While the types of taxes you pay may vary, tax obligations are inevitable as a business owner. Therefore, you must understand some basic terms, filing procedures and deadlines in order to avoid tax delinquency. Luckily, having someone in charge of these matters (such as a bookkeeper) can spare you the hassle, but it is still good to have some understanding of a few things and BAS submission is one.
What is BAS?
BAS stands for “Business Activity Statement”. This form must be sent to the Tax Office by all Australian businesses since it is used to report their tax obligations. There are a number of different forms that you may have to complete, with your business’ tax liability determining which ones you will receive.
What Does a BAS Include?
Your BAS could include your PAYGW, PAYGI, and FBT. Depending on your industry or business, you may also be subjected to LCT and WET.
How Often is a BAS Submitted?
On average, you are expected to submit a BAS quarterly. However, some roles can be submitted annually if you qualify (GST for example). Some roles may also have to be reported more frequently depending on your business which means you could be required to report them monthly (GST and PAYGW for examples).
How do I Submit a BAS?
Your BAS must be sent to the Australian Taxation Office (ATO) via regular paper mail, over the phone, through a tax agent using the business portal, or using the ELS (also called the Electronic Lodgment System).
What Happens After I Submit my Form?
Your statement has to be processed by the tax office to spot errors as well as to allow whatever assessments are needed in order to ensure that your tax obligations are properly documented. You will then be contacted where necessary and the department to do so will vary based on a few factors. Overall, there is nothing to worry about once you complete the statement honestly and accurately.
Glossary of Terms
The following terms are important to know if completing your BAS on your own:
– PAYGW or Pay As You Go Withholding. This is also called ITW or Income Tax Withholding.
– PAYGI or Pay As You Go Instalments. This tax role that is also referred to as ITI or Income Tax Instalments.
– FBT or Fringe Benefits Tax.
– WET or Wine Equalisation Tax.
– LCT or Luxury Car Tax.
The BAS procedure has changed since it was first implemented; this along with the fact that taxation is subject to changes make it important to keep abreast of any developments to the system. Fortunately, having a trained bookkeeper can eliminate the need to have an intricate understanding of this and all other tax processes, so you should consider using one. Furthermore, you can easily, outsource these tasks to help you meet your deadlines, submit accurate statements and avoid the hassles that can come from errors. Remember, not understanding the process will not spare you from it or the penalties that can come with non-compliance. A competent bookkeeper solves this problem for you.