How to Take the Sting Out of The Quarterly Payment
Starting a new year for your business shouldn’t be shrouded in the darkness that can be a looming BAS. But how can you be certain that your business is prepared?
A business activity statement (BAS) is a government form that all GST registered businesses must complete and lodge with the Australian Tax Office (ATO).
This can be done with the help of a registered Tax or BAS agent.
A BAS summarises all the GST you have paid against all the GST you have received during a specific period of time.
BAS’s may be lodged monthly, quarterly or annually.
When lodging your BAS, you need to include these payments/receipts within it:
Goods and services taxable payments (GST) – bills paid with GST included
Goods and Services taxable receipts (GST) – invoices raised with GST included
Pay as you go (PAYG) income tax instalment – where applicable
Pay as you go (PAYG) tax withheld – where applicable
Fringe benefits tax (FBT) instalment – where applicable
Luxury car tax (LCT) – where applicable
Wine equalisation tax (WET) – where applicable
Fuel tax credits – where applicable
The BAS needs to be lodged with the ATO and payment made by the due dates as follows:
For monthly BAS: within 21 days of the end of the month on the form
For quarterly BAS:
Quarter July – September: Due 28 October
Quarter October – December: Due 28 February
Quarter January – March: Due 28 April
Quarter April – June: Due 28 July
In some instances, you may be eligible to submit an Instalment Activity Statement (IAS).
In the IAS, the ATO tells you every quarter what your GST instalment amount is and where applicable your PAYG instalment amount.
Businesses that are not registered for GST and individuals who are required to pay PAYG instalments or PAYG withholding (such as self-funded retirees) use this form to pay PAYG.
IAS provides a little more flexibility in the arrangement as the instalments are advised by the ATO on what you need to pay to cover your liabilities.
You may vary those amounts if you feel that the instalments are too much or not enough to cover your tax liabilities. You may also be able to pay the amount in one lump sum at the end of the year.
Preparing for Your BAS
The information collected in your IAS and BAS can be used to assist in monitoring your business finances.
Daily tracking of your income and expenses assists in calculating your GST and other liabilities on your BAS, allowing you to ensure that there are no nasty surprises waiting for you.
Some tips on how you can prepare for your BAS or IAS each quarter
Keep everything up to date in your accounting software, be it Xero or otherwise, ensuring that all bank feeds are imported, allocated and reconciled.
If completing the BAS, yourself, ensure that the reports from your accounting software are printed off every week – this should give you an estimate of what you would have to pay, if your BAS was due right away.
Check that your bank account for your business has enough money in it to cover your BAS payment.
Create a profit and loss statement after printing your BAS reports to show you what profit or loss has been made in the week (or month) to date
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