1. General BAS Questions
Q – What is a BAS Return?
A – A BAS return is a return that GST registrants need to lodge (usually quarterly for small business) to account for:
- the difference between GST Collected (for customers) and GST Paid (to suppliers)
- PAYG withheld from employees
- where required, an advance on your income tax (called PAYG income tax)
2. Due Dates
Q – When Are My BAS Returns Due In??
A – For quarterly payers who are not using a professional to lodge their return, BAS payments are due in:
- for the quarter ending 31 December – by 21 February
- for all other quarters – by the 21st day after the end of the quarter
Extensions apply if you are using the online portal or a BAS agent or Tax agent.
3. Getting Ready for Your First BAS
Q – I have just registered for GST, what should I do next?
A – Here is our recommended 5 simple and quick steps:
- Business Bank Account. If you don’t already have it, set up a separate bank account for your business. Run all income and expenses through that account
- Bookkeeping System. Decide what Bookkeeping System you want to use. Your choices are the bank account, a spreadsheet or bookkeeping software like Xero or MYOB.
- BAS Assistant. Some BAS or Tax Agents insist on the financial information being in a certain format (eg “must be a spreadsheet or MYOB”). If you decide now that you want to get help at BAS time, then you can know what that provider requires
- Put All Income and Eligible Expenses Through the Account. Get clear on all the expenses that you are incurring in running your business and take them out of the business bank account. If these expenses include GST – and most do – then you will reduce your GST payable by the amount of the GST included in the purchases. (If you have incurred the expense personally – eg out of another account or on credit card – just reimburse the business portion of the expense out of the business account).
- Save For BAS Time. Assuming your revenue exceeds your expenses, you will need to pay money at BAS time. To make sure that you have the money, put a little aside each week. A second or reserve business bank account is a good idea for this purpose.
Q – How can I calculate the amount of GST that I need to pay or that will be refunded to me?
A – There are 3 main components to a BAS return:
- PAYG on employees
- PAYG for your own income tax (ie paying your income tax upfront)
If you are a new business without employees, you only need to worry about the GST component. In that case, your payment (or refund) is calculated as follows:
- Sales that include GST
- GST included in above Sales (take 1/11th of the total)
- Purchases that include GST
- GST included in above Purchases (take 1/11th of the total)
- Subtract B minus D
If the above figure is positive, then you owe that amount to the Tax Office.
If it is negative, then you are entitled to a refund of that amount
Q – Do all purchases have GST included in them?
A – Most do. The most common exceptions are:
- non prepared food (eg milk and instant coffee but not take away coffee or biscuits)
Q – If I dont make any sales or purchases in a quarter, do I still need to lodge a BAS return?
A – Yes. You need to lodge what’s called a NIL return.
4. Lodging Your First BAS Return
Q – Where do I get the first blank BAS return from?
A – Unless a BAS or Tax Agent has you on their portal, the blank BAS return will come to you in the post.
5. What Can i Claim as GST Deductions?
Q – What expenses can I include in my BAS return?
A – Check out our list here:
BAS Return Expense Entitlements Guide
6. BAS Payment Matters
Q – After lodging my BAS return, do I need to pay money?
A – If the amount you owe exceeds the amount owed to you, then you need to pay
Q – What if I owe BAS but don’t have the money to pay?
A – Obviously the ideal is to put aside the money each week so that you have it. But if you fidn yourself in the position where you don’t have the money, you should call the Tax Office and ask for a payment plan. If you call the Tax Office upfront, then any fines will usually be lower.
Q – What are the penalties if I’m late or make a mistake in my BAS?
A – The penalty for late lodgement can be $170 for every 28 days late. The penalty for understating your BAS payment depends on the understatement but can be significant.
8. BAS Services
Q – What are the benefits of getting a BAS agent or Tax agent to lodge my BAS return for me?
A – It depends on the provider but some things to look for are;
- they know all the Tax office requirements,
- they will help you maximise your deductions
- they meet their commitments around time
- they are available to talk to you and answer any questions
Q – Is it better to chose a BAS agent or Tax agent to help?
A – The actual qualification doesn’t matter much. What’s more important is the type of service and costs. We recommend that you check those out before making a decision on which way to go.
Q – What if I already have an Accountant?
A – We work with many clients where we do the work during the year and they use their Accountant for FYE tax stuff. This commonly delivers the best value for money for many of our clients.
Q – What is bookkeeping and how does it fit in with BAS?
A – Bookkeeping generally refers to the process of entering your transactions into a bookkeeping system (such as Xero or MYOB or even a simple spreadsheet).
If you have employees, it can also include running the payroll.
If the bookkeeping is done correctly, then the figures for the BAS come directly from the System without you needing to do any calculations.
Q – What is Xero?
A – Xero is a cloud based bookkeeping system. It delivers benefits in the form of:
- Less bookkeeping costs – due to auto transfer of information from your bank account and rules
- 24/7 access to your accounts – with internet access
For a free trial of Xero, contact us.
Q – When does it make sense for a small business to outsource its bookkeeping?
A – In any of the following situations:
- you hate doing it yourself
- you don’t want to spend time on it
- you don’t have anybody else who you can trust to do it for free
Q – Can you tell me more about your BAS and Bookkeeping services?
A – Sure check out our BAS return services here:
Q – Do you help clients with more than just preparing and lodging their BAS return?
A – Yes, we also provide full bookkeeping packages, see
Q – I don’t want to have to think about all this finance stuff this, can you help me?
A – Yes, thats exactly what our Monthly Package is designed for. After a small amount of set up, all you need to do is bill your clients and make sure all your transactions go through your business bank account. Nice and simple:
Q – Do you have any more general information?
A – Check out these Guides: