Been hearing a lot about business activity statements, and feeling more than a little pressure? Kicking off the new year for your business shouldn’t be shrouded in the darkness that can be a looming BAS. But how can you be certain that your business is prepared?
To start with, demystifying the BAS might alleviate some of that anxiety and pressure your business may have been facing. Essentially, a business activity statement (BAS) is a government form that all businesses must lodge to the Australian Tax Office (ATO). All businesses registered for GST need to lodge a business activity statement (BAS). This can be done with the assistance of a registered tax agent or BAS agent.
A BAS is a summary of all the business taxes you have paid or will pay to the government during a specific period of time. You may lodge your BAS monthly, quarterly or annually or may do so through your tax/BAS agent.
You may instead be eligible to submit an Instalment Activity Statement (IAS). In the IAS, the ATO tells you every quarter what your GST instalment amount is and where applicable your PAYG instalment amount is. Essentially, the IAS is a form that is similar to the BAS, but simpler in that you do not have to be concerned about GST and some other nominated taxes.
Businesses that are not registered for GST and individuals who are required to pay PAYG instalments or PAYG withholding (such as self-funded retirees) use this form to pay PAYG.
IAS provides a little more flexibility in the arrangement as the instalments are advised by the ATO on what you need to pay to cover your liabilities.
You may be able to vary those amounts if you feel that the advised instalments are too much or not enough to cover your liabilities. You may also be able to pay the amount in one lump sum at the end of the year. Before changing the amount due, or the timing of the payment, it’s best to consult with us (or your registered BAS agent) for additional advice to suit your circumstances.
Preparing For Your BAS
Your IAS and BAS can be used to assist in monitoring your business finances. Though you only need to lodge these every quarter, waiting until the due date to get all of the information you require for the statements may cause you to miss out on critical observations (such as how much you may actually owe the ATO).
Daily tracking of your income and expenses can assist in calculating your GST and other liabilities on your BAS, and allows you to ensure that there won’t be any nasty surprises waiting for you.
Here are some tips on how you can prepare for your BAS or IAS this quarter
- Get everything up to date (such as your accounting software), and ensure that all of your bank feeds are imported, allocated and reconciled
- Check that your bank account for your business has enough money in it to cover your BAS payment
If you have any queries please contact our office on (03) 9728 1448
Have a great day,
The team at TAS Tailored Accounting Solutions
This publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.