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A Business Activity Statement (BAS) is how you report and pay GST, PAYG withholding and PAYG instalments to the ATO. It isn't hard if your books are in good shape. The trouble starts when the records aren't.
Here's the process I follow when preparing a BAS, so you can do the same or know what to expect from your bookkeeper.
Step 1: Reconcile every bank and card account
Your BAS is only as accurate as the transactions behind it. Before looking at any GST figures, make sure every bank account, credit card and loan account is reconciled up to the last day of the BAS period.
Step 2: Check your GST codes
Scan your transactions for GST codes that look wrong. The usual culprits are listed below.
- Bank fees and insurance coded as taxable when they carry no GST
- Overseas purchases coded as GST-inclusive
- Personal spending coded as business expenses
- Sales to customers coded as GST-free when they should be taxable
Step 3: Confirm your PAYG withholding
If you have employees, the PAYG withholding figure on your BAS should match what has been withheld in your payroll reports for the period. If they don't match, find out why before lodging.
Step 4: Review the draft figures
Look at the GST on sales, the GST on purchases and the net amount. Compare them with the previous period. A big swing deserves an explanation, such as a large asset purchase or a missing invoice, before you hit lodge.
Step 5: Lodge on time
Quarterly BAS are generally due 28 days after the quarter ends, except the December quarter, which is due on 28 February. Monthly lodgers are generally due on the 21st of the following month. Registered tax and BAS agents may have longer lodgement dates for their clients, so check your own due dates with the ATO or your agent.
Step 6: Set money aside for the next one
A simple habit prevents most BAS shocks: move your GST and PAYG withholding into a separate savings account each time you get paid. Then the payment is already there when the BAS is due.
Final thoughts
If you'd rather skip all this, I can prepare and lodge your BAS from your reconciled books and send you a one-page summary to approve first.
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This article is general information only and doesn't consider your personal circumstances. Rules change, so please check with me or the ATO before acting on it.
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