What To Do (And Not Do) When Lodging Your BASStuart Taverner
If your small business has been operating for a while and is registered for GST, you’re probably familiar with preparing and submitting a Business Activity Statement (BAS). But if you’re new to the small business world, the BAS reporting system might be difficult to understand.
To put it simply, the BAS is a form that is submitted to the Australian Taxation Office (ATO) for business entities to report their tax obligations. This includes things like the GST, pay as you go (PAYG) withholding tax, fringe benefits tax (FBT) and more. To prepare and submit the BAS, you can use accountants, bookkeepers, tax software or the ATO website, among other options. Cashflow Manager is a user-friendly, efficient choice for small and micro businesses looking to submit their BAS.
If you’re completely new to lodging a BAS (or just want a refresher), see our detailed checklist for the steps you should follow. Next, read on for some tips on things to avoid when you’re lodging, to make the experience as smooth as possible.
What to do when lodging your BAS
Lodging a BAS is straightforward, but it’s important to set aside some time for it. Mistakes can occur when you’re not careful, and you need the statement to be precise. Some tips to keep in mind when completing your BAS include:
Keep accurate, comprehensive records
Make sure you have a system for monitoring the sales, fees, wages, expenses and other costs that keep your business running on a day-to-day basis.
Only lodge one BAS
For each period, make sure you only lodge one BAS. If your form has been replacement, make sure to use the new replacement form – not the original.
Address what applies to you
Some fields on the BAS won’t apply to you. If they don’t, there’s no need to complete them – and if you have nothing to report in a section that asks for a number, enter zero.
Use the ATO’s Record keeping evaluation tool
The Australian Taxation Office’s handy Record keeping evaluation tool can help you assess how well you’re keeping your business records. And the good news is, it only takes about five to ten minutes to complete.
It can be paperless
If you lodge your BAS electronically, you are not required to send the ATO a paper form. Another way that lodging online is being encouraged is through extended deadlines: by submitting electronically, you may get an extra two weeks to lodge and pay your BAS.
Be careful with the labels
When entering the figures for your obligations, pay careful attention to whether you’re putting them under the correct labels.
Enter whole dollar amounts
When entering amounts, don’t include cents, and don’t round up to the next dollar.
Seek help if you need
You don’t need to complete your BAS yourself. You can engage registered tax agents and BAS agents, or explore user-friendly accounting software options like Cashflow Manager.
What not to do when lodging your BAS
If you make a mistake, you can always revise or fix the mistake on your next BAS. But ideally, you won’t need to – and by taking time to be aware of some of the common mistakes that people make when lodging, you could save yourself more work in the long run. Here are some of the common mistakes that people make when lodging their BAS:
Forgetting to declare all income
Sales aren’t the only income you need to declare. You need to declare cash, dividends, interest, capital gains and even one-off transactions (for example, if you sell equipment to another business or individual).
Claiming expenses you’re not entitled to
Many people misunderstand exactly what expenses they’re entitled to claim. For instance, capital improvements can’t be written off as a repair – do your research properly to know what you’re entitled to.
Incorrectly claiming losses
Carefully calculate business losses incurred. Many small business owners don’t do this properly when submitting their BAS.
Incorrectly apportioning expenses
Adjusting expenses can be tricky, but you need to do this accurately. Expenses that are used both privately and, in your business (including adjusting for rent expenses if you use your business premises to store personal assets) need to be apportioned correctly.
Incorrectly recording the value of goods
Time to look through that box of receipts! All too often, people record incorrect figures as to the value of goods taken for private use, and directors’ fees or other money that is drawn out of their business.
Download a free BAS guide for small businesses
Our quick guide to BAS includes much-needed information on:
- What exactly is a Business Activity Statement (BAS)?
- How to know if you need to lodge a BAS
- Understanding due dates
- Tips to make BAS lodgement easier
- Help submitting a BAS online