How to Do a BAS Statement for Your Business

A Business Activity Statement (BAS) is a tax reporting form Australian businesses use to fulfill their tax obligations to the Australian Taxation Office (ATO). It consolidates various tax requirements into a single document, making it a central tool for businesses to report and pay taxes. Businesses registered for Goods and Services Tax (GST) are generally required to lodge a BAS regularly, either monthly, quarterly, or annually, depending on their turnover. Accurate and timely lodgment of the BAS is important for avoiding penalties and maintaining smooth business operations.

Key Components of a BAS Statement

A Business Activity Statement covers several types of tax obligations. The primary component for many businesses is the Goods and Services Tax (GST), a 10% tax applied to most goods and services sold in Australia. Businesses registered for GST collect this tax from customers and remit it to the ATO, while claiming credits for GST paid on business purchases. The difference between GST collected on sales and GST paid on purchases determines the net amount owed or refunded.

Pay As You Go (PAYG) Withholding is another component. If a business has employees, it must withhold tax from their wages and other payments, such as those to company directors or contractors who haven’t quoted an Australian Business Number (ABN). These withheld amounts are reported and paid to the ATO through the BAS.

Pay As You Go (PAYG) Instalments are prepayments of a business’s income tax, based on its expected annual income. This system spreads payments throughout the year. The ATO typically estimates these amounts, or businesses can vary them if their financial circumstances change.

A BAS can also include other specific tax obligations. These may include Luxury Car Tax (LCT), which applies to the sale or importation of luxury vehicles. Wine Equalisation Tax (WET) is reported by businesses involved in the wholesale sale of wine. Fuel Tax Credits (FTC) provide a credit for fuel tax included in the price of eligible fuels used in business activities. Businesses registered for GST and fuel tax credits can claim these credits through their BAS.

Gathering Required Information for Your BAS

Accurately completing a Business Activity Statement requires meticulous record-keeping. For Goods and Services Tax (GST) reporting, businesses need detailed records of all sales and purchases. This includes total sales, differentiating between those with GST, GST-free sales (like most basic food and medicines), and input-taxed sales. Businesses must also track total purchases, distinguishing between purchases with GST (for which credits can be claimed) and those without GST. Invoices, receipts, and accounting software reports are essential sources.

To report Pay As You Go (PAYG) Withholding, businesses must compile comprehensive payroll records. This involves noting total gross wages and other payments made to employees, company directors, and workers under labor-hire agreements for the reporting period. Businesses also need to record the total tax withheld from these payments, typically determined using ATO tax tables. Ensuring these figures align with payroll summaries is important for correct reporting.

For PAYG Instalments, the required information generally comes from the ATO. The ATO usually provides a pre-calculated instalment amount based on the business’s previous income tax returns. Businesses can vary this amount if their current financial circumstances indicate a significant change in expected income. This requires an updated estimate of the business’s annual income tax liability.

If a business is involved in activities subject to Luxury Car Tax (LCT) or Wine Equalisation Tax (WET), specific sales data must be recorded. For LCT, this means tracking sales of vehicles exceeding the luxury car tax threshold. For WET, it involves detailing wholesale wine sales.

Businesses claiming Fuel Tax Credits (FTC) need records of eligible fuel purchases, including fuel type, acquisition date, and specific activities for which it was used. The amount of credit depends on when the fuel was acquired, the fuel type, and the activity it was used in, requiring careful tracking of these details. Maintaining accurate records through accounting software, invoices, and bank statements is fundamental for preparing a BAS.

Completing and Submitting Your BAS

Completing a Business Activity Statement involves transferring compiled financial data into the relevant fields. Businesses can access and complete their BAS through online platforms, primarily the ATO’s Online services for business, or through their MyGov account if a sole trader. Accounting software that is Standard Business Reporting (SBR)-enabled also allows for direct lodgment, integrating the process with existing financial records.

When completing the BAS online, businesses navigate to the “Lodge activity statements” section within the ATO’s online portal. They select the appropriate BAS form for the reporting period. The system guides users through sections where they input figures for GST collected on sales (Label 1A), GST paid on purchases (Label 1B), and the resulting net GST payable or refundable.

For PAYG Withholding, businesses enter total gross wages paid to employees (W1) and total tax withheld (W2). Other labels are completed for PAYG Instalments and any other applicable taxes. A thorough review of the entered data is essential to ensure accuracy before submission.

Submission of the BAS can be done electronically through the ATO’s online services or SBR-enabled software. Once submitted online, a confirmation message with a receipt number is provided. Registered tax or BAS agents can also lodge statements on behalf of businesses.

Payment deadlines for the BAS typically align with lodgment deadlines. For quarterly reporters, due dates are generally the 28th of October, February, April, and July. Monthly reporters usually have a due date of the 21st day of the following month. If a due date falls on a weekend or public holiday, the deadline shifts to the next business day.

Payment methods include electronic transfer to the Reserve Bank of Australia, BPAY, direct debit from a bank account, or credit card payments, though credit card payments may incur fees. After lodging, businesses should keep records of the submitted BAS and payment confirmations for future reference and compliance. If a business anticipates difficulties in lodging or paying on time, contacting the ATO before the due date is advisable, as payment plans or extensions may be available.