What is BAS returns? How To Lodge One?
BAS is a thing of importance for both established small business owners and budding business entrepreneurs. If you are concerned about how much tax your business needs to pay, we provide a guide to you that will solve all your queries and doubts.
Here we answer the questions:
- What is BAS?
- Who needs to register for BAS?
- How to lodge BAS?
- Essential details regarding lodging BAS
Table of Contents
Every year, many entrepreneurs start their businesses. As the first business, the owners require a lot of learning. One of the essential things to know and understand is BAS.
What Is BAS?
BAS stands for Business Activity Statement. It is a document that the business owners need to submit to ATO to report their tax obligations such as GST, PAYGW, PAYGI, FBT, etc.
Here are some of the essential things to know about BAS:
- After the Goods and Services Tax or GST, you need to lodge a BAS.
- You need to submit GST only when you generate at least $75,000 or more as gross income.
- When you reach the minimum turnover, it becomes a legal obligation to register for the same within 21 days.
Do You Need To Lodge A BAS?
If you want to know whether you need to lodge BAS or not, then you will have to wait for the ATO or Australian Taxation Office to inform you. As you register for an Australian Business Number or ABN and GST, it becomes ATO’s responsibility to indicate whether you need to lodge BAS.
Do Small Businesses Get Tax Benefits?
It may surprise you to know that small businesses often have an immense tax advantage compared to bigger companies.
Small businesses take advantage of tax credits and deductions such as low educational costs, travel expenses, repairs as support. What you need to do is, ensure to maintain a proper financial statement as a proof to confirm that these are your business expenses.
Main Tax Benefits Include:
1. Work from home:
If you have an office at your home, it is a lucrative option. If you run business operations from your home, you can deduct utility costs such as electricity, water, mobile, internet bills, etc.
2. Transportation Cost:
Many small businesses need a car for product transport or self-business visits, visit clients. As per rules, operating a business car is tax-deductible. Keep clean records, including imperative details such as the distance traveled to client sites and more. Check the mileage rates by logging on ATO website.
Claimable Business Equipment
You can also claim GST on specific products used in running the business. The list includes the following:
Consultancy Services:
If you are using the consultancy services like promotion, marketing, advertising, bookkeepers, accounting services, and many more such services, then you can claim these too.
Work Equipment:
The business hardly runs without computers, internet, printers, security, software programs, home office expenses, stationery, etc. These are the most claimed items.
Assets:
An asset includes the physical or intellectual item belonging to the company.
Business Uniform:
Many businesses use uniforms, protective clothing, outdoor gear, etc., as claimable items.
Training And Education:
Educational and technical qualifications are also included in the list.
Bills:
The utility bills such as phone, internet, electricity, water, and the fee such as bank, insurance premiums, legal fees, rent, etc. are also included
Travel:
As stated earlier, most business uses vehicle like cars, etc. The list also includes other business travel expenses such as flights, hotels, parking slips, and more.
Staff Payment:
The expenses like employee salaries, wages, bonuses, allowances, contributions for employees, labor costs, and more are also included.
How To Lodge Bas?
You will be glad to know that lodging BAS is easy. Here is what you need to know:
- You can lodge BAS online.
- Submit the statement by using your online accounting software.
- If you are a Sole Trader, use myGov account.
- Visit ATO’s online business portal.
- You can also take the help of a registered BAS agent.
Details Required
This is how you need to prepare and lodge a BAS with the ATO:
- Lodging your BAS becomes easy if you have the correct documentation of your business’ income, expenses, etc., of the past few months.
- Review your financial records. Ensure that all the bank statements are as per the information sent to the ATO. The statements may include details like purchases, expenses, outstanding funds, etc.
- Make sure to collect receipts and bills for all the business transactions in cash, too, irrespective of the size of your business.
- Use different bank accounts for private and business purposes.
- Have records of the collected GST on sales.
- Record the purchase statements.
- You must know that you don’t have to submit tax invoices while lodging your BAS, but you must keep it ready as the ATO may want it later.
- BAS may also need you to detail extra information related to your business, revenue, staff, etc.
- Once you complete the BAS, always keep the records updated.
- Mail a hard copy to the ATO or file BAS online using the ATO portal.
- You may also allow your tax agent to lodge it for you.
When To Lodge Tax?
Ensure to lodge your tax timely. Your business activity statement will help you know when and how to pay your tax. You will have time till the next business day to lodge. Set alerts on your phone so that you don’t miss the date.
As per the GST reporting and payment cycle,
- If the GST turnover is less than $20 million, it is quarterly.
- If the GST turnover is more than $20 million, it is monthly.
- If the GST turnover is less than $75,000 or $150,000 for non-profit bodies, it is annually.
The Last Words
Lodging your BAS is not tricky. You need to remain organized. In case of any help, seek the services of a registered BAS agent.
No Comment