Are you an Australian business owner trying to stay on top of your taxes and manage your money better? Then, it is important that you understand what business activity statements (BAS) are and how they work.
BAS submission is mandatory for most businesses and failure to lodge a BAS within the required time can lead to severe penalties.
Understandably, it might be difficult to keep up with your BAS filings and other aspects of business tax compliance and that’s where this guide can help.
Read along as we explain the basics of business activity statements and provides practical tips for easy compliance to ensure your business remains in good standing with the tax authorities.
What is a Business Activity Statement (BAS)?
A business activity statement (BAS) is a form that businesses in Australia use to report their tax obligations to the Australian Taxation Office (ATO). It is used to declare and pay various taxes, including:
- Goods and Services Tax (GST): This is a value-added tax charged on most goods, services, and other items sold or consumed in the country. You are required to register and pay GST if your business’s annual turnover is $75,000 or more ($150,000 or more for non-profit organisations).
In such cases, your BAS must report the GST you collected from sales of goods and services and the GST paid on business expenses and purchases.
- Pay As You Go (PAYG) Withholding Tax: Under the Australian law, employers can deduct income taxes from their employees’ wages and remit the amount collected directly to the ATO. This helps ensure that employees’ income tax is paid progressively throughout the year rather than as a lump sum at the end of the financial year.
If you withhold employee taxes, every amount you’ve collected must be paid and reported in your business activity statement.
- Pay As You Go (PAYG) Instalments: PAYG instalments are regular, pre-determined payments of a business’s expected annual income and investment tax liability. The unique payment structure helps taxpayers manage their income tax obligations by spreading payments throughout the year, reducing the burden of a large tax bill at the end of the financial year.
If your business earns income from its operations or investments, you’ll likely be obligated to pay PAYG instalments. You must report your PAYG instalments through your BAS.
- Other Tax Obligations: Depending on the business’s specific situation, the BAS may also cover other tax-related obligations such as fuel tax credits or wine equalisation tax.
Business activity statements are primarily used as tax compliance documents but are also useful for monitoring cash flow and business transactions.
There are different types of BAS forms that can be issued depending on the nature of the business and the specific taxes to be reported. But you don’t have to worry about choosing the right form. BAS registration is automatic once a business is registered for an Australian business number (ABN) and GST.
As long as your business is registered, you can expect to receive the appropriate BAS form from the ATO when it is time to lodge.
What are the due dates for lodging and paying BAS?
Business activity statement due dates vary depending on each business’s unique tax obligations. However, most businesses are required to pay and lodge their business activity statements either monthly or quarterly.
For businesses with a monthly BAS reporting cycle, the due date is the 21st day of the month following the taxable period under review. For example, a monthly BAS for February will be due on the 21st of March.
On the other hand, businesses with quarterly reporting and payment obligations are expected to pay and lodge their BAS forms on or before:
| Due Date | Taxable Period |
| 28th February | October -December |
| 28th April | January -March |
| 28th July | April – June |
| 28th October | July – September |
If your due date falls on a weekend, you can pay and lodge your BAS on the next working day.
The ATO understands that it might be difficult to keep track of these dates, which is why they are usually displayed on each BAS.
Non-compliance with due dates could lead to additional fees and penalties. If, for any reason, you are unable to pay your BAS in full or meet up with the due date, it is important to contact the ATO as soon as possible. They might be able to offer you certain concessions to help you fulfil your obligations comfortably.
How to lodge a BAS statement
You can lodge your business activity statement (BAS) through any of the following methods:
Online
Lodging your BAS online offers several advantages, including convenience, reduced risk of errors, and the possibility of an additional two-week grace period to lodge after your due date has passed.
There are several online lodgement options, including:
- The ATO’s online service: to access this platform, you’ll need to create a MyGov account and link your MyGovID to the platform.
- Standard Business Reporting Software: If your business or accounting software has a standard business reporting function, you can use it to lodge your BAS. This type of software can help prepare your BAS using information that’s already captured as part of your daily business operations. If you’re considering adopting SBR software to streamline your records, the ATO has a register of compatible products that you can purchase depending on your needs.
