Simpler BAS Posted by: adminbookkeeping BUSINESS ACTIVITY STATEMENT (BAS) MADE EASIER Ever been confused by the GST labels on your Business Activity Statement (BAS)? Or felt unsure about which classification code to use? We can assure you; you’re not the only one. Many of our small business clients struggle with the current BAS – and rightly so – it’s complicated. Business owners should be free to focus on running their business, not studying tax terminology and classifications. That’s why people like us exist, and it’s why from July 1, we’ll start seeing a simplified BAS form for small business, courtesy of the ATO. WHAT’S THE PROBLEM? Put simply – too many coding options. Small business and industry professionals alike found the (soon to be old) reporting requirements onerous, confusing, and of little value. The ATO listened to these concerns and took action to simplify the process for everyone involved. View this short video for a snapshot of the situation. WHAT’S IN IT FOR YOU? With the introduction of the simpler BAS, small business owners will only need to report GST on: Sales (1A) Purchases (1B) Total sales (G1) There’s more good news – you will only have to classify these transactions using either GST or No GST codes – only two options! Two! Reporting on things like export sales, capital (and non-capital) purchases will also be a thing of the past. It’s worth noting though, if you usually report PAYG withholding and PAYG instalments, wine equalisation tax, FBT, fuel tax credits, and luxury car tax you will need to continue doing so. SIMPLER BAS BENEFITS AT A GLANCE The simpler BAS will help: reduce GST non compliance cost less for a bookkeeper to set up and automate with accounting software reduce time spent on BAS preparation improve accuracy of transactions (which means less adjustments). According to the ATO, the new statement will ‘simplify account setup, ongoing bookkeeping, and BAS preparation and lodgment, giving you more time to focus on your business.’ If everything goes to plan, we think they’re bang-on the money. TESTING 1,2,3 As we speak, the ATO are testing the simplified form with 2000 small businesses, tax professionals and software developers. You can read a detailed report on the test scope, findings and recommendations on the ATO website. WHEN WILL IT KICK IN? Good question – it depends on whether you are a new small business or have been around for a while. BAS FOR NEW BUSINESS If you are a small business registered for GST from 19 January 2017, you have the option to use the Simpler BAS. How you select this option varies on your chosen lodgment cycle (quarterly, monthly, or annually). Here’s the deal: If you intend to lodge quarterly When completing your first BAS, select ‘Option 2: Calculate GST quarterly and report annually’. This indicates that you would like to use the Simpler BAS reporting option. If you intend to lodge monthly Insert ‘0’ at G2, G3, G10 and G11 on your BAS. If you intend to lodge annually Leave G2, G3, G10 and G11 blank on your Annual GST Return. SIMPLER BAS FOR EVERYONE ELSE Provided the testing goes smoothly, and any bugs are ironed out, you’ll have access to the Simpler BAS from 1 July 2017. Under the new ‘Small Business’ definition, any business with a turnover of below $10m will lodge the new simpler BAS. Not a bad way to start the new financial year! GST LAW IS UNCHANGED While the form has changed, the law remains the same, which means you’ll still need to consult a BAS agent to ensure you’re meeting your legislative obligations. You (and your agent) may opt to use tax codes for your internal reporting, but it’s certainly not a mandatory requirement. It goes without saying, keeping all business transaction records remains a requirement by the ATO. WHERE TO FIND OUT MORE If you have any questions about BAS lodgment, contact us for a chat. We’ll be keeping you up-to-date on any news or developments as the ATO releases information, on our social media channels. So if you’re not already following us on Facebook, LinkedIn or Twitter, get on board!