Your BAS, or Business Activity Statement, is a necessary requirement for businesses registered for GST (Goods and Services Tax) in Australia. It is a form that enables you to report and submit payments for various taxes.
With the BAS, you can report and pay:
- Goods and Services Tax (GST): This is a tax applied to most goods and services provided in Australia.
- Pay As You Go (PAYG) Instalments: These are periodic payments made towards income tax to avoid a large lump sum at the end of the financial year.
- PAYG Withholding Tax: This is the tax withheld from employees’ wages to meet their income tax obligations.
Additionally, the BAS might include other relevant taxes applicable to your business.
When you register for an ABN and GST in Australia, the ATO will handle the process of sending you the BAS when the time comes for you to lodge your tax returns and make the necessary payments.
In this article
- How to Lodge and Pay Your BAS
- How You Lodge Affects How You Receive Statements
- Deadlines for Lodging and Paying Your BAS in Australia
- Reporting and Payment Due Dates for BAS
- How to Make Payments for Your BAS
- Expecting a Refund for Your Business Activity Statement?
- Essential Tips for BAS Record Keeping
- Tips for Completing Your BAS
- Addressing BAS Mistakes and Making Adjustments
- How to Correct Mistakes in Your BAS
- Getting Assistance: Challenges with Lodgment and Payment
How to Lodge and Pay Your BAS
As a business registered for GST (Goods and Services Tax), it is important to properly lodge your Business Activity Statement (BAS) and report your GST, PAYG instalments, PAYG withholding tax, and other applicable taxes to the authorities.
Regardless of your ability to make the payment by the due date, it is essential to lodge your BAS on time. This not only provides clarity about your standing with the ATO but also demonstrates your awareness of your obligations and your commitment to fulfilling them.
You have various options available for lodging your BAS and reporting taxes:
1. Lodge Online
The most common method for businesses to prepare and submit their own BAS is through online lodgment.
This approach offers several benefits:
- Convenience: You can lodge your BAS at a time that suits your schedule.
- Two-Week Deferral Offer: By lodging electronically, you may be eligible for an additional two weeks to submit and pay your BAS.
- Faster Refunds: Online lodgment may expedite the process of receiving any refunds owed to you.
- Error Avoidance: Online platforms often provide assistance in avoiding common mistakes.
- Review and Verification: Before finalizing the lodgment, you can review your BAS to ensure that the calculated amount aligns with your expectations for payment or refund.
2. Lodge through a Tax or BAS Agent
Using the services of a registered tax or BAS agent can be beneficial when it comes to lodging your tax returns. These agents can handle the lodgment, make changes if needed, and process payments on your behalf using their preferred electronic platform.
Even if you have appointed an agent to manage your tax affairs, you will still have the ability to access your Business Activity Statement (BAS) through Online Services for Business or myGov. This way, you can stay informed about your tax obligations, even when your agent is taking care of the necessary tasks.
If you require assistance in finding a registered agent, you can make use of the provided resources to locate one who meets your requirements.
How You Lodge Affects How You Receive Statements
The method of lodgment also determines how you receive your statements. For instance, if you lodge through Online Services for Business, your subsequent statement will be made available there.
If you use the ATO’s online services, you’ll receive an email notification 21 days before the BAS due date, informing you when your BAS is ready. To ensure you receive such notifications, ensure that your contact details are kept up to date.
Electronic Lodgment and Future BAS Issuance
If you choose to lodge your BAS electronically, it will initiate a change in how future BAS statements are issued to you. Once you’ve successfully lodged online, your BAS statements will be sent to you electronically.
Deadlines for Lodging and Paying Your BAS in Australia
The due date for lodging and paying your Business Activity Statement (BAS) can be found on the statement itself. If the due date falls on a weekend or a public holiday, you are granted until the following business day to complete the lodgment and payment.
The frequency of your GST reporting and payment cycle depends on your GST turnover and is classified as follows:
- Quarterly: If your GST turnover is less than $20 million and you have not been instructed to report monthly, you will be on a quarterly reporting and payment cycle.
- Monthly: If your GST turnover is $20 million or more, you are required to report and make payments on a monthly basis.
- Annually: If you chose to register for GST on a voluntary basis and your GST turnover stays below $75,000 (or $150,000 for not-for-profit organizations), your reporting and payment schedule will be on an annual basis. This means that instead of regular reporting and payments, you will only need to fulfill your GST obligations once a year.
You have the option to seek help from a registered tax or BAS agent who can assist you in lodging your activity statements.
