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What is a Business Activity Statement (BAS Return)?

Author: Mark Cunningham

Published: January 1, 2018

Categories: Tax

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Making sense of your GST and Business Activity Statement (BAS) obligations is not easy. Even the most seasoned business owners find it confusing. This article should help you understand what kind of BAS returns are suitable for your business and how often you need to lodge them with the Australian Taxation Office (ATO).

Business Activity Statements are used by business owners to report taxation activities to the ATO. If your business is registered for GST you are required to lodge BAS returns with the ATO. The ATO will send your BAS returns to you when it is time to lodge them.

Your BAS returns are used to report activity to the ATO on the following taxes:

  • Goods and Services Tax (GST)
  • Pay As You Go (PAYG) income tax instalments
  • Pay As You Go (PAYG) tax withheld
  • Fringe Benefits Tax (FBT) instalment
  • Luxury Car Tax (LCT)
  • Wine Equalisation Tax (WET)
  • Fuel tax credits

BAS returns are divided into sections called labels. The labels you need to complete for your business depends on your taxation activities and the type of BAS return you need to lodge.

Types of BAS Returns

The annual GST turnover of your business determines the type of BAS returns you should lodge. GST turnover is calculated in a different way to the turnover found on your Profit and Loss Statement. Put simply, GST turnover is calculated as your gross business income minus:

  • GST included in sales to your customers
  • Sales that are not for payment and are not taxable
  • Sales not connected with an enterprise you run
  • Input-taxed sales you make
  • Sales not connected with Australia

Once you have calculated your GST turnover you can determine what type of BAS returns you need to lodge with the ATO. The types of BAS returns are:

  • No BAS return
  • Simpler BAS return
  • Full BAS return

No BAS Return

If the annual GST turnover of your business is less than $75,000, you do not need to register for GST or lodge BAS returns. For non-profit organisations, the threshold is $150,000.

If your business fits within this threshold, you can volunteer to pay GST and lodge a BAS return once a year.

Simpler BAS Return

If the annual GST turnover of your business is $75,000 or more, you are required to register for GST and lodge BAS returns. If your business is registered for GST and its annual GST turnover is less than $10 million, your default return is the Simpler BAS.

The Simpler BAS reporting method requires less information to be sent to the ATO than the Full BAS reporting method. The labels required to be completed for GST reporting on Simpler BAS returns are:

  • G1 Total sales
  • 1A GST on sales
  • 1B GST on purchases

You may also need to complete the following labels if you have reporting or payment obligations for wine equalisation tax, luxury car tax or fuel tax credits:

  • 1C – WET payable
  • 1D – WET refundable
  • 1E – Luxury car tax
  • 1F – Luxury car tax refundable
  • 7D – Fuel tax credit
  • 7C – Fuel tax credit overclaim

Full BAS Return

If the annual GST turnover of your business is $10 million or more your default return is the Full BAS.

The Full BAS reporting method requires more information to be reported to the ATO than the Simpler BAS reporting method. The labels required to be completed for GST reporting on Full BAS returns are:

  • G1 Total sales
  • G2 Export sales
  • G3 Other GST-free sales
  • G10 Capital purchases
  • G11 Non-capital purchases
  • 1A GST on sales
  • 1B GST on purchases

You may also need to complete the following labels if you have reporting or payment obligations for wine equalisation tax, luxury car tax or fuel tax credits:

  • 1C – WET payable
  • 1D – WET refundable
  • 1E – Luxury car tax
  • 1F – Luxury car tax refundable
  • 7D – Fuel tax credit
  • 7C – Fuel tax credit overclaim

Frequency of Lodging BAS Returns

The frequency in which you are required to lodge BAS returns depends on the annual GST turnover of your business. As shown on the table below, this may be annually, quarterly or monthly.

From the table, you can see that if your annual GST turnover is less than $75,000, you can choose to lodge a BAS return once a year or not at all.

If your annual GST turnover is more than $75,000 but less than $20 million, you can choose whether to lodge BAS returns monthly or quarterly.

If your annual GST turnover is $20 million or more, you are required to lodge BAS returns monthly.

An important point to keep in mind is that the ATO may decide that you should lodge your BAS returns monthly even if you are eligible to lodge them quarterly.

Also, if you switch from lodging a Full BAS to a Simpler BAS, the frequency in which you lodge your BAS returns and report on GST will not change. If you previously reported monthly, you will continue reporting monthly.