By Mail
You can send your carefully completed BAS form (the original copy) to the ATO by mail. The current mailing address is:
Australian Taxation Office
Locked Bag 1936
ALBURY NSW 1936.
This option is available only to those who do not lodge their BAS online.
Through an Approved Tax or BAS Agent
You can outsource your BAS lodgement and general tax compliance to a registered tax or BAS agent to take the load off. All you need to do is provide the agent with your financial records, and they’ll ensure that your BAS is completed accurately and filed within the specified time.
Lawpath is registered as a tax agent with the Tax Practitioners Board. Our status empowers us to relieve you of your BAS burden and help you fulfil your tax obligations. We’d be glad to assist you and help you navigate the complexities of BAS lodgements.
Note that how you lodge your BAS for a current period determines how you will receive the next BAS form. For example, if you lodged your last BAS online, your next BAS form will be available online through the online services platform.
Similarly, if you lodge your BAS by mail, your next BAS form will be sent to you by mail. However, once you lodge BAS online, even once after a long period of mail lodgements, your subsequent BAS forms will be sent online.
BAS and GST record-keeping tips
The GST is arguably the most common tax for businesses of all sizes in Australia. It is a foundational component of the BAS because it is one of the primary taxes businesses must report and manage through this form. As stated earlier, registration for GST means automatic registration for BAS, further proving the strong relationship between both tax concepts.
As a business owner, you have an obligation to file accurate BAS statements every time. Considering the relationship between GST and BAS, this means that your GST must be calculated and reported accurately as well; otherwise, your BAS would be defective, which could lead to legal sanctions.
Proper record-keeping is the primary way to ensure that your GST calculations and business activity statements meet the required legal standards and stay on top of your business activities. Here are a few record-keeping tips to get you started:
:
- Keep copies of all sales and purchase invoices and receipts. This includes both digital and paper copies.
- Regularly reconcile bank statements with your accounting records to ensure accuracy.
- Use reliable accounting software (preferably one that allows you to prepare and lodge your BAS to track your income expense and GST). Ensure your chosen software updates in real time to reflect accurate financial positions.
- Use separate bank accounts and credit cards for business transactions to avoid mixing personal and business expenses.
- Keep records for at least five years as required by the ATO. This includes sales and purchase records, financial statements, and BAS lodgements.
- Regularly back up digital records to prevent loss of data.
- Consult tax professionals like those at Lawpath to ensure your records meet compliance standards and get advice on optimising your tax status.
- Finally, always ensure you have sufficient records to back up any business expenses claimed as tax deductions.
FAQs
What is ‘nil’ BAS?
‘Nil’ BAS refers to a business activity statement where no GST (Goods and Services Tax) is reported for the period, typically because there were no sales or purchases to declare. It is a way for businesses to indicate that no tax is owed or refundable for that period. Nil BAS reports can be made by phone call.
How do I get a refund, and where is it paid?
You may be entitled to a tax refund if your reported tax credits exceed your liabilities. If the ATO determines that you are entitled to a refund after reviewing your BAS, the money will usually be sent to your chosen bank account. The ATO may use the excess amount to offset your liability if you have any outstanding tax debts.
What happens when I’m not able to lodge and pay on time?
If you’re unable to lodge your BAS and pay on time, the Australian Taxation Office (ATO) may charge you penalties and interest. It’s important to contact the ATO as soon as possible to discuss payment plans or extensions.
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Get help with your Business Activity Statement at Lawpath
Your business activity statement BAS is a key tool for reporting and paying various tax obligations to the Australian Taxation Office, including Goods and Services Tax (GST), Pay As You Go (PAYG) instalments, and other tax liabilities.
BAS compliance is mandatory for most businesses, so understanding and accurately preparing Business Activity Statements (BAS) is crucial to avoid possible penalties and monitor your business’s financial health.
Keeping up with the ATO’s BAS and tax compliance deadlines might be difficult. If this is your situation, try our business tax compliance services today and simplify your BAS process.
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