BAS and reporting
Quarterly BAS
A quarterly BAS is a Business Activity Statement lodged every three months, the most common reporting cycle for small and medium GST-registered businesses.
A quarterly BAS covers a three-month period and is the default reporting cycle for most small businesses registered for GST. The four quarters follow the financial year: July to September, October to December, January to March, and April to June. After each quarter ends, you work out your GST and any other obligations and lodge the statement.
The statement is generally due 28 days after the quarter ends, although the quarter ending in December has a later due date because of the summer break, and lodging through a registered agent can allow extra time. Payment is generally due by the same date, so the cash for GST and PAYG needs to be set aside well before then. The ATO publishes the dates each year.
Quarterly reporting suits businesses with moderate turnover and straightforward operations. It reduces paperwork compared with monthly reporting but it can create a cash flow risk, because three months of collected GST accumulates before it is paid. Many owners find it helpful to move the GST portion of each sale into a separate savings account so the quarterly bill never comes as a surprise.
Within a quarterly BAS you report the GST on sales and the credits on purchases, then pay or receive the difference. If you also have employees, you report PAYG withholding. If you pay PAYG instalments, the amount for the quarter appears on the same statement. All of these are calculated from your records for those three months, so reconciling the books at quarter end is essential.
Businesses can change cycles in some situations. Those who grow past the thresholds set by the ATO may be required to report monthly, and others may choose monthly reporting if they regularly claim refunds and want them faster. Small businesses that are voluntarily registered can sometimes opt for annual reporting instead. Ask the ATO or your agent before changing, as the change generally takes effect from a set period.
A common mistake is to treat the quarter end as the lodgment date, or to forget about the quarter altogether in busy periods. Another is mixing up accrual and cash accounting, which changes which quarter a sale or purchase falls into. Keep records for five years. This is general information only, so confirm your reporting cycle with the ATO or a registered tax professional.
Worked example
Nina's design studio reports quarterly. For July to September, she charged $44,000 including GST, so GST collected is $4,000 (44,000 divided by 11). She has purchases with tax invoices of $11,000 including GST, giving $1,000 in credits. Her net GST is $3,000. She lodges and pays by the 28 October due date, having put aside $1,000 a month in a separate account.
Practical tips
- Move the GST portion of each sale into a separate account so the quarterly payment is already saved.
- Reconcile your books at each quarter end before preparing the statement, rather than waiting until the due date.
- Check whether your reporting cycle still suits you if turnover changes, and ask the ATO before switching.