- A Business Activity Statement (BAS) is a report that is submitted by a business to the Australian Taxation Office. The statement contains details about the various types of taxes that may need to be paid by a business.
- A BAS needs to be submitted to the ATO before the due date for final submission. There are financial penalties for not paying a BAS promptly.
- A BAS can be submitted online, by phone or by mail. Accounting software such as MYOB or Xero can assist in completing a statement more efficiently.
Business Activity Statement Requirements
A Business Activity Statement (BAS) is a tax reporting requirement by the Australian Taxation Office. It is issued by the ATO on a monthly or quarterly basis. It reports a business’ goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding tax and other tax obligations.
If your business has an ABN and is registered for GST, the ATO will automatically send you a BAS when it is time to lodge. The due date will depend on whether your business’ reporting is quarterly or monthly.
Goods and Services Tax (GST)
The Goods and Services Tax (GST) is a value-added tax of 10% on most goods and services. There are exemptions that apply to certain businesses. You can use your Business Activity Statement to report, record and pay the GST your business has collected and claim GST credits. For GST purposes, each BAS covers a ‘tax period’ (one or three months). However, the BAS form is used for all tax payments – (FBT, PAYG withholdings, etc.).
Pay As You Go (PAYG)
PAYG instalments require you to pay incremental amounts towards your expected end of year income tax liability. You can choose between an instalment amount or an instalment rate. PAYG instalments are generally sent by the ATO in the form of an instalment notice, rather than a BAS.
Fringe Benefits Tax (FBT)
Separate from income tax, fringe benefits tax (FBT) is a tax employers pay on certain benefits they provide to their employees, including their employees’ family or other associates.
Luxury Car Tax (LCT)
The luxury car tax (LCT) applies to all supplies and importations of luxury cars where the value (including GST) exceeds the LCT threshold. It is currently subject to a tax of 33% and applies to the portion of the car’s value that is above the threshold, not the total value of the car.
Wine Equalisation Tax (WET)
The WET only applies to wine manufacturers, wholesalers and importers, and is a tax based on the value of wine. It is currently levied at 29% of the taxable value of wine.
Fuel Tax Credits
Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) included in the price of fuel they use in machinery, plant equipment and heavy vehicles for business purposes.
- For those business owners who are registered for GST, you must lodge a BAS for each period, whether it is monthly, quarterly or annually.
- Lodging online is not only quicker, but also most quarterly lodgers receive an extra two weeks to lodge.
- To pay the total advised instalment amount, you need to transfer the total instalment amount to the amount paid section of the payment advice. If you think that using the amounts shown in the advised amount will result in you paying more (or less) than your expected tax liability for the year, you can vary it on the instalment notice.
Lodgment of BAS
A Business Activity Statement can be lodged online, by phone or mail. Most small businesses only have to file a BAS on a quarterly basis. The ATO will send your activity statement around a fortnight before the end of your reporting period.
BAS Monthly Reporting
A business is required to report GST monthly if:
- its annual turnover is more than $20 million
- it has elected to lodge monthly
- its income tax year does not end 30 June (other than charitable institutions)
A business is required to report PAYG monthly if:
- its withholding is more than $25,000 but less than $1 million
- its withholding is more than $1 million (fortnightly)
Businesses reporting PAYG monthly will only need to fill in the PAYG section in the BAS. This form is sent to you from the ATO.
BAS Quarterly Reporting
The information that must be reported quarterly on the BAS includes:
- GST – if annual turnover is less than $20 million and you do not elect to report monthly
- PAYG withholding – annual withholding less than $25,000
- PAYG instalments – always quarterly
- FBT instalments – always quarterly
If GST and PAYG withholding is reported monthly, the business receives a monthly activity statement at the end of each month.
At the end of each quarter, the business will receive a quarterly activity statement. The business will be required to report its quarterly PAYG instalment, deferred company or superannuation fund instalment and FBT instalment.
Frequently Asked Questions about Business Activity Statements
Q: When can GST credits be claimed?
A: GST credits can be claimed on any BAS from when the requirements are met. This means that GST credits not claimed, despite entitlements to do so, can be claimed on any future BAS, within the four-year time limit.
Q: What are the fines for paying a BAS late?
A: If you don’t submit your business activity statements on time you may fall subject to a failure to lodge (FTL) penalty. The fines can be higher if you’re often late in lodging your BAS. For every 28-day period (or part thereof) that you’re late in lodging, you can be charged $110; however, you cannot incur charges of more than $550
Q: Can a BAS be paid annually?
A: Pertaining to any applicable GST return, a request for an annual BAS payment is sent out after the fourth quarter and needs to be lodged by either 28th February or before your yearly income tax return is due, whichever comes first.
How can LegalVision help me?
LegalVision assists businesses and individuals with tailored online legal advice for a fixed-fee, including the various facets of operating a business. Call LegalVision today on 1300 544 755.