10 things no one tells you about BAS preparation

But don't worry! This blog will tell you 10 important secrets about BAS that nobody talks about.  We'll give you the knowledge to do your BAS confidently and correctly.

1. Use the right ATO codes

While understanding the basics of GST and PAYG is important, the real challenge lies in accurately categorising your income and expenses using the correct ATO codes. Misclassifying even a single transaction can throw off your entire BAS and lead to an incorrect tax liability. Don't just assume you know the right code – consult the ATO website or seek professional advice to ensure accuracy.

2. Timing is everything (and it's not always obvious)

Lodging your BAS on time is crucial to maintaining good standing with the ATO. However, understanding the specific deadlines can be tricky, as they vary based on several factors. Let's break down the key elements that influence your BAS submission timeline:

GST reporting cycles

Your reporting frequency depends on your business's GST turnover:

• Quarterly: If your GST turnover is less than $20 million and you haven't been instructed to report monthly, you'll lodge your BAS every three months.
• Monthly: Businesses with a GST turnover of $20 million or more are required to report monthly. You can also choose to report monthly even if your turnover is lower.
• Annually: If you've voluntarily registered for GST and your turnover is under $75,000 ($150,000 for not-for-profits), you may be eligible to report annually.

BAS quarterly reporting due dates

• July, August, September quarter: Due 28th October
• October, November, December quarter: Due 28th February
• January, February, March quarter: Due 28th April
• April, May, June quarter: Due 28th July

You can find other key dates every small business needs to know here. 

Important notes on quarterly reporting

• Lodging online may grant you an extra two weeks to lodge and pay.
• The due date for the October, November, December quarter already includes a one-month extension.

Monthly reporting deadlines

• Due on the 21st day of the month following the taxable period (e.g., July's BAS is due on 21st August).
• Businesses with a GST turnover of $20 million or more must lodge online.
• Schools and associated bodies receive an automatic deferral for their December BAS, with a due date of 21st February.

Annual reporting deadlines

• The due date is 31st October if you are required to lodge a tax return.
• If you aren't required to lodge a tax return, the due date is 28th February.

Factors that can alter your deadlines

• Lodgment Method: Online lodgment may offer extended deadlines.
• Using a BAS Agent: If you use a registered tax or BAS agent, different dates may apply.

You can contact the ATO to change your reporting cycle. Changes made early in a lodgment period usually take effect immediately. Otherwise, the new cycle starts at the beginning of the next quarter or year. You might not be able to change your cycle if you've changed it within the last 12 months.

3. Accounting software can be a lifesaver (but choose wisely)

Accounting software like Thriday can automate many aspects of BAS preparation, from calculating GST to generating reports. However, not all software is created equal. Some may be too basic for your needs, while others may be overly complex and expensive. Research your options carefully and choose software that's user-friendly, affordable, and tailored to your business requirements.

Read our guide when choosing an accounting software in Australia. 

4. Record keeping is your secret weapon

The key to a smooth BAS lodgment is meticulous record-keeping. Keep detailed records of all your income and expenses, including invoices, receipts, and bank statements. This will not only make it easier to prepare your BAS but also provide valuable evidence in case of an ATO audit.

5. Don't underestimate the power of reconciliation

Regularly reconcile your bank accounts with your accounting records to ensure everything matches up. This will help you identify any discrepancies or errors early on, preventing them from snowballing into bigger problems down the track.

6. Claiming every credit you're entitled to

Many businesses miss out on valuable GST credits because they're not aware of all the eligible expenses. Do your research and ensure you're claiming everything you're entitled to, from office supplies and utilities to travel and training expenses.

7. The ATO is not always your enemy

While the ATO may seem intimidating, they also offer a wealth of resources and support to help businesses meet tax obligations such as ATO's Interactive GST Calculation Worksheet. This online tool can assist you in calculating your GST. It provides a step-by-step guide and helps ensure accuracy.

8. Mistakes happen (but you can fix them)

Even with the best intentions, mistakes can happen on your BAS. If you discover an error after lodging, don't panic. You can usually amend your BAS online or by contacting the ATO. The sooner you address the mistake, the better.

9. Investing in professional help can pay off

If you're struggling with BAS preparation or simply don't have the time to do it yourself, consider hiring a registered BAS agent. They can handle all aspects of your BAS lodgment, ensuring accuracy and compliance while freeing up your time to focus on your business.

10. BAS isn't the same as a tax return

While both involve reporting information to the ATO, they're not quite the same. Here's a simple breakdown:

The BAS is all about keeping the ATO in the loop about your business taxes throughout the year. It's like sending them regular updates. It mainly deals with GST, which is the tax you collect when you sell things and pay when you buy things for your business. 

You report how much GST you collected from customers and how much GST you paid to suppliers. The BAS also covers PAYG instalments, which are like pre-payments of your income tax, and PAYG withholding, which is the tax you withhold from your employees' wages. You usually lodge your BAS every quarter, meaning you send it to the ATO four times a year.

Meanwhile, your tax return is a yearly wrap-up of your business finances. It's a comprehensive report that summarises all your income and expenses for the entire financial year, from July 1st to June 30th. The main purpose of the tax return is to calculate your total taxable income and determine how much tax you owe for the year. 

It takes into account all your income from sales, any deductions for business expenses, and any tax offsets you might be eligible for. You lodge your tax return once a year, after the financial year has ended.

Download Thriday to lodge your BAS online

Wave goodbye to manual calculations and hello to effortless automation. Thriday automatically tracks your income and expenses, calculates your GST with pinpoint accuracy, and pre-fills your BAS form, so you don't have to.

Ditch the snail mail and embrace the digital age. With Thriday, you can lodge your BAS online in minutes, directly to the ATO, with no printing, signing, or postage required.

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