In the event of a natural disaster or exceptional circumstances, the due date for lodgment and payment may be adjusted, taking into account the specific situation.
It is essential to adhere to the given due dates for lodgment and payment to ensure compliance with tax regulations and avoid any potential penalties or issues with the ATO.
Reporting and Payment Due Dates for BAS
If you choose to lodge your BAS online, you might receive an additional two weeks to complete the lodgment and payment for your quarterly BAS.
Here are the due dates for each quarter:
|July, August, September||28 October|
|January, February, March||28 April|
|April, May, June||28 July|
Also, note that for the second quarter, there is no extension beyond the specified due date since it already includes a one-month extension.
If a business has a Goods and Services Tax (GST) turnover of $20 million or above, they are obligated to report and make payments on a monthly basis.
The deadline for lodging and paying the monthly Business Activity Statement (BAS) is the 21st day of the month that follows the end of the taxable period. For example, if the BAS covers transactions made in July, it must be lodged and paid by 21st August.
However, schools and associated bodies receive an automatic deferral for their December activity statement, allowing them to submit it later by 21st February. This deferral gives them additional time to fulfill their GST reporting and payment requirements.
For those on an annual reporting cycle, the due date to lodge and pay your annual GST return is 31 October.
However, if you are not obligated to lodge a tax return, the due date for the annual GST return is 28 February following the annual tax period.
Keep in mind that if you use a registered tax or BAS agent to manage your tax affairs, different dates may apply based on your agent’s arrangements and agreements.
Adjusting Your Reporting and Payment Cycle for BAS
If your business circumstances change and you wish to adjust the frequency of your BAS lodgment and payment, you have the option to do so.
If you want to make the change early in the lodgment period, such as during the first month of the quarter or at the beginning of the financial year, you can typically start the new cycle immediately.
However, if you decide to make the change later in the lodgment period, the new reporting and payment cycle will be implemented from the start of the next quarter or year.
How to Make Payments for Your BAS
Paying your BAS is a straightforward process, and you have several convenient options to choose from:
- BPAY, Credit Card, or Debit Card: The quickest and easiest way to pay your BAS is through BPAY, using a credit card or debit card. This method offers a fast and secure way to make your payment.
- Payment Reference Number (PRN): If you choose to lodge your BAS online, you can use a Payment Reference Number (PRN) as a unique identifier for your payment. The PRN ensures that your payment is correctly credited to your account.
- Early Payments to Offset Future BAS: You have the option to make early payments voluntarily, which can help offset your future BAS liabilities. To do this, use your PRN and any of the available payment methods.
Understanding Payment Reference Number (PRN)
A Payment Reference Number (PRN) serves as a specific code linked to your payment, ensuring it is accurately allocated to your account. It is sometimes referred to as an EFT (Electronic Funds Transfer) code.
Please note that different types of PRNs exist based on the type of tax you are paying. For instance, the PRN for income tax will differ from the one used for activity statements like BAS.
By making timely payments for your BAS, you can avoid incurring any interest charges and stay compliant with your tax obligations.
Additionally, utilizing the PRN correctly will help streamline the payment process and ensure your payments are appropriately recorded.
Expecting a Refund for Your Business Activity Statement?
If you have an Australian Business Number (ABN), any refunds owed to you will be directly deposited into your nominated financial institution account.
To receive the refund, the account must generally be held at an Australian branch and under one of the following categories:
- Your company, business, or trading name. This account can also be jointly held with another business or individual.
- Held by a registered tax agent on your behalf.
Some financial institutions offer real-time payment services using Osko or PayID, which can speed up the refund process.
Essential Tips for BAS Record Keeping
Maintaining accurate and organized records is important for effectively managing your business. Here are some key tips to remember:
- Comprehensive Record-keeping: Ensure you keep detailed records of all sales, fees, expenses, wages, and other business costs. Having a clear record of your financial transactions helps you monitor and manage your business efficiently.
- Substantiate Claims: Keep appropriate records, such as stocktake records and logbooks, to support motor vehicle claims. This documentation will be essential for validating deductions and compliance with tax regulations.
- Reconcile Sales and Bank Statements: Regularly reconcile your sales with bank statements to ensure accuracy and identify any discrepancies.
- Use Correct GST Accounting Method: Select and apply the appropriate GST accounting method that aligns with your business operations. This is essential for accurate GST reporting.
- Retain GST Records: Keep all tax invoices and other GST-related records for a minimum of five years. This is a legal requirement and helps in case of audits or queries from the ATO.
