BAS and reporting
Business Activity Statement (BAS)
The Business Activity Statement is the form registered businesses lodge with the ATO to report GST and, where relevant, PAYG withholding, PAYG instalments and other tax obligations for a reporting period.
The Business Activity Statement, known as the BAS, is how most GST-registered businesses report and pay several taxes in one place. It is lodged with the ATO for each reporting period, usually quarterly, and summarises the GST you collected on sales, the GST credits you are claiming on purchases, and the net amount you owe or are owed. Other obligations can appear on the same form, depending on your business.
The GST section is the part most small businesses focus on. You report your total sales, the GST on those sales, your purchases and the GST credits attached to them. The difference between GST collected and GST credits becomes your net GST amount. If you collected more than you paid, you pay the difference to the ATO. If your credits are higher, you are generally entitled to a refund, subject to ATO checks.
Beyond GST, a BAS may include PAYG withholding from employee wages and certain payments to contractors, PAYG instalments toward your income tax, and other items such as luxury car tax, wine equalisation tax, or fringe benefits tax instalments where they apply. Your BAS only shows the sections relevant to your registrations, so two businesses can have very different looking forms.
Most people prepare the BAS from their accounting software, which pulls figures from the tax codes assigned to each transaction. The accuracy of the BAS therefore depends on how well transactions are coded. Mistakes, such as claiming GST on a GST-free purchase or leaving out a sale, flow straight through to the statement. Reconcile your accounts before you prepare it and review the GST report against your bank statements.
Lodgment and payment are separate obligations with the same due date. Quarterly BAS statements are generally due 28 days after the end of the quarter, with later dates available in some cases when lodged through a registered agent. Late lodgment can attract a failure to lodge penalty, and unpaid amounts can attract the general interest charge, so it is worth lodging on time even if you cannot pay in full and then contacting the ATO about a payment plan.
A common misunderstanding is that a BAS is only needed if you made sales. If you are registered for GST and have a lodgment obligation, you generally need to lodge even for a quiet period, reporting nil amounts if appropriate. Keep your records for five years. This is general information only, so confirm your obligations with the ATO or a registered tax professional.
Worked example
For the quarter, Sam's cafe records total sales of $66,000 including GST, so GST collected is $6,000 (66,000 divided by 11). Purchases with tax invoices total $22,000 including GST, giving credits of $2,000. Net GST is $6,000 minus $2,000, which is $4,000 payable. His BAS also shows $3,500 of PAYG withholding, so he pays $7,500 in total by the due date.
Practical tips
- Reconcile your accounts and review your tax codes before preparing the BAS, since coding errors flow straight onto the statement.
- Lodge on time even if you cannot pay in full, then contact the ATO to arrange a payment plan.
- Put the due dates in your calendar and set aside the GST you collect so the money is there when the BAS is due.