As a business owner, fulfilling your financial obligations is crucial to ensure you avoid paying unnecessary penalties in the future. Although it might seem overwhelming at first, taking the proactive approach and using the right tools can go a long way to helping ensure that you meet all of your tax obligations. Ignorance is not an acceptable excuse for failing to do what is required of you so it’s critical you take some time to understand what you need to do and what processes you need to complete to fulfil your obligations.
To start with, you have to be on top of your Business Activity Statement (BAS), a report of your business activity as required by the Australian Tax Office. Your BAS Statement contains all of the information needed to report and pay your tax liabilities. For every business that is registered to pay Goods and Services Tax and has been given an Australian Business Number, BAS reporting is compulsory.
Keep reading to learn more about BAS Statements and how you can take the right steps to ensure you complete your BAS correctly.
Keep Accurate Records
Keeping accurate records is vital to successful preparing and processing your BAS. Keep all business receipts and invoices and take time to categorise them in a way that will make them easier to decipher. This will save your time when preparing your BAS. Accounting software can help make this process much easier for you; taking a lot of the stress out of the process and eliminate the possibility of errors.
Be sure to keep your accounts up-to-date with the information of every transaction carried out in the business and get into the habit of doing this going forward. Set up a process whereby for every transaction, you always note the date, description of the transaction, type of transaction and the goods & services tax.
When it is time to lodge your BAS, put all these records together and complete the form. For every BAS you lodge with the Australian Tax Office, ensure that the information you provide matches the records in your accounting system.
Know Your BAS Lodgment Dates
Depending on your business’ cash-flow, you can choose to lodge your BAS on a monthly, quarterly or annual basis. Don’t let the tax office come for you, instead make sure you know when your BAS is due for lodgement. If there is any chance you will be unable to meet the lodgment date, contact the Australian Tax Office beforehand to prevent any issues. Even if your business is not making money yet, it is still important that you lodge and submit your business activity statement to avoid penalties.
Lodging Your BAS
You have two options to submit your BAS, either online or through a licensed tax agent. The ATO has made lodging your BAS easier as you can now submit the form over the phone, online or through the mail. If your business has an accountant, they should be in charge of doing this to ensure everything goes smoothly and everything is completed correctly. Make sure to choose the most convenient payment option for you to make submission easier.
To avoid being penalised for late payments, it is advisable to lodge tax payments a few days ahead of your deadline. Failure to lodge your BAS on time can result in $110 failure to lodge penalty being issued.
Be Prepared And Plan For Your BAS Submission
Running a successful business means keeping a lot of different elements in check at all times and no aspect of your business is more important than your financial obligations. Be sure to put processes in place so that, when the time comes to fill in your BAS, you’re not scrambling to find the information you need. Being prepared and planning for your BAS submission will allow you to avoid any complications with the ATO, incurring fines and potentially hurting your business going forward. Be smart, be prepared and submitting your BAS will be much a more straightforward and less-stressful experience.
