Navigating BAS time in a small business: the must knows

So, what exactly are BAS statements, do they apply to you, and how do you complete and lodge them?

Read on as I answer all of these questions, and provide some best practice tips to help ensure this process is a breeze.

BAS lodgement timings: it depends on your income

If your income is more than $75,000 and less than $20 million per year, then you are required to lodge these statements each quarter. However, you firstly need to register for the 10% goods and services tax (GST).

The main ways to do this are online, via phone, or through a registered tax or BAS agent (like the MicroChilli team!), and make sure you have an Australian Business Number (ABN), too.

If you’re just starting out and don’t think you’ll earn over $75,000, make sure you keep an eye on your monthly earnings. If and when you reach the threshold, be sure to register for GST. You’ll also need to submit a BAS statement with your annual tax return, whether you’re registered for GST or not – this will often mean you report a ‘nil BAS.’

BAS works on a credit – debit system

Once you’ve registered for GST, the ATO requires you to lodge a BAS statement. For small business owners, it will generally need to include details about how much GST you’ve collected on your sales, and how much GST you paid when making purchases for the business.

They’ll then use this information to calculate whether you need to pay a sum of money to them, or you might even receive a refund if the GST paid on purchases is higher than what you collected.

If you have employees, you’ll also need to report Pay As You Go (PAYG) withholding information, and then there’s also things like fuel tax credits (the tax that’s included on fuel) if you use a car, machinery and other equipment to run your business, as well as fringe benefits tax, among others.

Lodging your BAS: consider online methods, and a registered agent

The main ways to lodge your BAS are online through MyGov, the ATO portal, or by using standard business reporting (SBR) enabled software – aka your accounting and bookkeeping platforms.

These tools are great for small business owners, as you can use the information that’s already been captured by them to complete your statements. You can also lodge by post, but this tends to mean longer processing times!

It’s always good to look to a pro if you’re unsure what to include in your statements, and to determine what you owe, or whether you might be eligible for a refund. This will ensure your numbers are correct before you lodge, and they can also handle the submission process for you.

Four best practice BAS tips 

These are our top four tips when it comes to streamlining and simplifying the BAS preparation and lodgement process:

• • Record keeping is key. Keep things like your receipts, invoices, wage information, stocktake records, and logbooks if you’re claiming fuel tax credits on file. This will make the data much easier to find when you need it, plus you need to keep all of these records for five years.
    

  
  

  • Commit to monthly reconciliations. Aim to reconcile your sales with bank statements at the end of each month, as whatever information you submit needs to match what’s in your account. This will ensure you’re aware of how your business is tracking, and that you report correctly when BAS time comes – it’s where a bookkeeper can add a lot of value too, if you struggle to find the time to do this!

  
  

  • Claim your credits correctly. When looking at how much GST you’ve paid on purchases, make sure these relate to the running of your business. If you sometimes use the products or services on a personal basis, you’ll need to work out what percentage of the time you use them to actually run your company. There are also important considerations when it comes to claiming credits on large business assets – we often see business owners accidentally ‘double dip’ on their credits.
    

  
  

  • Look to the experts. If numbers aren’t your forte, outsource this service to someone who lives and breathes them. This will ensure accurate reporting, and save you a lot of time, plus there are many affordable solutions out there these days!

Not sure you’ll have the time to prepare and lodge your BAS this quarter, or find you’re constantly missing the deadlines?

Why not book a complimentary consultation in with us. We provide a wealth of BAS and PAYG related services, including reconciling your information, checking for accuracy, totalling records, and lodging your statements for you.

We’re also offering free financial health checks valued at $495 right now!