Business Activity Statements (BAS) are essential for businesses registered for GST in Australia. They help report and pay various taxes, including goods and services tax (GST), pay-as-you-go (PAYG) installments, PAYG withholding tax, and other taxes. This guide provides a comprehensive overview of BAS lodgement, including what BAS is, how to lodge it, and the available options for lodging your BAS.
What Your BAS Is and When It’s Required
If you are a business registered for GST in Australia, you need to lodge a BAS. Your BAS helps you report and pay your GST, PAYG installments, PAYG withholding tax, and other taxes. When you register for an Australian business number (ABN) and GST, the ATO will automatically send you a BAS when it’s time to lodge.
BAS is typically required to be lodged:
- Monthly: If your GST turnover is $20 million or more.
- Quarterly: If your GST turnover is less than $20 million.
- Annually: If you are voluntarily registered for GST and have a turnover of less than $75,000 ($150,000 for non-profit organizations).
Overview of Lodging and Paying
- Lodge Online: Most businesses lodge their BAS online. This method is quick, easy, secure, and offers additional benefits like a two-week deferral offer and faster refunds.
- Lodge through a Tax or BAS Agent: Registered agents can lodge, vary, and pay on your behalf through their preferred electronic channel. Note: If you lodge through a registered tax or BAS agent, you may be eligible for a lodgment extension, providing you with more time to prepare and submit your BAS.
- Lodge by Mail: You can mail your original, completed BAS using the pre-addressed envelope provided in your BAS package.
- Nothing to Report (‘nil’ BAS): If you have nothing to report for the period, you can lodge your BAS as ‘nil’ online or by phone.
Where’s My BAS?
How you lodge your BAS determines how you receive statements. If you lodge online, your next statement will be available electronically. The ATO will notify you by email 21 days before the due date when your BAS is available.
Lodging your BAS is a crucial part of managing your business’s taxes in Australia. Understanding the different options and choosing the one that best suits your needs ensures that you comply with all legal requirements. Whether you choose to lodge online, through an agent, or by mail, the process is designed to be accessible and convenient for all businesses.
Penalties for Late Lodgement
Lodging your BAS on time is not only a legal requirement but also essential to avoid penalties. The ATO may impose penalties for late lodgement, known as the “Failure to Lodge on Time” (FTL) penalty. The penalty amount can vary based on the size of the entity and the period of delay.
- Small Entities: A penalty unit for each 28-day period or part thereof that the document is overdue, up to a maximum of five penalty units.
- Medium Entities: Two penalty units for each 28-day period or part thereof, up to a maximum of ten penalty units.
- Large Entities: Five penalty units for each 28-day period or part thereof, up to a maximum of 25 penalty units.
It’s essential to communicate with the ATO if you are experiencing difficulties in lodging on time, as they may provide assistance or extensions in certain circumstances.
Value of Penalty units :
Link – https://www.ato.gov.au/General/Interest-and-penalties/Penalties/Penalty-units/
How to Correct Mistakes
Mistakes can happen, and the ATO provides options to correct errors in a previously lodged BAS. The method to correct a mistake depends on the nature and size of the error:
- Small Errors: If the mistake results in a shortfall of less than $10,000, you may correct it in your next BAS.
- Large Errors: For errors resulting in a shortfall of $10,000 or more, you may need to revise the original BAS or notify the ATO.
It’s advisable to consult with a tax or BAS agent or refer to the ATO’s specific guidelines on correcting mistakes to ensure that you follow the correct procedure.
- Understanding BAS: BAS is essential for reporting and paying various taxes, including GST and PAYG.
- Lodging Options: You can lodge your BAS online, through an agent, by mail, or report a ‘nil’ BAS if applicable.
- Timely Compliance: Even if you can’t pay by the due date, lodging your BAS on time is vital.
The information provided in this guide is intended for general informational purposes only and does not constitute professional advice. Readers are encouraged to consult with a qualified professional to determine the most suitable approach for their specific situation.
If you are looking for professional accounting services for your business. Contact us today!