Business Activity Statements (BAS) are a fundamental aspect of operating a business in Australia. For businesses in Western Australia, understanding the intricacies of BAS due dates and lodgements is crucial to maintaining financial health and compliance with the Australian Taxation Office (ATO). This article aims to provide a detailed guide on BAS and its due dates, ensuring that you remain informed and organised.

What is BAS?

A Business Activity Statement is a form submitted to the ATO by all registered businesses to report their tax obligations, including Goods and Services Tax (GST), Pay As You Go (PAYG) instalments, PAYG withholding tax, and other tax obligations. BAS reporting helps businesses track how much GST has been collected and paid, and it’s crucial for reconciling these amounts with the ATO. 

GST Reporting and Payment Cycles

Who Needs to Lodge BAS?

If you’re a business owner or sole trader with an annual turnover exceeding $75,000, you must register for GST and, consequently, lodge a BAS. For non-profit organisations, the threshold is $150,000. BAS lodgement frequency depends on your annual turnover:

  • Quarterly: For businesses with a GST turnover under $20 million (unless the ATO has asked you to report monthly).
  • Monthly: For businesses with a GST turnover of $20 million or more.
  • Annually: For businesses voluntarily registered for GST but with a turnover under $75,000 ($150,000 for non-profits).

Monthly BAS Reporting

Businesses required to lodge BAS monthly must do so by the 21st day of the following month. For instance, the BAS for July is due by 21 August. This cycle ensures that large businesses with significant turnovers remain current with their GST obligations.

Quarterly BAS Reporting

For most small to medium-sized businesses, quarterly BAS lodgement is standard. This schedule allows businesses to distribute their reporting obligations evenly throughout the year. Here are the quarterly BAS due dates for the financial year 2023/24:

  • Q1 (1 July to 30 September): 28 October 2023
  • Q2 (1 October to 31 December): 28 February 2024
  • Q3 (1 January to 31 March): 28 April 2024
  • Q4 (1 April to 30 June): 28 July 2024
Extensions for BAS Lodgements

Registered Tax Agents typically receive a four-week extension for lodging quarterly BAS (except for the December quarter, where an automatic deferral applies). For example, the due date for Q1 lodgement may be extended to 25 November when handled by a Tax Agent.

Annual BAS Reporting

Businesses with a turnover below the GST threshold ($75,000 or $150,000 for non-profits) that have voluntarily registered for GST, report annually. The annual BAS is due by the same date as the business’s income tax return, generally 31 October. If no tax return is required (e.g., first year of trading), the annual BAS is due by 28 February following the end of the financial year.

Changing Reporting and Payment Cycles

Businesses can request changes to their reporting and payment cycle to better align with their financial and operational needs. Implementing these changes early in the lodgement period is crucial for ensuring they take effect promptly. Waiting until the end of the period may result in a delay until the next quarter.

Dealing with Special Circumstances

Several factors can impact the lodgement and payment cycles:

  • Natural Disasters: The ATO may offer extensions or special arrangements during natural disasters.
  • Non-Business Days: If a payment or lodgement date falls on a weekend or public holiday, it shifts to the next business day.

Documents Needed for BAS

Completing your Business Activity Statement (BAS) requires meticulous record-keeping and organisation. Proper documentation is the cornerstone of accurate and efficient BAS lodgement, and it serves as a safeguard against errors and potential issues with the ATO. Below, we elaborate on the key documents you’ll need to assemble:

Sales Invoices

Sales invoices are crucial as they record all revenue generated by your business. Ensure that each invoice is correctly dated and numbered, and includes details about the goods or services sold, the amount charged, and the GST component if applicable. These documents help you calculate the total income and GST collected during the reporting period.

Receipts

Receipts for business purchases and expenses are equally important. They provide evidence of where your funds are being allocated, which is essential for claiming GST credits. Keep receipts for everything from office supplies and equipment to business travel and marketing expenses. Each receipt should clearly show the supplier’s details, the date, the items purchased, and the GST paid.

Expense Records

Detailed records of all business expenses help you track spending and manage cash flow. These records should categorically document all types of expenses, segregating them into categories like utilities, rent, salaries, and incidentals. Well-maintained expense records simplify the process of calculating GST credits and other deductible expenses.

Bank Statements

Bank statements offer a comprehensive view of your financial transactions and provide a way to cross-verify the information from your invoices and receipts. Regularly reconcile your bank statements with your internal records to ensure accuracy. This includes checking for any discrepancies and making adjustments as necessary to match your financial records with your bank account activities.

Payroll Records

If you have employees, you’ll need thorough payroll records. These documents should detail gross wages, superannuation contributions, PAYG withholdings, and any other relevant employee expenses. Proper payroll documentation ensures that you comply with tax withholding requirements and accurately report on your BAS.

