While talking about managing your business’s finances, there are very few tasks that are critical, and one of them is lodging your BAS (Business Activity Statement).
If your business has been running for a while and is also registered for GST (goods and services tax), it is mandatory that your lodge your BAS. In case you are not familiar with it, BAS is a form for business entities to report their tax obligations and is submitted to the Australian Taxation Office.
Business activity statements help in reporting and paying the following:
- pay-as-you-go (PAYG) instalments
- goods and services tax
- PAYG withholding tax
- other taxes
Once you register for an ABN (Australian Business Number) and GST, the Australian Taxation Office will automatically send you a BAS at the time of lodgement.
If you are absolutely new to BAS lodgement, you can use bookkeepers, accountants, tax or accounting software or the ATO’s website to prepare and submit it. Clear Tax Accountants is a team of senior bookkeepers and accountants who can make the process of lodging your BAS easy and stress-free for you.
If you are looking for ways to make the entire process of lodgment easier for yourself by knowing what you should and should not be doing, keep reading the following.
DO’s of BAS Lodgement
Keeping Accurate Records
Maintaining accurate records is essential when it comes to BAS lodgement. Ensure that all financial transactions, including income, expenses, and GST-related activities, are accurately recorded.
Proper record-keeping not only simplifies the lodgement process but also minimises the risk of errors.
Lodging Your BAS On Time
You must lodge your BAS on time. Missing deadlines can result not only in penalties but also in interest charges. Make it a priority to submit your BAS on time, whether you’re lodging quarterly or annually.
Cross-Checking Figures
Before submitting your BAS, carefully review all figures and calculations for accuracy. Minor errors can also lead to compliance issues and additional scrutiny from the ATO.
Seeking Professional Advice When Needed
If you’re unsure about any aspect of BAS lodgement, don’t hesitate to seek advice from a qualified accountant, BAS agent or registered tax agent. They can offer valuable insights and ensure compliance with ATO regulations.
Don’ts of BAS Lodgement
Ignoring GST Obligations:
Businesses must fulfil their GST obligations by reporting and paying GST on taxable sales and claiming input tax credits for GST paid on business expenses. Not doing this can result in penalties and fines.
Mixing Personal And Business Expenses
Businesses should keep personal and business expenses separate to report their financial transactions accurately on the BAS. Mixing personal and business expenses can result in inaccuracies and potential audit issues.
Relying Solely On Software
While accounting software can streamline the BAS lodgement process, it’s not foolproof. Always verify the accuracy of your financial data and seek professional assistance if needed.
Forgetting To Declare All Income
It’s important to remember that sales revenue isn’t the only income that should be reported. Cash transactions, dividends, interest, capital gains, and even one-time sales or transactions (such as selling equipment to another business or individual) must also be declared for accurate financial reporting.
Claiming Expenses You’re Not Entitled To
Understanding which expenses you’re eligible to claim can be complex. For example, not all expenses, like capital improvements, can be written off as repairs. Conduct thorough research to ensure you’re aware of what expenses you’re legitimately entitled to claim.
Conclusion
In conclusion, understanding the do’s and don’ts of BAS lodgement is essential for businesses in Australia. By following best practices and avoiding common pitfalls, businesses can ensure compliance with tax laws and avoid penalties.
Staying organized, seeking professional advice when needed, and staying informed about tax law changes are key to successful BAS lodgement.
With Clear Tax Accountants, you get accurate support, advice and services that help you lodge your BAS (Business Activity Statement). Whether you are getting started or have experience submitting BAS, we can help you at any stage.
Our advisory services and strong experience in the field can ensure that you stay compliant with the obligations. Call us at 1300 417 399 or email us at admin@cleartax.com.au today!
FAQs
What Happens if I Miss the BAS Lodgement Deadline?
Failure to lodge your BAS by the deadline can result in penalties and fines imposed by the ATO. The severity of penalties may vary depending on factors such as the extent of delay and your compliance history. It’s essential to prioritize timely lodgement to avoid such consequences.
Do I Need to Lodge a BAS if My Business Is Not Making Any Profit?
Regardless of your business’s profitability, if you are registered for GST or have withholding obligations, you are required to lodge a BAS. However, you can report zero income and claim relevant credits or refunds if applicable. Compliance with BAS lodgement obligations is essential, irrespective of your financial performance.
How Often Do I Need to Lodge a BAS?
It depends on various factors, including your business structure, turnover, and GST registration status. Typically, businesses lodge BAS either monthly, quarterly, or annually. Ensure compliance with the ATO’s lodgement schedule based on your specific circumstances.
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