How To Prepare For Your First BAS (Business Activity Statement)?
How To Prepare For Your First BAS (Business Activity Statement)?
As a business owner in Australia, your first BAS should be lodged for compliance with ATO (Australian Taxation Office) requirements.
Whether you are a newly beginning venture or crossing GST limits, it is important to learn how to prepare for the BAS to avoid penalties and ensure proper financial reporting.
Learning how to prepare your first Business Activity Statement can look challenging especially when you are a new business owner.
This blog will talk you through every step from collecting necessary documents to lodging your BAS so that you are able to file accurately and with confidence.
Understanding BAS
The Business Activity Statement is a form used to report and pay various tax obligations to the Australian Taxation Office (ATO). It typically includes Goods and Services Tax (GST), Pay As You Go (PAYG) withholding, and other taxes.
Step-by-Step Guide To Preparing Your First BAS
1) Gather Necessary Information
Before you even think about completing your BAS lodgement for business, you’ll need to gather specific financial records. These records are crucial for ensuring that all your calculations are accurate and reflect your business’s activities during the reporting period.
Here’s what you’ll need:
| Required Documents | Details |
|---|---|
| Sales invoices | Total income earned during the period |
| Expense receipts | Costs incurred by the business |
| Bank statements | Records of all transactions |
| Employee wage records | For PAYG withholding reporting |
| GST credits or payments | Records of GST collected and paid |
Having these documents readily available will make the BAS process smoother and ensure that your financial reporting is accurate.
2) Verify GST Registration
Confirm your GST registration status to avoid potential penalties. If your annual turnover exceeds $75,000, you are required by law to be registered for GST, and failure to do so can lead to hefty penalties.
To verify your GST status:
- Log in to your myGov Business account or the Australian Business Register.
- Check the “Goods and Services Tax (GST)” section to ensure you’re correctly registered.
3) Access The BAS Form
You can access your BAS form through the ATO’s online services. Here’s how:
- Log in to your myGov account and navigate to the “Reports and Forms” section under your business profile.
- Locate the pending BAS form, and you’re ready to begin.
Ensure you have your myGov ID ready as it’s required for secure access. For those looking for professional help, hiring a BAS accountant Melbourne is a great option to navigate this process smoothly.
4) Calculate GST Amounts
Accurate GST calculations are crucial for your BAS.
Here’s a simple method:
| Calculation Type | Formula | Example |
|---|---|---|
| GST on Sales | Total Sales ÷ 11 | $11,000 ÷ 11 = $1,000 |
| GST on Purchases | Total Purchases ÷ 11 | $5,500 ÷ 11 = $500 |
5) Report PAYG Withholding
If you have employees, you’ll need to report the tax withheld from their wages:
- Add up all withheld tax amounts for the reporting period
- Verify these totals against your payroll records
- Enter the total gross wages under “W1” on the BAS form
- Enter the total tax withheld under “W2”
6) Include Other Tax Obligations
In addition to GST and PAYG, your BAS might also need to include other tax obligations like Fuel Tax Credits and Luxury Car Tax (LCT).
Here’s what to do for each:
- Fuel Tax Credits: Multiply the eligible fuel quantity by the current credit rate, then report under “7C”.
- Luxury Car Tax: For vehicles above the LCT threshold, report 33% of the amount that exceeds the threshold under “1E”.
7) Double-Check for Accuracy
Before submitting your BAS, review all the information you’ve entered to avoid mistakes. Key areas to check include:
- GST amounts under “G1”, “G10”, and “G11”.
- PAYG withholding under “W1” and “W2”.
- Other taxes such as fuel tax credits or luxury car tax under “7C” or “1E”.
Ensuring accuracy will not only help you avoid penalties but also ensure you’re claiming all the GST credits you’re entitled to.
8) Lodge The BAS And Make Payments
Once you’re confident in your BAS’s accuracy, submit it through the ATO portal. You’ll receive a confirmation message with a receipt number – keep this for your records.
Payment options include:
- Electronic transfer to the Reserve Bank of Australia
- Credit card (Visa, MasterCard, or American Express)
- BPAY
- Direct debit
- Cheque
- In-person at Australia Post
9) Retain Records
It’s important to keep all records associated with your BAS lodgement, including sales invoices, bank statements, and the confirmation of payment from the ATO. These documents should be kept for at least five years as part of your compliance with ATO requirements.
10) Stay Compliant With BAS Reporting
To maintain compliance:
- Prepare early to avoid last-minute rush
- Double-check all calculations
- Know your reporting cycle (monthly, quarterly, or annually)
- Consider ATO payment plans if needed
11) Seek Expert Assistance
Consider engaging a BAS accountant in Melbourne for:
- Expert guidance on tax laws
- Increased accuracy in BAS preparation
- Time-saving benefits
- Support during ATO audits
- Improved cash flow management
KPG Taxation handles all your GST and tax commitments accordingly hence making BAS lodgement simple for companies. Along with 10 locations in Australia, our professional BAS accountants in Melbourne will ensure that your BAS is submitted correctly within the deadline which saves you from getting fines. Contact us now so that we can process your BAS and GST requirements while you’re left to concentrate on developing your business.
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