A Business Activity Statement, otherwise known as a BAS, is a form used by businesses to report and pay their tax liabilities to the Australian Taxation Office (ATO).
A Business Activity Statement is used to report on the Goods and Services Tax (GST) amount that your business has collected on its sales minus any GST that you’ve paid on your purchases, with the net difference being what you are refunded or required to pay to the ATO.
Your Business Activity Statement can also include Pay As You Go (PAYG) withholding and instalments, and other kinds of tax. To learn more about PAYG withholding and instalments, see our article here.
Types of taxes to be paid through a BAS
Business activity statements are used for various tax obligations a business may incur, including Goods and Services Tax (GST), PAYG withholding tax (PAYG), Fringe Benefits tax (FBT), Luxury Car Tax (LCT), Wine Equalisation Tax (WET), and Fuel Tax Credits (FTC).
Goods and Services Tax (GST)
GST tax is a tax unique to Australia and New Zealand that is a value-added tax of 10% on most goods and services in Australia. You use your BAS to report and pay the GST your business has collected and claim GST credits. GST credits must be claimed within the required timeframe of four years. The four-year period commences from the due date of the earliest activity statement in which the credit should have been claimed.
Pay As You Go (PAYG)
PAYG Instalments are income tax instalments paid incrementally towards an anticipated tax liability. The PAYG Instalment amount can be calculated using the ATO rate or ATO instalment amount, which is derived from information you gave the ATO in your most recent tax return. If there has been a large fluctuation in the turnover compared with the previous year, you may prefer to work out the instalment rate based on actual income using the ATO's instalment rate in order to determine a more accurate amount.
The ATO generally sends PAYG instalments in the form of an instalment notice rather than a BAS.
When to submit a Business Activity Statement
If your business turnover is $20 million per annum or less, you have the choice to lodge your BAS on a monthly or quarterly basis. For businesses with over $20 million turnover per annum, you must lodge your BAS monthly.
If you choose to lodge your BAS on a monthly basis you must lodge it on the 21st of the following month, from January through to December.
If you choose to lodge your BAS on a quarterly basis you must lodge it on the following dates below which correspond to each of the four quarters in the Australian financial year:
On the 28th of October for the first quarter; July, August, and September.
On the 28th of February for the second quarter; October, November, and December.
On the 28th of April for the third quarter; January, February, and March.
On the 28th of July for the fourth quarter; April, May, and June.
You can only report your BAS on an annual basis if you have voluntarily registered your business for GST and its GST turnover is under $75,000, or $150,000 for not-for-profits.
How to submit a BAS
A BAS may be submitted in one of three ways:
Via a paper form, which you mail to the ATO using the pre-addressed envelope provided with the BAS package. If you have misplaced the envelope, the address you need to send the BAS to is:
Australian Taxation Office Locked Bag 1936 ALBURY NSW 1936
Electronically via MyGov if you are an individual or sole trader, using the online services for business if you are a business, or via SBR-enabled software which allows secure online lodgement.
Via a Registered Tax Agent or BAS Agent
Penalties for not complying with BAS obligations
It is important to complete and lodge your BAS on time, whether it be monthly or quarterly BAS, because you may be subject to a failure to lodge penalty (FTL) if you do not. If you are often late in lodging your BAS you may be eligible for higher fines.
A business can lodge its BAS in multiple ways, via a tax agent, a BAS agent, or you can lodge your own BAS online using online accounting software. If you are a sole trader you can lodge your BAS through your MyGov account. Regardless of how you lodge your BAS, it is important you do so in a timely manner in order to ensure your business meets its tax obligations.
If you are having trouble with lodging your BAS on time, you can request an extension for the lodgement date or a payment plan from the Australian Taxation Office (ATO) prior to the due date. To learn more about ATO Payment Plans, see our article here. You can also make a voluntary early payment to offset future BAS liability.
If your business is currently not registered for GST and you think it should be. If you're having trouble with calculating GST and issuing tax invoices, please reach out to us.
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Any advice contained in this document is general advice only and does not take into consideration the reader’s personal circumstances. Any reference to the reader’s actual circumstances is coincidental. To avoid making a decision not appropriate to you, the content should not be relied upon or act as a substitute for receiving financial advice suitable to your circumstances.