BAS Explained for Beginners
If you own and operate a business in Australia, you have to fulfill a variety of tax obligations. Among those, BAS Lodgement is one of the important tasks associated with your business operations. But if you are a novice business owner, it might sound confusing to you. However, understanding what BAS is, how it works, and when to prepare can help. For this, consulting Kirpa Tax Accounting Firm is really useful to leave no doubts and confusion in mind. For most Aussie businesses, preparing this report for the ATO means a lot of paperwork, stress, and computations. But once you are familiar with it, things become easier for you surely.
Business Activity Statement – A Glimpse for You!
As a business owner, you need to pay certain taxes, and lodging BAS is clearly associated with them. It’s a validated document that you need to submit to the Australian Taxation Office. If your business is registered for goods and services tax (GST), you need to prepare this statement. It shows transactions where you have collected GST from your customers on behalf of the government. If your business has 75000 AUD or more turnover, you need BAS Australia preparation. Also, if you own a non-profit organization with a turnover of 150000 AUD or more, you need BAS.
Information you need to provide to the ATO through BAS
By using this report, you can inform the ATO about several tax figures. Check below what information it covers for reporting to the Australian Taxation Office.
GST Collected and Paid
Your Business Activity Statement (BAS) covers information about GST paid by you on eligible purchases. Also, you need to report GST collected from customers on applicable goods sales. The difference between the two determines whether you get a refund from the ATO or pay it to the ATO.
- Report PAYG Withholding
If you have employed staff, you are liable to report PAYG withholding to the ATO. Report employee wages, tax withholding, and contractor withholding, if any. You may prepay expected PAYG instalments to the ATO, which ultimately reduces your taxable income during the annual tax return.
- Reporting Other Taxes
Australian Taxation Office wants you to lodge a BAS to report certain taxes. These taxes include fringe benefits taxes, luxury car tax, and wine equalization tax. However, these taxes are only applicable to certain industries such as wineries, car importers, corporate finance, etc.
Reporting Frequency of BAS Explained
Based on your business turnover, the ATO assigns responsibility for BAS reporting, which is as follows.
- Monthly BAS Lodging
If your yearly GST turnover is AUD 20 million or more, lodge a BAS every month.
- Quarterly BAS Lodging
You can lodge BAS for a small business quarterly on dates such as 28 October, 28 February, 28 April, and 28 July.
- Annual BAS Lodging
Annual BAS reporting is suitable for businesses that have registered for GST voluntarily.
Prepare your BAS Accurately with Expert Help
Preparing BAS involves rigid GST computations and record analysis, which is time-consuming. So, Kirpa Tax ensures your BAS Australia is prepared with utmost precision for ATO reporting and compliance.
FAQ’s
What is the full form of BAS in Australia?
BAS stands for Business Activity Statement, a special GST reporting format. It is used to meet the tax obligations of the Australian Taxation Office (ATO).
Is BAS reporting the same as filing the tax return?
No! BAS Australia is used to report GST collected and paid by businesses. An income tax return is prepared to file your yearly tax return for revenue earned.
Which businesses need to lodge a BAS for the ATO?
Businesses that are registered for GST due to a turnover of 75K AUD or more need BAS Lodgement. Even if there’s no business activity, they need to report.
Can I submit a NIL BAS to the ATO for my business?
Yes! You should prepare a Business Activity Statement even if there are no GST sales or purchases. You should meet the ATO compliance requirements with timely BAS report preparation.
Do I need to prepare BAS as a sole trader in Australia?
Yes, if you are registered for GST and have PAYG withholding, you must prepare. Guide of BAS Explained by Kirpa Tax can help with it.
Can I claim GST from the ATO on all business purchases?
You can only claim GST credits on eligible goods supported by tax invoices. You must pay GST collected on sales of goods to the Australian government.
Do I need to hire an accountant for BAS preparation?
If your business has complex transactions, GST compliance, and PAYG withholding, you can hire. Consult Kirpa Tax for precise BAS preparation and reporting to the ATO.