How to Do a BAS Statement and Lodge It

Whether you are a current or aspiring business owner, the question of how much tax your business needs to pay may cause you many sleepless nights. The Business Activity Statement (BAS) is oftentimes at the centre of concerns. We are here to give you peace of mind and answer all the questions our big and small business clients ask us on a frequent basis, including who needs to register for BAS, how to lodge and benefit from it.

As a business owner, you’re in good company: As of June 2024, there are over 2.5 million small businesses registered nationwide. If this is your first entrepreneurial venture, there is usually a lot of learning involved. From acronyms to paperwork, there’s more to a business than just generating an income to pay the bills and save money for the next vacation.

What Role Does the Business Activity Statement (BAS) Play in Your Business Success?

The Business Activity Statement is a record that is completed upon lodging a tax return and then sent to the Australian Taxation Office.

You need to register for GST if your business has an annual turnover of $75,000 or more, excluding GST, or $150,000 for not-for-profit organizations. This registration is mandatory once your income exceeds these thresholds, and you must register within 21 days of reaching this point. 

Some businesses, such as ride-share drivers, taxi operators, and others earning income through fares, are required to register for GST regardless of turnover. Additionally, if you run a business that involves fuel tax credits, wine production, or the sale of luxury vehicles, GST registration may be necessary to comply with industry-specific tax obligations.

PAYG Withholding: If you employ staff or engage contractors, you may need to withhold and remit PAYG tax to the ATO. This applies if you have employees or pay contractors primarily for their labor.

Fuel Tax Credits:  Fuel tax credits provide businesses with a rebate for the fuel tax included in the cost of fuel used for business activities. This applies to industries such as: Transport; Agriculture, forestry, and fishing and Construction and mining.  Businesses claiming fuel tax credits must lodge BAS to report eligible fuel usage and claim applicable refunds.

Other Industry-Specific Taxes:  Certain businesses must report additional taxes on their BAS, including:

• Wine Equalisation Tax (WET) for wine producers.
• Luxury Car Tax (LCT) for businesses selling luxury vehicles.
• Tourism-related taxes for applicable operations.

By ensuring on-time and accurate BAS lodgment, businesses stay compliant with ATO regulations and take advantage of eligible tax credits.

Don’t worry, it’s not all up to you. When you register for an Australian Business Number (ABN) and GST, the Australian Taxation Office (ATO) will automatically inform you when a BAS is due to be lodged.

A large part of BAS is directly related to the GST. When you complete a BAS lodgement, you are reporting the Goods and Services Tax amount you’ve collected on your sales minus any that you’ve paid on your purchases, with the difference being your refund or what you owe to the ATO. Businesses must also report other taxes, such as the Wine Equalisation Tax, if relevant to their operations.

Benefits of Early GST Registration

Even if your business turnover is below the $75,000 threshold, registering for GST can provide several advantages. It allows you to recover GST on business-related expenses, including start-up and capital costs, which can be particularly beneficial for new businesses making significant initial investments. Additionally, being GST-registered can enhance your credibility, making your business appear more established and professional to clients, which helps build trust and attract larger contracts.

Early registration also simplifies record-keeping by encouraging consistent tracking of income and expenses, making future reporting and compliance easier. Importantly, registering early ensures you avoid the risk of fines and interest charges that can arise from delayed registration once you exceed the GST threshold.

Now that you know what the BAS is all about, let’s take a closer look at how a small business is impacted by tax returns and how it can profit from them. This may surprise you, but small businesses oftentimes have more of an advantage when it comes to paying tax, as opposed to large corporations.

Tax Benefits Of A Small Business

Being your own boss is one of the perks of running a business. You will also be able to take advantage of various tax credits and deductions that are aimed at supporting the small business owner. Reduced educational costs, travel expenses and building repairs are just examples. Small businesses can claim fuel tax credits by reporting eligible fuel usage on their BAS form.

There is only one requirement: You must have the proper records showing how these expenses relate to your business operation. An experienced bookkeeper can help you keep track of all transactions, costs and generated income and produce financial statements.

Two examples of small business tax perks:

HOME OFFICE

Having a home office pays off: As a small business owner running operations from the comfort of your home, you’re able to deduct portions of your yearly utility costs for electricity, water, cable, telephone and even internet bills.

TRANSPORTATION COST

Most small businesses will rely on a car, be it to transport goods or visit clients. The cost of operating a car is also tax-deductible. The key is, once again, keeping proper records to prove business usage. Creating a logbook of how many miles you drive to client sites and other places is the first step. The current rate is 88 cents per kilometre for 2024. Refer to the ATO website for mileage rates, as they change often.

Small Business Equipment and What you Can Claim

You can claim back GST on products used to conduct business, even if your own product or service is GST-free. Understanding what you can claim helps you accurately pay taxes and avoid penalties. Here is a short list of some of the things you can claim.

