All You Need to Know about Business Activity Statement

  • Each business in Australia is required to have a business activity statement, which is a required element for reporting and taxation.
  • To get a business activity statement business owners must go to the Australian Taxation Office either once a month or once in four months. 
  • If you want to learn more about the details and regulations regarding business activity statement, then this article is for you. 

business activity statement

The business activity statement (BAS) is a tax reporting requirement for businesses issued by the Australian Taxation Office (ATO) on either a monthly or quarterly basis. It’s used for reporting and paying goods and services tax (GST), pay as you go (PAYG) installments, PAYG withholding tax and other tax obligations such as FBT installments, Luxury Car Tax, Wine Equalisation Tax and Fuel Tax Credits.

When you register for GST and an Australian business number (ABN), the ATO will automatically send you a business activity statement when it’s time to lodge.

Common acronyms found on the BAS

  • ATO = Australian Taxation Office
  • BAS = Business Activity Statement
  • GST = Goods and Services Tax
  • PAYGW = Pay as you go Withholding
  • FBT = Fringe Benefits Tax
  • LCT = Luxury Car Tax
  • WET = Wine Equalisation Tax
  • FTC = Fuel Tax Credits
  • GST Registration

As a business owner, you are responsible for ensuring you meet all your business’s GST obligations. A business is required to register for GST if it has an annual GST turnover of $75,000 or more a year, or if they think they will reach this annual threshold.

Once your business is registered for GST, you must include GST in the sale price of your goods. But there are some exceptions. Some goods are GST-free including most of the basic foods like bread and milk, some education courses, and some medical products and services. If your business falls into any of these categories, it’s best to speak to your accountant for a clear strategy on handling such items.

Preparing your Business Activity Statement

GST

All businesses registered for GST use the business activity statement to complete their GST returns. Your reporting and payment period is shown on your business activity statement and will be monthly, quarterly or annually.

Accrual vs Non-Accrual (cash)

When you register for GST you need to select whether you will report on an accruals basis or a cash basis. Accruals basis means that you will be reporting your GST when you prepare your sales invoice or receive your expense invoice, regardless of whether you have actually received, or made, a payment for the invoice.

Non-Accrual or cash basis means that you report your GST based on when cash is received or paid out, regardless of when the transaction occurred.

Option 1: Calculate and report GST quarterly

Available to all quarterly businesses. Calculate and report all the GST labels in your business activity statement and pay your actual GST amounts quarterly.

Option 2: Calculate GST quarterly and report annually

Available to all businesses with a turnover of less than $20 million. Calculate and pay your actual GST amounts quarterly but report only the GST collected and paid and total sales for each quarter.

Option 3: Pay GST installment amount and report annually

Available to all businesses with a turnover of $2 million or less, which allows you to pay an ATO determined GST installment amount quarterly.

For GST reporting options 2 and 3, an annual GST reconciliation is required to be completed and lodged with the ATO.

Pay as you go (PAYG) income tax installment

PAYG installments require you to pay incremental amounts towards your expected end of year income tax liability. To make sure your income tax assessment takes into account the installments you've paid through the year, you need to finalise your PAYG installments before you lodge your income tax return.

Generally, you can choose between two options for calculating and paying your PAYG installments, which will apply for the remainder of the income year:

Option 1: Installment amount

A pre-determined amount calculated by the ATO.

Option 2: Installment rate

Calculate your PAYG installment amount based on your actual income multiplied by a rate that the ATO provides. Great for seasonal businesses where income can fluctuate.

If you aren’t registered for any of the other items on a business activity statement (such as GST or PAYGW), but you are required to pay a tax installment, then the ATO will send you an installment activity statement (IAS) rather than a business activity statement (BAS). If you don't want to vary the installment amount shown on your installment notice, you only need to pay the amount shown by the due date and you don't need to lodge the notice.

Pay as you go (PAYG) tax withheld

Under PAYG withholding, businesses must withhold tax from certain payments made to others, which is then paid to the ATO. These include:

  • payments to employees, company directors and office holders
  • payments to workers under a labour-hire agreements
  • payments under voluntary agreements
  • payments where an Australian business number (ABN) has not been quoted in relation to a supply

You must report any withheld amounts in the PAYG tax withheld section of your business activity statement (BAS).

Fringe benefits tax (FBT) installment

Fringe benefits tax (FBT) is a tax that employers pay on certain benefits they provide to their employees. The benefits may be in addition to, or part of, their salary or wages package. FBT is separate from income tax. If you are required to pay FBT, then FBT installments (a pre-determined amount calculated by the ATO) are payable as part of your business activity statement. 

Luxury car tax (LCT)

Luxury car tax (LCT) applies to all supplies and importations of luxury cars where the value (including GST) exceeds the LCT threshold. The value generally also includes the price paid for accessories and modifications made to the car before delivery.

LCT Thresholds


Financial year

Fuel efficient vehicles

Other vehicles
2014–15

$75,375

$61,884

2013–14

$75,375

$60,316

2012–13

$75,375

$59,133

2011–12

$75,375

$57,466

2010–11

$75,375

$57,466

2009–10

$75,000

$57,180

Wine equalisation tax (WET)

Wine equalisation tax (WET) only applies to wine manufacturers, wholesalers, and importers. Retailers do not have a WET liability unless they make wholesale sales or bottle their own wine.

WET is a tax based on the value of wine. WET applies at 29% of the value of the wine at the last wholesale sale (before adding GST).

Fuel tax credits (FTC)

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. You must be registered with the ATO for GST and Fuel Tax Credits to make a claim.

How to lodge your business activity statement

If you are registered online via the Business Portal you can access and submit your business activity statement online. If you are not registered, your business activity statement will be sent to you in the mail and you lodge it via post. You can also submit your business activity statement through a registered tax agent or BAS agent.

Due Dates

Business activity statement is issued by the ATO approximately two weeks before the end of a business’s reporting period. Once you receive your business activity statement, fill it out, lodge it with the ATO and pay any money you owe by the due date.

Monthly reporting

The due date for your monthly business activity statement is usually on the 21st day of the following month. If the due date is on a weekend or public holiday, you can lodge your form and make any payment due on the next business day.

Quarterly reporting


Quarter

Due date - paper

Due date - online
1 - July, August and September 28 October 11 November
2 - October, November and December 28 February 28 February
3 - January, February and March 28 April 12 May
4 - April, May and June 28 July 11 August

 

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Craig Pisani

Craig Pisani

Director at 542 Partners

Craig Pisani is a Chartered Accountant and the Director of 542 Partners. Craig recognises how effective businesses operate and advises on all areas of accounting and taxation, including acquisitions and sales, start-ups, tax-effective group structuring and business systems reviews. While Craig’s expertise is in accounting and taxation compliance, his advisory skills extend to superannuation, business succession planning and personal wealth creation.


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