How to Prepare and Lodge a BAS Statement

A Business Activity Statement (BAS) reports various tax obligations to the Australian Taxation Office (ATO). Businesses registered for Goods and Services Tax (GST) must lodge a BAS. This statement simplifies tax compliance by allowing businesses to report and pay multiple taxes through a single form. It helps the ATO assess the tax owed or any refund due.

Identifying Your BAS Reporting Requirements

Businesses must understand their tax obligations to determine what information to report on a BAS. The BAS can encompass several types of taxes; knowing which are relevant is the first step.

Goods and Services Tax (GST)

Goods and Services Tax (GST) is a 10% tax applied to most goods, services, and other items sold or consumed in Australia. Businesses collect GST on their sales (GST collected) and can claim credits for the GST paid on their business-related purchases and imports (GST paid or input tax credits). The net difference between GST collected and GST paid is either remitted to the ATO or claimed as a refund.

Businesses choose between two accounting methods for GST: cash or accrual. The cash method accounts for GST when money is received or paid, available to businesses with aggregated turnover under $10 million. The accrual method accounts for GST when an invoice is issued or received. GST reporting frequency depends on turnover; most small businesses report quarterly, larger businesses ($20 million+) monthly. Businesses voluntarily registered for GST with turnover under $75,000 may report annually.

Pay As You Go (PAYG) Withholding

PAYG Withholding is where employers withhold tax from payments to employees, certain contractors, and other payees. This withheld tax is remitted to the ATO on behalf of payees, contributing to their annual income tax liability. Businesses calculate withholding based on factors like employee tax file number and tax-free threshold claims.

Employers must register for PAYG Withholding before making any payments subject to withholding. This applies to wages, salaries, allowances, and payments to contractors who have agreed to have tax withheld or haven’t provided an ABN. The withheld amounts are reported through the BAS.

Pay As You Go (PAYG) Income Tax Instalment

PAYG Income Tax Instalment helps businesses and individuals manage annual income tax liability through regular prepayments. The ATO calculates instalments based on a taxpayer’s most recent tax return, paid quarterly.

These instalments are credited against the final income tax liability when the annual income tax return is lodged. If a business anticipates a change in income, they can vary their instalment amount to avoid penalties.

Fringe Benefits Tax (FBT) Instalment

Fringe Benefits Tax (FBT) is a tax employers pay on non-cash benefits provided to employees or their associates. If a business’s FBT liability was $3,000+ in the previous year, quarterly FBT instalments are required via BAS.

The ATO may pre-fill the FBT instalment amount on the BAS, but businesses can vary it if their expected FBT liability changes. This ensures payments align with the tax owed.

Wine Equalisation Tax (WET) and Luxury Car Tax (LCT)

Wine Equalisation Tax (WET) is a tax on wine, paid by producers, wholesalers, or importers. Luxury Car Tax (LCT) applies to cars above a GST-inclusive threshold, paid by businesses selling or importing luxury cars. These taxes are reported on the BAS for businesses dealing in these goods.

The LCT rate is 33% on the portion of the car’s value exceeding the threshold, which for 2024 is $80,567, or $91,387 for fuel-efficient vehicles. Businesses registered for GST and LCT report and remit LCT through their BAS.

Collecting Necessary Financial Information

Gathering financial data is necessary to prepare a correct BAS. Maintain records for all business transactions throughout the reporting period. Accounting software or spreadsheets can streamline data collection.

For GST, keep records of sales invoices, purchase invoices, and expense receipts. Documents must show the GST component; differentiate between GST-free, input-taxed, or GST-subject sales and purchases. Bank statements are important for reconciling transactions, especially for cash accounting GST businesses.

For PAYG Withholding, payroll records are necessary. This includes employee wages, salaries, allowances, and tax withheld. Employee Tax File Declarations provide details like TFN and tax-free threshold claims, important for calculating correct withholding.

For PAYG Income Tax Instalment, the ATO pre-fills the amount, but businesses should have profit and loss statements and financial records available. This allows review and adjustment if current income or financial situation differs from the previous year. For FBT, WET, and LCT, businesses must maintain records related to fringe benefits, wine sales, or luxury car sales and imports. These records form the basis for calculating amounts reported on the BAS.

Filling Out the BAS Statement

Completing the BAS involves transferring calculated figures to the correct labels. Whether using paper or software, understanding each label’s purpose is important for correct reporting. The BAS is structured with labels for different tax components.

For GST, G1 represents total sales (including GST); G2 and G3 are for export and GST-free sales. G10 covers capital purchases, G11 non-capital purchases, both GST-inclusive. GST collected on sales is entered at 1A; GST paid on purchases at 1B. Net GST payable or refundable is calculated by subtracting 1B from 1A.

For PAYG Withholding, W1 is total gross wages and salaries paid; W2 captures total tax withheld. PAYG Income Tax Instalment (pre-filled or calculated) is reported at T1. If applicable, FBT instalment amounts are at F1; WET and LCT figures at labels like 1E for LCT payable.

Completing the form involves entering figures from financial records. After all sections are completed, the form indicates if payment is due to the ATO or a refund is expected. This calculation determines the business’s tax position for the reporting period.

Submitting Your BAS

Once the BAS is prepared, businesses have several lodgement and payment methods. The most suitable method depends on business size and preferences. The ATO encourages electronic lodgement for efficiency and potential extended deadlines.

Lodgement is common online via ATO’s Online Services for Business, a platform for managing tax affairs. Sole traders can use their myGov account linked to the ATO. Many accounting software programs offer integrated features for direct BAS lodgement with the ATO, streamlining the process. Businesses can engage a registered tax or BAS agent to lodge on their behalf, often with additional time to lodge and pay. Lodging a paper BAS form by mail remains an option, though less common.

If payment is due, options include BPAY, direct debit, or credit card (may incur fees). The ATO offers payment plans for businesses facing financial difficulties, allowing instalment payments. Businesses must adhere to lodgement and payment due dates, which vary by reporting cycle (monthly, quarterly, or annually). Quarterly BAS are due on the 28th of the month following the quarter’s end; monthly BAS on the 21st of the following month. After lodgement, keep copies of the submitted BAS and supporting documentation for records.