What Is A BAS Tax Return And Do I Need To Lodge?
Do you own a small business in Australia? Then you should check whether it is eligible for GST registration or not. If your business turnover is greater than a threshold value then you have to register for GST. There are also other conditions like non-profit earnings, vehicle charges which you need to meet to be eligible for GST registration. Now, once you register for GST, you have to submit a business activity statement or BAS which includes all the expenses over a course of a financial period. BAS is done for the necessary tax return.
What is a Business Activity Statement?
Business Activity Statement or BAS is nothing but a government form that you need to submit to the Australian Taxation Office. You can choose your submission period according to your size of the business. Most of the small businesses submit it quarterly. And so, you have to fill the form for four times in a year for a quarter submission. The information you can include in BAS are reports on Goods and Services Tax, Pay As You Go (PAYG) Instalments and other tax obligations.
Keep in mind that, you will only require lodging for BAS tax return only if your business is registered for GST. You do not need to register for the GST once you start your business, as you cannot know how much you will earn annually at that early period. But, once you start making high profits, you should get the registration. Before submitting BAS, you must get your ABN (Australian Business Number). Australian Taxation Office or ATO will send you timely notification about submitting BAS. So, you will not need to worry about that.
How can you prepare BAS?
You can opt for excel spreadsheets and fill out the information manually. But, as a business owner, you need to look after a hell lot of things. So, why will you spend ample time on preparing the BAS, while there are number of online tools available in the market? You can prepare your BAS without much haste. Here are some of the advantages you will get from using these software.
- Effortless report production: Digital software will definitely reduce physical labour and exhaustion. So, you can prepare not only reports on profit and loss but also balance sheet reports, quite effortlessly.
- Arrangement of useful information: You will be able to arrange the most necessary information required to lodge your BAS.
- Preparation of financial reports: And most importantly, financial reports can also be prepared without much difficulty.
But, there are drawbacks of these software tools also. You may have to face unnecessary problems, if you do not perform necessary research on the utility and the potential benefits of the software. You can read client reviews for that. Apart from online accounting software, you can also lodge BAS using ATO’s online business portal or a BAS agent Perth. If your business is registered as sole trader, then your myGov account will do.
What are the factors that you should consider while preparing your BAS tax return?
Following are the factors which you should keep in mind whenever you prepare your BAS tax return.
- Allocation of bank transactions: Bank transactions are required for a variety of jobs in a business like purchases, sales, payments, debt clearing. Whether all these transactions are made to the correct bank accounts that have to be checked carefully.
- Verification of bank balance: A mismatch in the bank balance information can be consequential. Always verify that the amount you mentioned in the accounting software gets matched with the one that is present in your actual bank account.
- Inclusion of tax invoices and receipts: Tax invoices and receipts are very important for the fact that, these provide enough evidence of your clarity in business. You must keep them carefully for the records.
- Checking of GST tax codes: You must check the correct GST tax codes for all the transactions you have made.
- Checking of GST tax code accuracy: Does your business involve overseas transactions? For any overseas purchase or insurance, it must be checked whether the tax code is written there accurately because inaccuracy will lead to misinformation that may cause a delay in the whole process and subsequent loss in the business.
- Keeping paperwork of purchases: It is recommended to keep all the paperwork of any new asset purchase or financial arrangement.
- Inclusion of any other taxes: Other taxes like PAYG withholding, fuel taxes, or fringe benefit taxes must be included in the statement, not just GST or PAYG installments.
The reason for which checking of BAS at every level is required is that it will increase the accuracy and also reduce the chance of rising in GST or PAYG installments at the end of a financial year. As you will have a clear idea about your liabilities, you will be able to maintain a steady cash flow.
What are the due dates for your BAS lodgement?
As told before, as a small business owner, you can lodge BAS quarterly in Perth or anywhere else in Australia. There are four quarters and in each of them, the due dates are as follows:
- Quarter – 1st April to 30th June: The due date in this quarter will be 28th July for you while that for your Tax agent in Perth will be 25th
- Quarter –1st January to 30th March: Want to prepare and lodge your BAS under this quarter? Then, the due date for you will be 28th April, and that for your BAS agent will be 26th
- Quarter – 1st October to 31st December: This is the only quarter where the due dates will be same for both you and your agent. That will be 28th February of the following year.
- Quarter –1st July to 30th September: For this quarter, the due date for you will be 28th October while that for your agent will be 25th
For necessary information and details, you can search on the internet. It is always advisable to consult with a professional advisor. You can choose from numerous tax agents in Perth who can guide you with proper methods and suggestions.