BAS / PAYG Lodgements and PAYG
Whether you’re just starting out or ready to grow, we’ve got your back. Our online bookkeeping services can handle the BAS lodgements for your small business or startup.
BAS Lodgements for Small Businesses
What is a Business Activity Statement?
The BAS lodgement is how a business shows the government how much GST it has collected in sales. Your BAS is used to calculate the GST refund or bill you’ll receive from the government.
The Business Activity Statement (BAS) is a statement provided to the Australian Taxation Office (ATO). All businesses that are registered for GST need to submit a BAS – whether you’re a sole trader or a company.
The statement reports on how much GST you collected on sales during the period, and how much GST was paid on purchases to offset this. This information is used by the ATO to determine the taxes that your business is required to pay or be refunded for that period.
The BAS lodgement is a convenient way for businesses to tally up and pay for many different types of tax, all in one go. It helps you keep an eye on your business’s financial health, on a quarterly or a monthly basis.
Never worry about BAS lodgements again
Your BAS lodgement helps your business report and pay for many different types of taxes together. It also sets a schedule for you to pay taxes on a regular basis, rather than being hit with a large bill from the ATO all at once.
It’s easier to roll all the taxes together, to calculate and pay them in the same BAS lodgement. These taxes include GST, Pay As You Go (PAYG) for Income Tax, Fuel Tax Credits and Fringe Benefits Tax.
The regular timing of BAS lodgements makes it easier for businesses to meet their tax obligations. It can be stressful for businesses that haven’t been setting aside the money to pay for their taxes!
With a BAS agent’s online services, you can keep track of your tax obligations along the way – rather than letting it build into a surprise, come lodgement time.
Here at MicroChilli, we will take care of all of this for you as part of our monthly package price. Imagine that – never having to worry about another BAS lodgement again!
STRAIGHT FORWARD BAS
Use our BAS agent’s online services
Any business operating in Australia that is registered for GST needs to complete a BAS lodgement. A business must be registered for GST if it has a turnover greater than $75,000 in a financial year.
You can speak to your accountant or bookkeeper if you’re unsure whether this applies to your business. If you’d like to know more about what GST is and whether your business needs to be registered, please click here.
Having said that, there’s more to BAS lodgements than an extra chore for the ATO. Not only do BAS lodgements make it easier to pay taxes, they also give you a better view of the state of your business.
With a BAS agent’s services, you can keep on top of all the payments in your small business. By capturing this information, not only are you ready for each time you pay tax, but you have a ready understanding of the financial health of your business.
When do I need to submit a BAS?
The process of BAS lodgement can be different for large and small businesses. Most BAS lodgements are quarterly, but they can also be monthly or yearly.
For large businesses that are making profits in the millions per annum, it is likely you will have to submit your BAS every month.
If your GST turnover is less than $20 million and the ATO has not told you that you must report monthly, then you need to report quarterly. Quarterly lodgements are due on these dates:
- Q1 by 28 April, reporting January to March
- Q2 by 28 July, reporting October to December
- Q3 by 28 October, reporting July to September
- Q4 by 28 February, reporting October to December
A registered tax or BAS agent can help you prepare your BAS, and complete the BAS lodgement on your behalf through the business portal.
Many BAS agents offer online services – making it easier than ever to bring the best accounting software to your business processes.
BAS Lodgements – Quick-Fire Questions
How do I create a BAS statement?
Preparing your BAS lodgement is a multi-step, time-consuming process. Most businesses outsource to a BAS agent with online services, as the most cost-effective way to meet their tax obligations.
BAS agent services roll together the four steps of lodging a BAS: Reconciling information, checking for accuracy, totalling records, and lodging.
All business accounts need to be reconciled, and the information checked to be accurate and up-to-date. Your accounting information needs to match your bank statements.
All purchases and cash expenses need to be recorded, including cash transactions. Even with accounting software, it can take a while to gather the receipts and invoices for all business transactions.
Without accounting software, you’ll have to fill in any missing transactions manually, which can be very time-consuming. Each missing transaction will need to have its date, amount and GST recorded, according to your receipts and invoices.
Once all the information is compiled, the records need to be totalled. This is a simple matter for a BAS agent with online services, but without accounting software, you will have to manually add up all the numbers.
From the totalled records, BAS agent services will be able to work out how much GST is owed or needs to be refunded to your business.
For businesses with employees, your BAS agent can also calculate the PAYG tax that’s to be withheld from your employees’ payments.
