Business Activity Statements, An Important Guide For Business Owners
This guide will break down everything you need to know about business activity statements. We will outline the crucial facts and address any relevant questions you may have as a business owner.
Please note: This guide is not a substitution for professional advice given by an accountant or tax professional.
You should always seek advice before making any changes that could impact your financial health.
A business activity statement or ‘BAS’ is a form you must complete and lodge with the Australian taxation office if you are registered for GST. This statement will show both your business income and outgoings within a specific period.
Are you starting a business? Check out our step by step: How to set up a business.
What Is A Business Activity Statement?
A business activity statement, or otherwise called BAS, is a legal tax form you must fill out periodically if you are registered for GST.
The business activity statement is in place to assist you with the reporting of your GST, PAYG instalments, PAYG withholding, and some other taxes.
The statement will show the government how much you have collected into the business and how much you have spent in a specific time period.
Once your business activity statement has been assessed, the taxes owed are balanced against the taxes paid in the purchase of goods or services relating to running your business.
Note: If you are yet to register for GST you will need to register before being able to complete a BAS. You must have an ABN to register for GST. Please read our guide ‘How To Apply For An ABN’
How Does BAS Effect My Business?
Ensuring you regularly complete your BAS and stay on top of your reporting obligations can be crucial to the financial health of your business.
By completing your business activity statement within the designated intervals you will be able to quickly identify and financial issues that may arise.
This is especially important if you are not using any bookkeeping software for your business.
Think of your BAS as a financial pulse check for the business, below we have included some other common effects your activity statement can have on your business.
- Provides a quick overview of profit and loss.
- Your BAS can help project any tax debt before it gets too large.
- Increase in administration costs for your business.
- The statement can assist in highlighting any tax credits you may be eligible for.
Business Activity Statement Registration
Registering for your business activity statement is automatically done for you when you register for GST.
If you are not registered for GST as you have not met the threshold requirements then you do not need to register for a BAS.
If you wish to register for GST voluntarily and your business turnover is under the threshold, you will still need to complete your BAS.
Need help with GST: Check out our guide “Registering for GST“
Once you have registered for GST you can choose which BAS reporting frequency you will need based on your circumstances.
Monthly BAS: If your business has a turnover of more than 20 Million per annum, you will be required to complete your business activity statement on a monthly basis.
Quarterly BAS: If you are not required to report monthly, and your business turnover is less than 20 Million, you will be required to complete your BAS quarterly.
Yearly BAS: If you have voluntarily registered for GST and your business turnover remains under the threshold, you may complete your BAS yearly.
How To Lodge Your Activity Statement?
There are 3 main ways you can lodge your business activity statement.
Online BAS lodgement is the simplest and most common way to lodge your statement. You can lodge online using one of three available methods.
- Online services using your My Gov account. This service is for individuals and sole traders.
- Standard Business Reporting (SBR) software lodgement. This is accounting software that connects with the ATO and allows you to complete reports such as BAS through the software.
- ATO Online business portal. This allows you to lodge your BAS directly to the ATO, however, there are some changes happening with the portal so we advise using your MyGov or seeking advice from the ATO.
Through Your Tax/BAS Agent
Another way to lodge your activity statement is through your designated tax professional. Be sure you provide them with up to date bookkeeping records to avoid any issues.
We advise using bookkeeping software such as FreshBooks to ensure you don’t miss anything.
Lodgement By Post
Finally, you can lodge your business activity statement by post. If you have a hard copy of your BAS package, you will have a pre-addressed envelope so that you can send your statement by post.
If you have no financial activity to report, you can lodge a “Nil” activity statement. You may do this online or by phone. A nil statement means you have made zero revenue and spent zero on the business during your reporting period.
How Do I Complete My BAS?
In the following steps, we will assume you are completing your BAS as an individual or sole trader. This will guide you through the steps to take to access and lodge your activity statements.
If you need help filling out your financials we recommend seeking professional advice through an authorised tax/BAS agent.
1. Login To MyGov
The first step to completing your business activity statement is to log in to your MyGov online account. If you do not have one you can create one here.
2. Log In To Your ATO Services
Now that you are logged into your MyGov portal, navigate to your ATO services section. If you do not have your ATO services linked to your MyGov you will need to link it and then complete this step.
You can find information about linking your ATO services here.
Once you have logged in to your ATO section in your MyGov portal, you can now navigate to your business activity statement through your tax link in the menu.
You will now be presented with your BAS which are due for lodgment.
Click on the activity statement and follow the instructions to fill and lodge. If you are not confident filling out the required financial information please seek the assistance of a tax professional.
An online account with the Australian taxation office, for small business tax and super services.
An online account with the Australian government that allows you to manage all your affairs.
With the increased reporting of a business activity statement, keeping track of your finances is crucial and FreshBooks can help.