Business Activity Statements
All about that BAS, no trouble.
If you’re a business owner, chances are it feels as though reporting your Business Activity Statement (BAS) comes around all too often. The good news is that at Hatcher, our team can support your ongoing business needs, including your tax reporting obligations.
What is a business Activity Statement?
A Business Activity Statement (BAS) is a type of tax reporting required by the ATO. Simply put, BAS is a form that eligible businesses should complete between one and twelve times each year, depending on turnover. (But more on that later!)
Your BAS will report on key financial information for the applicable period, including how much GST your business collected on sales, and how much was paid on purchases. Regular BAS reporting enables your business to pay:
- Goods and services tax (GST)
- Pay as you go installments (PAYG)
- PAYG withholding tax
- Other applicable taxes
Who should submit a business activity statement?
In most cases, the ATO will prompt eligible businesses to complete their BAS. Your business is required to complete a BAS if both of the following conditions apply:
- You have a valid Australian Business Number (ABN).
- Your business is registered for GST.
In most cases, businesses registered for GST have surpassed the threshold of $75,000 in turnover per year. This is a milestone that many business owners recognise.
Just to keep you on your toes though – you may wish to voluntarily register for GST, even if your business hasn’t reached the $75,000 threshold. For example, if you’re regularly purchasing supplies and being charged GST on these items, it may make sense to voluntarily register for GST and claim a tax credit.
Even if the above conditions do not apply and you aren’t currently required to complete BAS, it’s worthwhile anticipating future tax obligations as your business grows. We can help with that.
When should I submit my business activity statement?
This is where things start to get a bit technical, but we’ve got you covered:
GST Collected
Businesses with an annual GST turnover of $20 million or more are required to complete their Business Activity Statements monthly. In contrast, most other businesses can complete their BAS on a quarterly basis. Regularly taking stock of the GST your business collects helps to keep your financial records in order and up-to-date.
PAYG Instalments
Your PAYG instalments are calculated by the ATO based on your most recently lodged tax return. The ATO looks at your business, distribution, or investment income to forecast the payment required. In short, PAYG installments are designed as a prepayment of your income tax. The idea is that by making regular PAYG installments, you won’t experience ‘bill shock’ when you lodge your tax return and owe the ATO.
PAYG Withholding Tax
As your team grows, you must register for PAYG withholding tax on behalf of your employees. By making payments throughout the year, this helps your employees from acquiring a large tax bill by the end of the year.
Other Taxes
Your BAS may demonstrate a need to pay other taxes that are relevant to your business dealings. Some examples may include the Fringe Benefits Tax (FBT), Luxury Car Tax (LCT), Wine Equalisation Tax (WET), or Fuel Tax Credit (FTC).
BAS Due Dates to Note in your Calendar
Businesses that submit BAS on a quarterly basis should do so by the 28th of every month. The one exception to this rule is Quarter 2, which takes place over the Christmas and New Year period. Around this time, BAS is due February 28th of the new calendar year.
The good news is that businesses working with an accountant or tax agent also receive extra time in which to submit their BAS. We recommend adding the following due dates into your calendar as a reminder:
| Quarterly lodgment obligation | Original due date | Lodgment program – lodgment and payment due date |
|---|---|---|
| Quarter 4, 2020–21 | 28 July 2021 | 25 August 2021 |
| Quarter 1, 2021-22 | 28 October 2021 | 25 November 2021 |
| Quarter 2, 2021-22 | 28 February 2022 | Not applicable |
| Quarter 3, 2021-22 | 28 April 2022 | 26 May 2022 |
| Quarter 4, 2021-22 | 28 July 2022 | 25 August 2022 To be confirmed when the Lodgment program 2022–23 is developed. |
FAQs
An IAS is very similar to a BAS, and both reports are generally issued quarterly. However, an IAS report is typically simpler as it only takes into consideration your PAYG installments and PAYG withholding taxes. In most cases, an IAS is used by businesses that are not registered for GST.
Businesses that are withholding more than $25,000 but less than $1 million are required to report PAYG withholding on a monthly basis. Similarly, businesses or individuals with business or investment income of $100 million or more are required to pay PAYG instalments monthly.
If the above requirements do not apply to you, but your PAYG withholding cycle is monthly, then a monthly IAS will be issued to you or your business. Ask our team of experts for more details!
Yes! Pop a repeat event series into your calendar, because monthly IAS reports are normally on the 21st of every month. There is no flexibility in due dates, even if you have an accountant or tax agent to assist your business. If you’d like further details, contact the team at Hatcher today.
Disclaimer: Hatcher Advisory and its subsidiaries, together with its owners, managers and employees have endeavoured to ensure the information on this website is accurate. However, you must undertake your own research and seek advice from your financial advisor, broker or accountant to ascertain its application to your specific circumstances. We do not take responsibility for any outcomes based on this material.