3 Reasons Your Small Business Need to Lodge a Business Activity Statement (BAS)
There are various financial obligations business owners need to partake in throughout their growth. Part of the most common concerns about tax preparations in your business is when to lodge a Business Activity Statement.
What is a Business Activity Statement (BAS)?
BAS is a form that you need to complete with information such as accurate and complete records of the collected sales of your GST and the expenses. Depending on the size of your business, you may need to fill it out once or twelve times a year.
Once your small business's gross income reaches $75,000, it becomes a legal requirement to lodge a BAS for GST-registered companies. You’ll know when a BAS is due to be lodged by the Australian Taxation Office (ATO) after registering for an Australian Business Number (ABN) and GST.
If your small business is practising a pay-as-you-go system, your BAS can be a reference for your business income tax, employee income tax, fringe benefits tax, luxury car, tax, wine equalization tax, and fuel tax credits. With that in mind, it’s in your best interest to keep an up-to-date account of your BAS each month or quarter, along with the following reasons:
Avoid Costly Penalties
Failing to lodge your BAS on time can lead to a series of expensive consequences, form multiple fines. For instance, small businesses need to pay $110 for each penalty set for 28 days, resulting in a total fine of $550.
The penalty doubles for medium-level companies, while enterprises or large corporations with more than $20 million turnovers will have to pay a whopping fives times the penalty unit.
Prevent Mistakes on a BAS
It’s easy to make a mistake, and while it’s all part of human nature, it can lead to further complications with your BAS. A small, missing information or mistake forces you to lodge a newly revised BAS, which can be time-consuming and wasteful to your resources. Not to mention, any errors on a BAS can also result in general interest charges on top of the penalties mentioned above.
Improve Employee Satisfaction
Ensuring your BAS is accurate and on track not only helps you have a full overview of your records, but it also helps create a PAYG withholding annual report. The report is best given once the payment summaries are delivered to your employees, resulting in a faster tax return for both parties.
The Bottom Line: The Importance of Hiring a Professional Account to Help You Lodge a BAS
The Business Activity Statement is responsible for providing commercial benefits for GST-registered small businesses. It can showcase a clear snapshot of the company’s financial position, allowing owners to stay on top of their performance, all while avoiding penalties.
Seeing as the process of lodging your BAS involves your financial records, bank statements, receipts, invoices, your GST spent on purchases plus earned on sales, and more, having an expert accountant plays a critical role in ensuring its all documented precisely and promptly.
If you’re looking for reliable accounting and bookkeeping services in Mermaid Beach to manage your Business Activity Statement (BAS), we’re the best accounting firm to call! Contact us at (07) 55041999 and see how we can help you!