Credit Card Statements

If your business uses credit cards for transactions, these statements will be part of your essential documentation. They provide an additional record of expenses and can help identify expenditures that might not have been captured elsewhere. Ensure that all entries are correctly categorised and reconciled with other documentation.

Petty Cash Records

For small, everyday expenses, petty cash records are necessary. Maintain a petty cash ledger that details each withdrawal, including the amount, date, purpose, and any GST component. Receipts should accompany entries in the petty cash ledger to provide a complete audit trail.

Tax Invoices

Tax invoices are special types of invoices issued for transactions where GST is charged. They include additional information such as the GST amount payable, and the supplier’s ABN. For transactions over $82.50 (including GST), a tax invoice is necessary to claim input tax credits. Ensuring you collect and manage tax invoices correctly will streamline your GST credit claims.

Inventory Records

If your business deals with stock, inventory records are indispensable. These records include details of stock levels, purchases, and sales. They help in calculating the Cost of Goods Sold (COGS) and ensuring accurate GST reporting on inventory.

Import and Export Documents

For businesses involved in international trade, import and export documents are also required. These documents provide details about goods that have entered or exited Australia and are necessary for correct GST reporting on such transactions. They include bills of lading, custom declarations, and any taxes or tariffs paid.

Financial Statements and Reports

Maintaining up-to-date financial statements, such as profit and loss statements, balance sheets, and cash flow statements, provides a holistic view of your business’s financial health. These reports not only facilitate accurate BAS reporting but also support strategic business decisions.

Properly maintaining and assembling these documents ensures that your BAS submissions are accurate and timely, reducing the risk of audits, fines, and penalties from the ATO. Accurate documentation not only saves time but also enhances the credibility of your financial reporting, ensuring your business remains compliant with all tax regulations.

Consequences of Not Lodging BAS on Time

Failing to lodge your BAS on time can lead to several serious repercussions that can impact your business both financially and operationally. Some of these are as follows.

Monetary Penalties

One of the most immediate and tangible consequences of late BAS lodgement is the imposition of monetary penalties. The ATO levies a Failure to Lodge (FTL) penalty whenever a BAS is not submitted by the designated due date. The amount of this penalty depends on the size of your business and the length of the delay.

Small Entities

The base penalty unit is currently set at $275, and small entities (with annual turnover less than $10 million) may incur one penalty unit for every 28 days that the BAS is overdue.

Medium Entities

Medium entities (with annual turnover between $10 million and $100 million) may incur two penalty units for every 28 days overdue.

Large Entities

Large entities (with annual turnover over $100 million) may incur five penalty units for every 28 days overdue.

These penalties can accumulate quickly, especially for larger businesses, stressing the importance of punctual lodgements.

Interest Charges on Unpaid Amounts

In addition to penalties for late lodging, the ATO imposes General Interest Charges (GIC) on any outstanding tax liabilities. The GIC is calculated on a daily compounding basis, which means that the longer you delay your payment, the more interest accrues. This can significantly increase the total amount owed and place additional financial strain on your business.

Interest charges are designed to encourage timely payment of tax obligations and compensate for the delay in revenue collection. Removing this liability as soon as possible is crucial for maintaining good financial health.

Legal Action from the ATO

Continued failure to lodge BAS can lead to more severe consequences, including legal action. If the ATO determines that your non-compliance is persistent or intentional, they may pursue further actions such as the following.

Garnishee Orders

The ATO can issue garnishee orders to your bank or other third parties to recover unpaid amounts directly from your accounts.

Director Penalty Notices

If your business is a company, directors may be held personally liable for the unpaid GST, PAYG withholding, and superannuation guarantee charge (SGC) amounts through Director Penalty Notices.

Legal Proceedings

In extreme cases, the ATO may initiate legal proceedings to recover outstanding amounts, which can result in court orders, additional legal costs, and, in some scenarios, enforcement actions like property seizures.

Impact on Your Business Operations

Beyond the immediate financial implications, not lodging your BAS on time can disrupt your broader business operations. Persistent non-compliance can lead to a myriad of issues. The ATO may place your business under increased scrutiny, resulting in more frequent audits and reviews, diverting time and resources from your business operations. Penalties and interest charges can affect your cash flow and financial stability, potentially impacting your business credit rating. Poor credit ratings can limit your ability to secure loans, obtain favourable credit terms from suppliers, and expand your operations.

Additionally, if you fail to lodge your BAS on time, you may be unable to claim GST credits on your business purchases. This can increase your overall tax burden, reducing profitability and impeding growth. Consistent non-compliance can also harm your business’s reputation with stakeholders, including investors, suppliers, and customers, potentially leading to a loss of trust and business opportunities.

Properly managing BAS lodgements is crucial for any compliant business in Western Australia. With the right knowledge and adherence to due dates, you can avoid penalties and ensure smooth operations. At Perth Mobile Tax, we specialise in guiding businesses through BAS requirements, ensuring timely and accurate submissions. Contact us today for expert assistance in managing your BAS.