The final step is to lodge the BAS. Your provider of bookkeeping and BAS services can submit your BAS lodgement through the ATO portal.
How hard is it to do your own BAS?
It’s possible to lodge your BAS yourself. However, BAS lodgement is a time-consuming process, and you have to be sure your information is accurate.
Even if you’ve been keeping accurate records, it can take a fair amount of effort to compile the documents for your BAS lodgement. Accounts need to be reconciled, information needs to be double-checked to be accurate, and outstanding funds have to be justified.
This includes reconciling all the receipts and invoices from any account that had business transactions, as well as cash transactions.
Missing transactions have to be filled in – either manually, using the information from receipts and invoices, or through the accounting software of a BAS agent’s online services.
Because your BAS lodgement is a legal requirement, it has to be done correctly. Mistakes can lead to penalties from the government. Save time and reduce risk by turning to a BAS agent who offers online services.
What are the most common BAS mistakes?
Unless you’re relying on BAS agent online services, it can be easy to make mistakes in a BAS. It’s difficult to work out what should or shouldn’t be included, without a BAS agent!
One of the most common BAS mistakes is to “double-dip” on GST. This is when business owners claim the full GST up-front on the purchase of a business asset, and then again on the regular recurring payments.
Another common mistake is to claim GST against all sales or all expenses. Some transactions – such as bank charges, Paypal transaction fees and online advertising expenditure – don’t have a GST component and shouldn’t be included in a BAS.
On the flip side, business owners often forget to include the GST from capital sales and purchases, for business assets such as vehicles or office equipment.
All cash sales and purchases need to be included in the BAS lodgement, and the ATO has a sophisticated system to cross-match data for cash payments.
Even if you have correctly included or excluded the information, it can wind up in the wrong part of the document, or under the wrong tax codes. For example, superannuation and wages are often input into the wrong sections of the BAS.
To avoid the risk of an ATO audit or even government penalties, your BAS needs to be correct. The most cost-, time- and risk-effective way to do your BAS is to use an all-in-one BAS agent with online services.
What should be included in a BAS?
Including irrelevant items is one of the most common mistakes that business owners make on their BAS lodgements.
Just because a transaction affects your profit and loss statements doesn’t mean it should be in your BAS. Only items related to GST should be included in a BAS.
Including irrelevant transactions on your BAS lodgement could misrepresent your tax obligations. There’s even the risk of triggering an ATO audit into your business.
Wages may or may not be included in a BAS, depending on the business. Wages should only be reported on the BAS if your business is registered for PAYG withholding – and only in the correct sections of the BAS document.
Other items that are not relevant to GST, and should be left out from the BAS, include superannuation, depreciation on business assets, principal repayments on finance, and tax payments.
The best way to avoid the risk of an incorrect statement is through a qualified BAS agent, with online services to make your BAS lodgement as smooth as possible.
What happens if a BAS is wrong?
The BAS is an effective way to bring together all the various taxes that a business needs to pay. However, this document has to be accurate, and there can be consequences if it isn’t – both financial and regulatory.
An inaccurate BAS – including if you’ve included information that should have been left off – can misrepresent your business’s figures.
If your BAS lodgement is wrong, it can affect the final calculations of the tax you owe. There’s no need to pay more taxes than you need to, or claim less tax refund than you could have!
An inaccurate BAS lodgement can even be as severe as triggering an audit. The ATO may step in to audit if they notice a large variation between the regular quarterly or monthly BAS reports.
Qualified BAS agent services are a painless way to take the admin hassles and business risks out of your hands. BAS agent online services bring the best of accounting software to streamlining your business’s tax obligations.
Who is legally allowed to prepare a BAS?
Any provider of BAS agent services needs to be registered for the job. They need to be either a registered tax agent or a registered BAS agent.
A bookkeeper isn’t necessarily the same as a BAS agent. Unless they are registered, a bookkeeper can only process, reconcile and report transactions. Only if they’re registered are they legally allowed to prepare a BAS, including advising or making sure you’re compliant.
BAS services must be provided by professionals in the relevant areas of GST law, including niche topics such as Pay As You Go (PAYG) withholding and instalments.
If you are paying for a bookkeeper to submit BAS lodgements on behalf of your business, make they have the right qualifications to handle tasks such as preparing your payment summaries and determining the GST codes.
Because BAS lodgement needs to be accurate, whoever is providing your BAS services needs to be qualified to make sure it’s compliant with the ATO.
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