Bookkeeping can be scary if you’ve never done it before. Add in the ATO and BAS – well, that’s a recipe for running the opposite direction, amiright?
As you know, running a business involves more than just selling products or services. You also need to manage various financial aspects, including taxes. One important element of tax management is the Business Activity Statement, or BAS. I’ve broken it down simply so you can see it doesn’t have to be scary. Moreover, if at any point you have questions please feel free to reach out.
1. What is a BAS?
A BAS, or Business Activity Statement, is a form that businesses use to report and pay various taxes to the government. It helps the ATO track your business’s tax obligations.
2. What’s included in a BAS?
A BAS covers several taxes and obligations, including:
- Goods and Services Tax (GST): If your business is registered for GST, you collect this tax on behalf of the government.
- Pay As You Go Withholding (PAYGW): If you have employees, you withhold a portion of their pay to cover income tax and other obligations.
- Pay As You Go Installments (PAYGI): This is a way to pre-pay your income tax based on your business’s earnings.
- Other taxes and obligations: Depending on your situation, you might need to report additional items, like luxury car tax or fuel tax credits.
3. Reporting Periods:
BAS forms are usually submitted quarterly, but some businesses might report on a monthly or annual basis, depending on their turnover and other factors.
4. How to Complete a BAS:
Completing a BAS involves a few steps:
- Record your business’s sales, expenses, and other financial transactions during the reporting period.
- Calculate the GST you’ve collected from sales and paid on purchases.
- Report the relevant information in the appropriate sections of the BAS form.
- Pay any taxes owed to the government or claim a refund if you’ve overpaid.
5. Filling Out the BAS Form:
The BAS form itself is straightforward. It usually includes boxes where you input your financial data, such as sales, GST collected, GST paid, and other tax-related figures. You can do this either manually on paper or online through the ATO’s online services.
Using an accounting software like Xero makes this super simple. You can link your software to the ATO so the data is taken from the accounting software and is then digitally lodged. The benefit is all the data stays in one spot.
6. Important Dates:
Each BAS has a due date for submission and payment. Make sure to mark these dates on your calendar to avoid late penalties.
Not sure what those are? Check out this website.
7. Getting Help:
If BAS sounds confusing, don’t worry. You can get help from various sources, including:
- Your accountant or bookkeeper: A qualified accountant or registered BAS Agent can guide you through the process and ensure accuracy.
- ATO resources: The ATO provides guides, videos, and tools to help you understand and complete your BAS correctly.
The Business Activity Statement might seem a bit overwhelming at first, but with some basic understanding and a little help, you’ll be able to manage your tax obligations and keep your business running smoothly.
To help ease the discomfort and fear around bookkeeping I highly recommend using a bookkeeping software, like Xero. In them you can track your tax obligations, which helps to make BAS a lot less stressful.
Remember, if you’re ever unsure about anything related to your BAS, it’s always a good idea to reach out to your accountant or bookkeeper. They’ll be able to help you with your questions. If you don’t have an accountant or bookkeeper I’m always here to help!
Until next time,