Owners

As a business owner, we understand the constant balancing act you face – juggling business operations, finances, and the often-complex world of tax responsibilities. A key part of this equation is the Business Activity Statement (BAS). It can seem like a daunting task, full of unknowns and potential pitfalls. However, don’t worry, we’re here to help navigate these waters.

What is a business activity statement (BAS)?

A Business Activity Statement (BAS) is a tax reporting requirement for businesses issued by the Australian Taxation Office (ATO). It’s used to report and pay goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding tax and other tax obligations.

The complexity of your BAS will depend on the nature of your business and the taxes you are required to pay. Regardless of the complexity, understanding the BAS is crucial for the financial health of your business.

How do I lodge my BAS?

Preparing your business activity statement

First things first, let’s start with the preparation of your BAS. This involves gathering all your relevant financial information. This could include invoices issued and received, salary records, and reports on business-related purchases and sales. Accuracy in this stage is crucial for avoiding discrepancies down the line.

Complete your BAS

Once you have all your information on hand, it’s time to complete your BAS. In this process, you will be required to fill in specific labels associated with the different types of tax you are obligated to pay. Be meticulous and ensure every detail aligns with your records.

Lodge and pay on time

The ATO outlines due dates for lodging and paying your BAS, which are typically quarterly for most small businesses, but can be monthly or annually depending on your business’s size and type. Ensure you meet these deadlines to avoid penalties for late lodgment. In recent times, the ATO has become much more aggressive in issuing penalties but we have a good track record of negotiating with the ATO to have the penalties remitted, provided there is a valid reason for the late lodgment.

How often should I lodge my Business Activity Statement (BAS)?

The frequency of lodging your Business Activity Statement (BAS) depends on your business’s GST turnover.

  • If your GST turnover is $20 million or more, you are required to lodge your BAS on a monthly basis. The due date for lodging and paying is usually on the 21st day of the following month.
  • If your GST turnover is less than $20 million, you usually lodge your BAS quarterly. The due dates are typically 28th October, 28th February, 28th April, and 28th July, for the corresponding quarters.
  • However, if you’re on a voluntary GST registration, you may opt to lodge annually. Voluntary GST registration applies to those businesses who choose to register for GST when their turnover is less than $75,000 annually.

Keep your records

Remember, the ATO requires you to keep records for five years. This aids in demonstrating your business’s compliance and is particularly helpful if you ever need to amend any details on a previous BAS.

Addressing Challenges with your BAS

The process of lodging your BAS may not always go as smoothly as expected.

What happens if I can’t lodge and pay my BAS on time?

Unexpected circumstances can sometimes prevent timely lodgment. If this happens, it’s crucial to get in touch with the ATO to discuss your situation. They may provide a deferral or establish a payment plan depending on your circumstances.

How do I fix a mistake on my BAS?

Errors do occur. If you realise you’ve made a mistake after lodging your BAS, you can correct it through revising your BAS or correcting it in your next BAS depending on the size of the error.

What are some helpful tips for completing my BAS?

Regular record keeping and monitoring of your financial transactions can ease the BAS preparation process. Utilising accounting software may also be beneficial as they can add consistency with processing and speed up the review process when used correctly.

Can I use a registered agent to do my BAS for me?

Absolutely! If you’re finding the process overwhelming, consider enlisting a registered tax or BAS agent. They can provide you with advice, lodge your BAS on your behalf, and may even be able to extend your lodgment due dates.

Get help

Don’t hesitate to seek help when needed. Many small and medium-sized business owners find it beneficial to use a professional service for their BAS responsibilities.

Need tax advice?

Are you looking for more tax-time tips for business owners? Or perhaps you’re still feeling unsure about your BAS? That’s okay! Impala Accountants offers comprehensive tax services for businesses of all sizes.

Keep in mind that while these are general guidelines, the Australian Taxation Office (ATO) may require you to report more frequently in some circumstances. It’s always recommended to confirm your reporting requirements directly with the ATO or your accountant to ensure you meet all obligations. If you’re feeling uncertain, don’t hesitate to book an appointment online or call us at 0755361960 for professional advice tailored to your business.

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