Understanding the Key Components of a BAS Statement

Running a business in Australia? Submitting a Business Activity Statement (BAS) must be your topmost priority to stay compliant with the Australian Taxation Office (ATO). It is a form filled out by GST registered companies to provide complete details of their Goods and Services Tax activity over a specific timeframe.

In simple terms, it helps you know how you report your business taxes to the ATO. Every business owner must lodge a BAS regularly, either monthly, quarterly or annually, depending on the size of the business and ATO requirements. This will help you avoid unexpected tax bills, interest and penalties when filing your taxes.

However, many entrepreneurs find the Business Activity Statement (BAS) to be baffling and stressful. That’s where a professional bookkeeper in Melbourne comes in. They can help you lodge the BAS online on time.

Plus, you will also receive an extra two weeks to make payment of any GST or PAYG withholding, with a quick refund process available through the ATO’s online services. However, if you want to do it on your own, you must be familiar with the key components of a BAS statement to ensure a seamless submission. This simplifies the process and helps you manage necessary tax obligations effectively.

What’s Included in a Business Activity Statement?

The Australian Taxation Office uses the filled BAS statement to keep track of how much GST and tax your company owes. This ensures that everyone pays their part of taxes on time. Make the payment online with the help of a professional agent by the due date using a credit card, BPAY, and other secure online transaction options. A BAS statement includes:

1. Goods and Services Tax (GST) Reporting

The Goods and Services Tax (GST) is one of the most essential parts of your BAS statement. It is the 10% tax included in most goods and services in Australia. It is a consolidated tax that covers sales tax, excise duty, and other related taxes.

As a responsible business owner, you’ll need to report how much GST you have collected from the sales and how much Goods and Services Tax you’ve paid on purchases. Here is a quick breakdown:

• GST collected via Sales: This is the total GST you’ve charged from your customers
• GST Paid: This is the total of GST you’ve paid on your business purchases
• Net GST: A difference between the GST you collected and the GST you paid. If the collected amount exceeds the amount you paid, you owe the ATO. On the contrary, if you paid more, you’ll get a refund after lodging your BAS statement.

2. Pay As You Go (PAYG) Tax Withholding

It refers to the tax businesses in Australia withhold from their employees’ wages or salaries. The withheld amount must be submitted to the ATO on behalf of your employees. The key components in PAYG tax withholding include:

• Gross Wages: This includes the total amount of salaries you paid
• Tax Withheld: The total amount of tax you withheld from their wages
• Reporting: Report this amount when filling out your BAS to let ATO know you have paid the right amount.

Ensure you collect all necessary information related to PAYG tax before filling out the form and verify it by experienced Melbourne bookkeepers for your peace of mind.

3. Fringe Benefits Tax Instalment (FBT)

Many businesses in Australia offer additional perks to their employees, in addition to their salaries, to keep them motivated and satisfied at work. This is known as fringe benefits. These strategies help businesses attract and retain top talent in the long run.

This includes a company car for personal use, reimbursement of personal expenses, etc. However, companies must pay taxes on the fringe benefits they offer to their employees.

It is calculated on the taxable value of the perks, and the business must lodge for FBT. Ensure you regularly maintain business records to stay organised when lodging a BAS form and pay all taxes on time, including instalments.

4. PAYG Income Tax Instalments

It is also an essential component in your BAS form. PAYG instalments are settled by businesses that have reached a threshold to pay the income tax in instalments and alleviate the stress of payments. You must pay it quarterly to save the stress of paying a large tax bill.

For instance, if your income tax estimate is $12,000 annually, you may pay $3,000 quarterly.

5. Luxury Car Tax (LCT)

The Luxury Car Tax is imposed on the sale of luxury cars imported by companies with a GST added value. It should be added to your BAS form. The LCT rate is 33% and is paid by people registered for it. It is pad by car dealers selling high end vehicles. Make sure you report and pay your Luxury Car Tax on time.

6. Fuel Tax Credits

These are refunds that businesses in Australia can claim for the fuel tax (such as customs or excise duty) included in the price of fuel consumed for business operations. The fuel tax rates are subject to frequent changes and, thus, must be thoroughly checked before completing the BAS form.

7. Wine Equalisation Tax (WET)

If you’re in the wine making, selling and importing business, you’ll need to fill out the WET column in the BAS. The Wine Equalisation Tax rate in Australia is 29 per cent of the wine’s wholesale value. Wholesalers can even claim it from the ATO with the assistance of professional bookkeepers in Melbourne. They can also help you stay ATO complaint with your business finances.

Wrapping Up

Every business must stay on top of its accounting and tax related records and lodge the BAS statement on time. With the help of this guide, you can easily understand the key elements of your Business Activity Statement and fill out the form effectively.

You can also double check the ATO website or hire a professional accountant in case of any doubt to maintain your GST and other tax records.