Tips for Completing Your BAS
- Round Whole Dollar Amounts: When filling out your BAS, enter whole dollar amounts and exclude cents. Avoid rounding up to the next dollar.
- Single Entry for Invoices: Enter each invoice only once to prevent double-counting or errors in reporting.
- Match Expenses and Sales to Payment Period: If you account for GST on a cash basis, ensure that your expenses and sales fall within the specific payment period when you made or received payment.
- Complete Relevant Fields: Fill in only the fields that apply to your business. If you have no transactions to report for a particular section, enter zero.
- Accuracy in Manual Entry: If you are completing your BAS manually, double-check your figures and calculations to avoid mistakes.
- Corrections: Remember that if you make an error on a previous BAS, you can always correct it on a subsequent BAS.
By adhering to these record-keeping and BAS completion tips, you can effectively manage your business finances, meet your tax obligations, and ensure smooth operations.
Addressing BAS Mistakes and Making Adjustments
If you encounter errors in a previously lodged Business Activity Statement (BAS) or need to make adjustments due to changes in reported sales or purchases, follow the appropriate procedures outlined below:
Distinguishing Mistakes and Adjustments
- Mistakes or Errors: An error refers to an amount that was incorrect at the time of lodgment. This means that you reported inaccurate information in your original BAS.
- Adjustments: On the other hand, an adjustment pertains to a sale or purchase that was accurately reported in your original BAS. However, circumstances later arose that altered the reported GST amount.
When to Rectify a Mistake
Examples of mistakes that may require rectification in a previously lodged BAS include:
- Clerical or Transposition Errors: These are typographical errors or mistakes in copying numbers from one place to another.
- Incorrect GST Classification: If you classified a GST free sale or purchase as taxable or vice versa, this would be considered a mistake.
- Double Counting: If you accidentally counted some of your purchases twice in the original BAS, this is a mistake that needs to be addressed.
How to Correct Mistakes in Your BAS
If you identify a mistake in your Business Activity Statement (BAS), you have two options to rectify it, depending on whether it’s a credit error or a debit error. Here’s what you need to know:
1. Credit Errors and Debit Errors
- Credit Error: If the mistake relates to GST and fuel tax credits, you can often correct it in your next BAS. Include the necessary adjustments in the subsequent BAS to account for the error.
- Debit Error: If you can’t correct the mistake in the next BAS, you will need to lodge a revision to your original BAS to rectify the error.
2. Corrections Impacting PAYG Withholding:
As an employer, if you need to fix your Single Touch Payroll (STP) reporting, you may realize that the PAYG withholding amount reported for a previous tax period was incorrect (either too high or too low).
To rectify this, you have two options:
- Make corrections to a previous activity statement for the appropriate tax period to reflect the accurate PAYG withholding amount.
- For large withholders, follow the existing process to notify the ATO of changes to your PAYG withholding liability for an earlier tax period.
- Alternatively, you can carry forward the correction to your reported PAYG withholding for the current tax period, subject to certain limits.
When to Make an Adjustment
Whenever you become aware of the need for an adjustment, you should report it in the activity statement for your current reporting period.
Examples of scenarios that require adjustments include changes in the price of a sale or purchase or when goods are returned, leading to the cancellation of a sale.
Getting Assistance: Challenges with Lodgment and Payment
If you are experiencing difficulties in lodging or paying your taxes on time, don’t hesitate to seek help. Contact the ATO or a registered tax agent or BAS agent before the due date, and they will collaborate with you to find a suitable solution.
Remember, it remains your responsibility to meet your tax obligations, even if you have a tax agent or BAS agent.
Timely lodgment is important as it ensures that your information is current, providing clarity on the amount you need to pay.
The ATO aims to understand your unique circumstances and tailor their approach accordingly. Contact them to discuss your situation, and they’ll work with you to provide appropriate assistance.
Failing to lodge on time may result in penalties. Hence, it’s essential to lodge on time or communicate with the ATO to explore support options.
Considering a Payment Plan? You Can Get Help
If you find it challenging to pay by the due date, you may be eligible for a payment plan.
You can use the ATO’s online payment plan estimator to determine a plan that suits your financial capacity. It can also help you understand the time needed to clear your tax debt and the associated interest charges (General Interest Charge or GIC).
Once you have assessed a suitable payment scenario based on your circumstances, you can use it as a guide to set up a payment plan that aligns with your needs.
This article is for general information only. It does not make recommendations nor does it provide advice to address your personal circumstances. To make an informed decision, always contact a registered tax professional.