What is BAS in Australia, and how to lodge it?
Every legit business has to pay various taxes. To pay these taxes correctly, there are various forms that need to be filled out to put your business on the map and help you with tax refunds and bills. One such form is BAS.
The Business Activity Statement (BAS) is an essential document that needs to be submitted to the ATO to pay all tax liabilities and payments. Keep reading to learn: what is BAS? How to do BAS statements? How to lodge a BAS statement?
A Business Activity Statement (BAS) is a form that has to be filled out according to the business size, anywhere between one to twelve in a whole year. This is a form submitted to the Australian Taxation Office to process the GST tax bills and refunds of the business.
PAYG withholding and installments, employees' income tax, income tax, wine equalization tax, and fuel tax credits are also included in BAS.
The goods and services tax amount that your business incurs from making sales and subtracting the amount you have paid for the purchases made is recorded in the BAS statement. The difference between the sales and purchase amounts is the amount you owe to the ATO or your refund total.
For better understanding, when you purchase supplies for the business, and you are charged 10%, which can later be refunded as credit from the ATO.
On the other hand, the amount you owe to the ATO is the GST you collect from your customers. So, for example, if your business is charged $30 as GST, so you will charge your customer $35. That extra $5 is the GST you need to submit to the ATO.
Every legit business in Australia is required to lodge a BAS statement. Every small business is especially under the mandate to lodge a BAS statement.
It is compulsory to register GST if your organization is a non-profit type and creates a turnover of $150,000 or more per financial year.
GST registration is also mandatory if your business’s GST turnover is $75,000 or more every financial year. This GST turnover is calculated by subtracting the Gross Income from the total GST. Taxi or ride-sharing drivers are also supposed to register for GST, irrespective of their turnover.
Correctly filing taxes is a difficult task, especially for small business owners who must complete numerous forms and filings. Check out our guide on how to file tax return for small business and do hassle-free tax filing.
Businesses that prepare their own BAS statement lodge it online. It is quick, secure, and easy.
Lodging online is convenient, facilitates faster refunds, and gives you the chance to recheck the BAS statement and check all the calculations of what you are supposed to pay and receive before finally submitting the statement.
Another way to lodge your BAS statement is through a tax or BAS agent. This agent can look into your BAS details and lodge and pay on your behalf.
Through their online portal, you can access all your BAS information and keep a check on everything, even if the agent is filing the BAS statement.
If none of the above options is preferred for your business, you can directly mail the hard copy of your BAS statement to the ATO. The BAS package you send must have the original BAS copy.
White-out correction changes on any mistakes in the copy are allowed. You can call ATO support on 13 28 66 to report any BAS issue.
Your annual business turnover is the basis according to which you can decide when to lodge your BAS statement and how often.
1. If your annual turnover is more than $20 million - lodge your BAS statement every month. The deadline for the submission is 21 days prior to the month's closing.
2. If your annual business turnover is less than $20 million - lodge your BAS statement quarterly. The quarterly BAS statement due dates are:
• (July-September) Quarter 1 - 28 October
• (October-December) Quarter 2 - 28 February
• (January-March) Quarter 3 - 28 April
• (April-June) Quarter 4 - 28 July
3. If your annual business turnover is less than $10 million - lodge your BAS statement annually. However, the quarterly GST installments that you owe to the ATO still have to be paid.
4. If your annual turnover is less than $75,000 (or $150,000 for non-profits) - again lodge your BAS statement annually. The deadline for this submission is with the income tax return dates.
If, because of any circumstances, you miss a BAS statement due date, the ATO charges a fine to the business.
The first step in how to lodge a BAS statement is to prepare and assemble all the necessary information to be filled into the BAS form. Stay on top of all the accounting and expense data. Reconcile all transactions and maintain an accurate database.
All the receipts, business expenses, invoices, and other documents should be in correlation with the accounting data. There should be no errors or inconsistencies.
Step two on how to lodge a BAS statement is to put together all the numbers and do the final calculations. With the accurate numbers already in your hands, you can do the GST calculation manual using any GST calculation worksheet or reference.
However, the better and easier way would be to use an accounting automation software that automatically keeps a log of all the numbers and calculates the GST itself. Now that you will have the final numbers in your hand, you just have to transfer them or fill them into the BAS form.
The final step is to lodge your BAS statement. You can do this in three ways.
• Fill out and lodge the BAS statement online. This is done on ATO’s business portal.
• Second, you can send the hard copy of your BAS statement to the ATO.
• Third, you can get a BAS or tax agent to do it for you.
*Note: Always keep a copy of your BAS statement and update your accounting sheets with the necessary.
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