BAS and reporting
Annual GST return
An annual GST return lets some small, eligible businesses report and pay GST once a year instead of every quarter, which reduces how often they have to lodge.
An annual GST return is a simpler reporting option for certain small businesses. Instead of lodging a BAS every quarter, an eligible business reports its GST once a year. It is mainly designed for businesses that are voluntarily registered for GST, meaning their turnover is below the registration threshold, and that want to keep administration light.
Eligibility rules are set by the ATO and can change, so the first step is to check whether you qualify. Businesses that are required to register because their turnover is at or above $75,000, or $150,000 for non-profit organisations, generally cannot use annual reporting simply by choosing it. Taxi and ride-sourcing drivers, who must register regardless of turnover, also have specific rules. The ATO or your agent can confirm what applies.
The annual option reduces paperwork but also changes cash flow. Because GST is only paid once a year, the money collected on sales builds up in the business account for up to twelve months. Owners who treat that money as working capital often struggle when the bill comes in. The safest approach is to put the GST portion of each sale aside as you go.
Annual reporting does not remove the need for good records. You still need tax invoices for purchases over $82.50 to claim credits, you still need to keep your sales records, and you still need to work out the GST on each transaction. Many people do the work quarterly anyway and simply lodge once, which keeps the books accurate and avoids a year-end scramble.
An annual GST return is different from an income tax return. They are separate documents with separate due dates, although the figures should be consistent. Annual reporters may also have other obligations, such as PAYG instalments, that are handled in different ways. Also note that registering for annual reporting is a choice made with the ATO and may not be available to everyone.
Businesses that grow past the thresholds, or no longer meet the eligibility criteria, will need to move back to a standard cycle. Records should be kept for five years. This is general information only, so confirm your eligibility and obligations with the ATO or a registered tax professional.
Worked example
Elena runs a small craft business with annual sales of $48,000 including GST and is voluntarily registered. Over the year, she collects GST of about $4,364 (48,000 divided by 11) and has credits of about $1,200. Under annual reporting, she lodges once and pays net GST of roughly $3,164. She moves the GST from each sale into a savings account so the money is there.
Practical tips
- Confirm with the ATO that you are eligible before assuming you can report annually.
- Set aside GST from every sale, because a single yearly payment can be large.
- Keep tax invoices and records throughout the year even though you only lodge once.