TAX • 24 NOVEMBER 2022 • 6 MIN READ

What you need to know about BAS as a business owner

SECTIONS

What is a BAS statement?

Who needs to lodge BAS?

When is BAS due?

How to prepare for a BAS lodgement?

How to lodge BAS?

What if I miss the BAS due dates?

What if I made a mistake on my BAS?

Australian business owners are aware of the importance of BAS statements, but when the deadline approaches, many of them become anxious.

From what is a BAS statement, BAS due dates to how to prepare for a BAS, we’ve got these common questions covered in this blog.

What is a BAS statement?

‘What does BAS stand for?’ is a common question amongst new business owners. BAS is the acronym for Business Activity Statement in Australia. BAS helps the ATO to get on top of your tax liabilities - the amount of tax you have collected and paid.

If you are GST-registered, then you’ll need to lodge a BAS statement either on a monthly, quarterly or annual basis. We’ll talk about BAS lodgement frequency and due dates in more detail later in this blog. Apart from GST (Goods and Services Tax), it also covers a number of other tax obligations such as

PAYG withholding
PAYG instalments
FBT (Fringe benefit tax)
LCT (Luxury car tax)
WET (Wine equalisation tax)
Fuel tax credits

Who needs to lodge BAS?

You need to submit BAS lodgement if you’re registered for GST. The golden rules for GST registration in Australia are below:

The GST registration threshold is $75,000 in Australia. You’re required to become GST registered if your GST annual turnover is above $75,000 or you expect your GST annual turnover to exceed this threshold.
You have to be GST registered if your nonprofit organisation has an annual GST turnover over $150,000 per financial year.
If you’re a taxi driver or provide ride-sharing services (e.g., Uber), you have to be GST registered regardless of your annual turnover.

What is GST annual turnover?

GST turnover is based on the gross income (before tax) of your business, excluding any:

GST included in sales to your customers
Sales that are not for payment and not taxable
Sales not connected with an enterprise you run
Input-taxed sales you make such as sales of Financial Supplies like Shares or rent from residential accommodation
Export of goods or services – and any sales not connected with Australia.

When is BAS due?

BAS due dates depend on your businesses’ reporting cycle and they’re displayed on your BAS statement. In Australia, BAS lodgement frequencies are monthly, quarterly, and annually.

Monthly

If your businesses’ annual GST turnover is more than $20 million, you need to lodge your BAS monthly. Your BAS due date is the 21st of the following month. For example, your May BAS will need to be lodged on June 21st; your August BAS will need to be lodged on September 21st.

Quarterly

For businesses whose GST turnover is less than $20 million, your BAS reporting and payment cycle is each quarter, unless the ATO has told you to report on a monthly basis.

Quarterly BAS are due on the 28th of the month following the end of the financial quarter. The dates are as follows:

Quarter 1: July, August, September – 28 October
Quarter 2: October, November, December – 28 February
Quarter 3: January, February, March – 28 April
Quarter 4: April, May, June – 28 July

Annually

If you become GST-registered voluntarily and your annual GST turnover is less than $75,000 (or $150,000 for non-profit organisations), you need to report your BAS annually. The BAS due date for annual reporting is 31 October.

How to prepare for a BAS lodgement?

There are 3 key steps for BAS lodgement, they’re as follows:

1. Prepare your information

Do you have all the information you need to report? This involves ensuring all the receipts, bank statements, and valid tax invoices are matching the information you have in your accounting software. Performing a bank reconciliation is a good way to ensure you haven’t missed anything.
Are there any GST free transactions?
Are the transactions in the right reporting period?
Are there any outstanding bills?
Are all the expenses for business activities? Do you have any expenses for personal use? Ensure you do not claim GST for private expenses.
Do you have any cash payments or cash expenses?
Are all your transactions coded correctly in your accounting software?
If you use an accounting system, make sure you reconcile your GST payable to your general ledger.

2. Complete your BAS statement form: the next step is to complete your BAS statement using the chosen lodgement method (e.g., online, by mail). If you’re working with an accountant or a tax agent (BAS agent), they should take care of this for you. The ATO provides a BAS statement example for your reference. Even if you have nothing to report, you still need to lodge your BAS as ‘nil’. The easiest and fastest way to lodge is online.

3. Lodge your BAS

You should submit BAS lodgement and pay the ATO on time
Keep a copy of your BAS statement and update your accounting information

How to lodge BAS?

There’re a number of ways to lodge a BAS statement:

Lodge BAS online: you can choose to lodge your BAS online through MyGov (if you’re a sole trader), via ATO’s business portal or through an SBR-enabled software.
Lodge through a tax agent or a BAS agent: if you have a registered tax or BAS agent, they can lodge BAS on your behalf. There are some obvious benefits to using a registered tax or BAS agent, you can find out more on 3 reasons your BAS should be done by a BAS agent.
Lodge by mail: you can mail your original, completed BAS using the pre-addressed envelope included in your BAS package.
Nothing to report (nil BAS): you can lodge your nil BAS online or via phone if you have nothing to report during the period.

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What if I miss the BAS due dates?

It’s important to know that it’s your responsibility to be compliant because late penalties can incur if you miss the deadline. Check out the key dates on our tax calendar and mark them as important.

If you can’t pay the amount you filed in BAS on time, ATO is understanding - you may be eligible for a BAS payment plan. It’s worth noting that individuals, sole trader, businesses, registered tax or BAS agents on behalf of their clients can enter into a payment plan. Use this handy payment plan estimator provided by the ATO.

What if I made a mistake on my BAS?

There are differences between making a mistake or making an adjustment - but the most important thing is don’t panic!

A mistake or an error typically involves reporting the incorrect amount in your BAS. Examples are that you classified a GST-free purchase as taxable or you’re double counting some of your purchases. If you’ve made a mistake on GST or fuel tax credits, it needs to be corrected in your next BAS lodgement. If you can’t correct your mistake, then you’ll have to lodge a revision.

An adjustment tends to relate to the fact that your BAS was correct at the time when you lodged it but later changed. For example, the price of sales has changed or goods you have sold returned to you or the split between business and private use was your best guess at the time but the actual came in slightly different. To make an adjustment, you can either do it online via MyGov, through an SBR-enabled software or let your accountant or tax agent (BAS agent) take care of everything.

Find more information on fixing BAS mistakes or making adjustments on ATO’s website.

How Beany can help

Take the stress out of preparing your BAS by relying on your dedicated Beany accountant who can take care of your books while you focus on what you do best. Find out more information here or talk to one of our problem solvers!