February 1, 2022

What you need to know about Business Activity Statements (BAS)

If you’re a business owner or sole trader, you need to know how to prepare for Business Activity Statements (BAS). This article will take you through the steps you need to take to get ready for your BAS, including when to lodge and what information needs to be included. So whether you’re new to BAS or just wanting a refresher, read on to get the advice you need to get your business on track.

What is a BAS?

A business activity statement (BAS) is a government form that all businesses registered for GST must lodge to the Australian Tax Office (ATO). Essentially, it is a summary of all the business taxes you have paid or will pay to the government during a specific period of time.

What do I need to include in a BAS?

If you are registered for GST, the following must be included in your BAS:

  • Goods and services tax (GST)
  • Pay as you go (PAYG) income tax instalments
  • Pay as you go (PAYG) tax withheld
  • Fringe benefits tax (FBT) instalments
  • Luxury car tax (LCT)
  • Wine equalisation tax (WET)
  • Fuel tax credits

How often do I lodge a BAS?

A BAS is issued by the ATO either monthly or quarterly. A form needs to be lodged with the ATO and payment made to the ATO by the due date. An experienced tax agent or BAS agent can help you complete and lodge your BAS according to ATO guidelines.

For monthly BAS the due date for payment is within 21 days of the end of the month on the form.

For quarterly BAS the due date for payments are:

  • Quarter July – September: Due 28 October
  • Quarter October – December: Due 28 February
  • Quarter January – March: Due 28 April
  • Quarter April – June: Due 28 July

What is an Instalment Activity Statement (IAS)?

Instead of a BAS, you may be eligible to submit an Instalment Activity Statement (IAS). Essentially, the IAS is a form that is similar to the BAS, but simpler in that you do not have to include GST and some other nominated taxes. In the IAS, the ATO tells you every quarter what your GST instalment amount is and, where applicable, what your PAYG instalment amount is.

This form is used by firms that are not registered for GST, and individuals who must make PAYG payments or have their earnings withheld (such as self-funded retirees).

IAS provides a little more flexibility in the arrangement, as the installments you need to pay to cover your liabilities are advised by the ATO.

If you believe the advised instalments are too much or not enough to cover your liabilities, you may be able to change them. You may also be able to pay the amount in one lump sum at the end of the year. Before altering the amount due or payment timing, consult with our team (or your registered BAS agent) for additional advice to suit your circumstances.

How to prepare for a BAS or IAS

BAS and IAS can be a great way to monitor your business finances. Though you only need to fill these forms out every quarter, waiting until the due date may cause you to miss important information such as how much money is owed to the ATO.

A daily log of your income and expenses can show you where your money goes and help you avoid nasty surprises when it comes to calculating GST, as well as other liabilities on a BAS.

Here are our top tips for how you can prepare for your BAS or IAS this quarter:

  • Everything should be up to date (such as your accounting software), and all of your bank feeds should be imported, allocated, and reconciled.
  • If you’re completing the BAS on your own, make sure you print off your accounting reports each week. This should give you an idea of how much you’d have to pay if your BAS was due right away.
  • Check that your business’s bank account has adequate funds to cover the BAS payment.
  • After printing your BAS reports, make a profit and loss statement to show you how much money has been made so far in the current week (or month) to date.

In conclusion

Completing a BAS can be daunting, but with careful preparation it doesn’t have to be. Ensuring all of your information is up to date and reconciled, along with having adequate funds in your business bank account, are essential steps that will help make the process smoother. Having a log of your income and expenses will also give you a good idea of where you currently stand financially so you don’t get any nasty surprises when it comes time to lodge your BAS.

If you’re feeling overwhelmed or need some assistance preparing for your upcoming BAS or IAS, we are here to help

Our professional tax agents are dedicated to ensuring you stay on the right side of the ATO and avoid additional fees, penalties or interest charges. Contact us for further advice related to completing and lodging your BAS or IAS.

Filed Under: Accounting, Compliance, Tax

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