A business activity statement (BAS) is a form that certain Australian businesses must submit to the Australian Taxation Office (ATO) to report their tax obligations. Some specific obligations include goods and services tax (GST), pay as you go (PAYG) tax instalment, pay as you go (PAYG) tax withheld, fringe benefits tax (FBT) instalment, and luxury car tax (LCT).
Some businesses are required to lodge a BAS, while others are not. In this post, we’ll explain all of the important details so you’ll know whether or not this is something you’re obligated to do, and we’ll also offer helpful tips and resources.
When it comes to determining which businesses are required to lodge a BAS, the criteria is pretty straightforward. If you’re registered for GST, then you must lodge a BAS, as this allows you to report and pay your GST and other tax obligations. If you aren’t registered for GST, then you’re not required to lodge a BAS.
GST registration is required for businesses that have a turnover of $75,000 or more or offer taxi travel. For non-profits, the minimum turnover is doubled at $150,000 or more. Check out this resource from the ATO to learn more about how GST works, and find out how to register.
To simplify matters, the ATO will automatically send you a BAS form when it’s time to lodge once you have registered for an Australian business number (ABN). This way you always have a heads up and aren’t caught off guard.
How Often Do I Have To Lodge A BAS?
The frequency in which you must lodge a BAS depends upon one single factor — GST turnover. Here’s how it breaks down:
- Quarterly – GST turnover is less than $20 million (and the ATO hasn’t told you that you have to report monthly)
- Monthly – GST turnover is $20 million or more
- Annually – You voluntarily registered for GST, and your GST turnover is less than $75,000 (or $150,000 for non-profits)
As a result, most businesses lodge quarterly. However, it may differ depending upon your circumstances. In terms of the specific quarterly dates in which you must lodge throughout the year, they are as follows:
- July, August and September – 28 October
- October, November and December – 28 February
- January February and March – 28 April
- April, May and June – 28 July
If monthly reporting is required, you must lodge and pay your BAS by the 21st of the month following the taxable period. So if you were lodging a BAS for March, the due date would be 21 April.
If annual reporting is required, the deadline is 31 October of each year.
You can lodge a BAS yourself or have a registered tax or BAS agent do it on your behalf. Also note that businesses with a GST turnover of $20 million or more must lodge and pay online. For more details on due dates for lodging and paying your BAS, check out this resource from the ATO.
Failure To Lodge Penalties
Lodging on time is crucial to avoid penalties and is required even if you didn’t do any business and have nothing to report.
“We recognise that sometimes people don’t meet their lodgment obligations on time, even with the best of intentions,” the ATO explains. “Generally we don’t apply penalties in isolated cases of late lodgment.” However, if you do get hit with penalties, they can be costly and something to avoid at all costs.
If applied, the failure to lodge (FTL) penalty is “calculated at the rate of one penalty unit for each period of 28 days (or part thereof) that the return or statement is overdue, up to a maximum of 5 penalty units” for small entities. For medium entities, the penalty is doubled. And for large entities, the number is multiplied by 5.
So as you can see, the costs can really add up in a hurry, especially for medium and large-sized businesses. The ATO will warn you either by phone or in writing if you’ve failed to lodge. So if you receive one of these notices, you need to respond right away and lodge your BAS as soon as possible.
What If I Can’t Pay On Time?
If you’re unsure whether you can pay on time, you should contact the ATO to check and penalties. To make the process smoother, be sure to have your tax file number (TFN) handy when calling so an agent can quickly find your tax records.
Even if you expect difficulty paying your BAS, you’ll still want to lodge on time to avoid penalties. You can learn more about debt and lodgment enquiries on this resource.
In some cases, you may be able to set up a payment plan where you can break it down into more affordable instalments. “You can use our payment plan estimator to work out a plan that meets your circumstances, taking into account the payment plan conditions and how quickly you can pay off the debt, including how much interest you’ll be charged, the ATO writes.
You can find the payment plan estimator here.
BAS Lodging Tips
There are several things you can do to simplify BAS lodging and make it easier when deadlines come around. First, keep thorough records of your sales and purchases. Not only is this important for staying on top of your financials, it will make your life much easier once it’s time to lodge a BAS.
Here are some specific records you need to keep according to the Australian Government:
- How much money your business makes and how much it spends
- Who you hire or employ
- Where your business operates from
- How things get done in your business
For a full list of records you should keep and how long you should keep them, consult this resource. There are also numerous software tools you can use to help, and this resource from Capterra offers some great reviews on top platforms.
Next, double check that you enter each tax invoice only once and that all of your expenses and sales are for the correct time period. Any inaccuracies there can throw your numbers off, so it’s critical that all of this information is correctly logged.
It’s also smart to create a separate bank account that’s specifically for GST. Doing so will make it much easier to report and pay once it’s time to lodge a BAS.
Finally, be sure to keep all of your tax invoices and GST records for five years. It’s important that you keep written evidence around for this length of time in case there are any issues or disputes
Understanding Your Obligations
The bottom line is that business owners who are registered for GST must lodge a BAS. Those who aren’t registered for GST, however, aren’t required to lodge a BAS.
If you fall into the former category, it’s important that you know when lodging deadlines are and always meet them on time. Following the tips listed above should help you do this more easily and avoid any unnecessary friction along the way.
If you’re currently behind on your BAS and in the ATO arrears, there are a few alternate working capital solutions available that can help. Selective invoice financing allows you to leverage certain invoices to obtain a cash advance, which you can use to pay your BAS. There are no long-term obligations, and you can get up to 95% of the value of your invoice, less any fees with approval typically happening within 24 hours. There’s also equipment finance, where you leverage equipment, machinery and company vehicles as collateral to obtain the necessary capital to keep you afloat.
To learn more about these and other options, contact Scottish Pacific today.
What are some techniques you use to keep your tax information organised?