Claimable items can include:

• Work Tools: Anything from computers, printers, internet security to sophisticated software, home office expenses and stationery
• Consultants: Services you used such as advertising, marketing and the cost of advertising, but also bookkeepers and accountants and their services etc.
• Assets: Any item of value owned by the company, which can be both physical or intellectual property.
• Fees and Bills: Bank fees, phone, internet, electricity and water bills, insurance premiums, legal fees and even rent
• Travel: Business motor vehicle usage, including luxury car leases, business travel expenses including cost for flights and hotels, parking cost
• Work Clothing: Protective clothing, necessary outdoor gear
• Education: Technical or professional qualifications
• Employees: Salaries, wages, bonuses or allowances, super contributions for employees, and some contractors paid primarily for their labour

Key Steps to Prepare & Lodge Your BAS

Preparing your BAS statement requires gathering sales and purchase records, GST registration documents, PAYG withholding records, and fuel tax credit records. You’ll need to calculate your GST amounts for sales and purchases to determine the GST collected and claimed.

The ATO makes the process of lodging your BAS relatively painless, but there is still some work to be done. The good news is that you can lodge your BAS online in a few simple steps. You can submit the statement using your online accounting software, through your myGov account (only for Sole Traders), via the ATO’s online services for business, or by having a registered tax or BAS agent.

Make sure to include other tax obligations such as PAYG withholding, fuel tax credits, and luxury car tax if necessary. Proper preparation of your BAS statement not only helps you meet your tax obligations but also provides a clear picture of your business’s financial health.

1. Collect Essential Records

The ATO requires businesses to maintain detailed and accurate records to complete BAS, including:

• Sales Records: Tax invoices, receipts, cash register tapes, and credit card/bank statements showing income.
• Purchase Records: Tax invoices, receipts for cash expenses, purchase orders, and credit card/bank statements for business-related purchases.
• Fuel Records (if applicable): Evidence of fuel purchases, usage logs, and calculations of eligible business fuel use.

Minimum ATO Requirements: Records must clearly identify GST collected and paid, separate business and private expenses, and include valid tax invoices for claims over $82.50 (inclusive of GST).

2. Calculate GST and Other Obligations

• Determine GST collected on sales.
• Deduct GST paid on purchases to calculate your GST liability or refund.
• Include PAYG withholding, fuel tax credits, or other industry-specific taxes where applicable.

3. Choose Your Lodgment Method

• Online: Use accounting software, the ATO Business Portal, or myGov for sole traders.
• BAS/TaxAgent: Simplify the process by having a registered BAS/Tax agent like Shoebox Books & Tax manage lodgment on your behalf.

4. Retain Records

• Businesses must keep all receipts, invoices, and relevant records for five years from the date the record was prepared or the relevant transaction occurred, whichever is later. These records may be requested by the ATO to verify claims.

5. Lodge and Pay on Time

• Submit your BAS by the due date to avoid penalties. If you can’t pay in full, set up a payment plan with the ATO.  Shoebox Books & Tax can help you with this!

Learn more about the lodgement process on the ATO business activity statements page.

Why Accuracy Matters

Accurately lodging your BAS ensures compliance with the ATO while positively impacting your business. By providing precise information, you:

• Avoid penalties or audits from the ATO.
• Maximize refunds, such as GST credits and fuel tax credits, improving cash flow.
• Maintain a clear and reliable financial picture to support business growth.

Accuracy also builds confidence with financial institutions, customers & suppliers, positioning your business as professional and trustworthy.

BAS Due Dates to Keep in Mind

You should take lodging and paying your taxes in a timely manner very seriously. When and how to pay your taxes are displayed on your business activity statement. Should the due date fall on a weekend or public holiday, you have until the next business day to lodge and pay. 

We recommend setting calendar reminders on your phone for lodgment key dates, using the ATO app. A registered tax or BAS agent can help you lodge your activity statements. Tip: If you lodge online, you’re eligible for an extra two weeks to lodge and pay your quarterly BAS.

Goods and Services Tax (GST) reporting and payment cycles

• Quarterly: For GST turnovers under $20 million.
• Monthly: For GST turnover of $20 million or more.
• Annually: Voluntarily registration with a GST turnover under $75,000 or $150,000 for not-for-profit bodies.

For more information, read our article on the key BAS due dates for this financial year.

In a Nutshell: Successfully Lodging Your BAS

Remember, you only need to lodge a BAS when you have registered for GST. And you are only required to register for GST, when your business’ expected gross income (excluding the GST of 10%) is equal to or more than $75,000.

Don’t forget to:

• Collect receipts and invoices for business transactions as well as receipts and invoices for any cash transactions
• Use separate bank accounts for private and business purposes
• Be aware of payment cycles and due dates that apply to your business
• Make sure you pay what you owe on time or make arrangements with the ATO for a payment plan
• Consult a registered tax agent if you are struggling

Partner with Shoebox Books & Tax for Hassle-Free BAS

Preparing and lodging BAS can be complex, especially with evolving tax laws and multiple reporting obligations. Shoebox Books & Tax specializes in helping small businesses navigate these challenges with ease.

Since 2007, Shoebox Bookkeeping has been assisting many small business owners with their affordable tax packages, giving every small business owner peace of mind knowing they are supported by like-minded people. Here’s how we can support you:

• Ensure all GST, PAYG, and credit claims are accurate and compliant.
• Save you time by handling BAS preparation and lodgment.
• Offer expert advice on maximizing cash flow and tax benefits.

Contact Shoebox Books & Tax today to simplify your BAS process and focus on growing your business with confidence!