In Australia, if you are the owner of a small business and it is registered for Goods and Services Tax (GST), you will be required to lodge a BAS or Business Activity Statement, either monthly or quarterly. You can decide to do it yourself or take help from a tax agent in Perth. The BAS Return lodgement can consume significant time and become confusing at times. That is why if you haven’t lodged it before and choose to do it independently, you must consider some tips on how to complete the statement quickly and accurately. All these tips are discussed here.
What is a BAS Return?
A Business Activity Statement is a formal document that summarises the amounts of various taxes, including GST, which the business has to pay at the end of the taxation season. A business has to be registered for GST in Australia if its annual turnover is more than $75000. Based on your convenience, you can choose to lodge it monthly or quarterly.
The Australian Taxation Office (ATO) issues the BAS and allows a company to report and pay different taxes at one time. Some of the taxes included in the BAS are as follows:
- PAYG withholding
- PAYG instalment
- GST
- Instalment notices for PAYG and/or GST
- Fuel tax credits
- FBT (Fringe Benefits Tax) instalment
If you want to pay the taxes monthly, make sure you lodge your BAS within the 21st of each month. In contrast, if you want to pay it quarterly, you must pay it on or before the 28th of February, April, October, and July. If you do not lodge it within time, a fine of $110 for every 28 days will be charged.
BAS lodgement can be done by post, online, by phone, or with the help of your BAS agent in Perth.
What important things should you check while lodging your BAS?
If you want to prepare your BAS while also saving time properly, you must check some crucial areas where people usually commit errors. A Business Activity Statement is a formal document that summarises the amounts of various taxes, including GST, which the business has to pay at the end of the taxation season. A business has to be registered for GST in Australia if its annual turnover is more than $75000. Based on your convenience, you can choose to lodge it monthly or quarterly.
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Make sure all the invoices and receipts are organised
It is one of the simplest yet most important pieces of advice that you must not ignore. The reason is simple. If you have not properly kept all the records, it will not be possible for you to lodge the BAS easily. As per ATO instructions, you have to account for every income your business has earned and the money that you have spent in the past five years. The BAS lodgement can consume significant time and become confusing at times. That is why if you haven’t lodged it before and choose to do it independently, you must consider some tips on how to complete the statement quickly and accurately. All these tips are discussed here.
So, all the outgoing and incoming amounts will include:
- Wages
- Interests, sales, and other revenues like royalties
- Utility costs, license fees, rent, and fuel costs
- Payments for essential services
- Equipment costs, including maintenance costs and lease payments
- Fringe benefits tax
Even though companies prefer digital transactions these days, your business can still receive paper records and receipts. Therefore, it will be good to have a document filing system for easier BAS preparation.
Check whether you are using the proper tax codes
Another important area you have to check is the tax codes you are using. Each type of tax has a different tax code, and so it should be given correctly. For example, GST is the tax code for Goods and Services Tax, while LCT represents Luxury Car Tax.
You must keep in mind that you will be required to set these tax codes up on the accounting software manually. So, it is always advised to discuss with your BAS agent or tax accountant before you start using the software.
Make sure you know what sales and expenses can be claimed against GST
Experts give this advice because some items cannot be claimed against GST. Keep in mind that you will have the option to reduce your BAS payments by claiming GST credits on business running costs for any GST included in the product’s price. For proving that you are eligible for the credit, you must keep good records of everything you have incurred. Once you earn the GST credits, you can record them into the accounting software you are using. For help, you may use the interactive GST calculation worksheet available on the ATO’s official website.
Make sure you are lodging your BAS within time
Whether you will have to file your BAS quarterly or monthly will depend on your business size. If you have a large company with an annual GST turnover of $20 million or more, you must lodge it monthly. On the other hand, you can lodge it quarterly if your organisation is smaller.
As your business owner, you are expected to file your BAS within time. One slip may be forgiven by the ATO, but if it happens repeatedly, hefty interest charges and penalties may be imposed on you, and so it is always safe to be aware of the BAS due date.
The benefit of lodging it through one of the BAS agents in Perth is that they are offered a few more days after the due date. Thus, hiring a professional will give you 2-3 weeks to finalise it.
Check if you have completed the W1 and W2 sections
This requirement has to be satisfied when you recruit staff in your organisation. Make sure you have included wages in the W1 section and not in the G11 section.
An important tip: open a bank account for tax instalments
It will be a good idea for tax instalments to set up a savings account that pays interest. In that account, you can keep the money to pay tax and make sure you do not touch it until the taxation season comes. Maintaining it will ensure adequate financial strength in the long run if you can maintain it. Experts give this advice because some items cannot be claimed against GST. Keep in mind that you will have the option to reduce your BAS payments by claiming GST credits on business running costs for any GST included in the product’s price. For proving that you are eligible for the credit, you must keep good records of everything you have incurred. Once you earn the GST credits, you can record them into the accounting software you are using. For help, you may use the interactive GST calculation worksheet available on the ATO’s official website.
You can also ask the Australian Taxation Office to deduct the expected PAYG and GST automatically.
Final words
Several BAS agent services in Perth can help you find a qualified BAS professional for your business. As BAS agents get extended lodgement deadlines, hiring an agent is always a good investment. However, do not forget to check their records while hiring.
