Owning a business is like owning a car, and lodging a Business Activity Statement (BAS) is like checking your petrol gauge and refilling the tank when needed.
Just as your car won’t run without petrol, your business won’t run smoothly without staying on top of your tax obligations.
Keeping your BAS up to date keeps your business on the road without any unexpected breakdowns.
A BAS is a form used to report your business income, expenses, and tax obligations to the ATO.
As a sole trader, when do you need to lodge a BAS? And how do you do so? We’ve put together everything you need to know about BAS statements for sole traders in this guide.
When Do You Need To Register for BAS?
As a sole trader, you need to register for BAS in Australia if
- Your business has a GST turnover of $75,000 or more. GST turnover is the total income from your business (excluding GST included in customer sales) over a 12-month period.
- Your non-profit organisation’s annual GST turnover is $150,000 or more.
- You are a taxi or ride-sourcing (such as Uber) driver, regardless of your turnover.
You may want to register for GST voluntarily to
- Claim fuel tax credits for fuel you use in your business activities.
- Enhance your business’s reputation and credibility with clients and suppliers.
- Include GST in your pricing from the beginning, which can be simpler than adjusting your prices later when you exceed the threshold.
Not Just for Big Business! Why Sole Traders Need BAS
What are the benefits of BAS statements for sole traders?
- GST credits: You can claim credits for the GST included in the price of business purchases, reducing your overall expenses.
- Better business management: BAS reporting helps you track business income, expenses, and tax deductions. This regular process keeps your financial records accurate and enables you to make informed business decisions.
- Improved cash flow: BAS lodgment helps you monitor your GST liabilities and entitlements, aiding in better cash flow management.
- Business credibility: Being registered for GST and lodging BAS can show that your business is established and serious, potentially attracting more business.
- Access to contracts: Many businesses prefer to work with GST-registered suppliers, opening up more opportunities for contracts and partnerships.
- Compliance: Staying on top of your BAS obligations ensures compliance with the ATO, avoiding penalties and interest charges.
How To Lodge Your BAS
You can lodge your BAS through
- A registered tax or BAS agent
- The ATO’s “Online services for business” platform
- Your myGov account linked to the ATO
- Standard Business Reporting (SBR) software
- The mail, sending the ATO’s paper form to “Australian Taxation Office, Locked Bag 1936 Albury, NSW 1936”
DIY BAS Lodgement
If you decide to lodge a BAS yourself, follow these steps:
- Log in to your myGov account and link it to the ATO: Once signed in to myGov, select “View and link services”. Then select “Link” next to the “Australian Taxation Office”. Enter and confirm your details, then answer two questions to verify your tax record.
- Navigate to the ATO menu: Once you have access to the ATO from linked services, select “Tax”, then “Activity statements”, and “Lodge activity statement”.
- Fill out the “GST on Sales (G1)” section: Enter the total sales for the period, including GST. Exclude any sales not subject to GST (e.g., overseas sales).
- Fill out the “GST on Purchases (G10 & G11)” section: Enter the total amount of capital purchases (e.g., equipment) in G10 and the total amount of non-capital purchases (e.g., office supplies) in G11.
- Calculate GST payable or refundable: The system will automatically calculate your GST payable based on the amounts you enter. If you’ve paid more GST on purchases than you’ve collected on sales, you may be entitled to a refund.
- Fill out the “PAYG Withholding (W1 & W2)” section: Enter the total gross wages paid to employees in W1 and the amount of tax withheld from these wages in W2.
- Other reporting requirements: If applicable to your business, fill out the sections related to wine equalisation tax, luxury car tax, or fuel tax credits.
- Review the form: Check all the entered information carefully, as mistakes can lead to penalties, interest charges, and scrutiny from the ATO.
- Submit the form: After submitting, you’ll receive a confirmation receipt from the ATO.
- Keep track of lodgement due dates: BAS is generally lodged quarterly, but some businesses may report monthly. To stay on top of due dates, set calendar reminders or use accounting software.
- Make payment: The system will automatically calculate if you owe money, taking into account any prepayments or credits you might have. The confirmation screen will provide payment details, including the due date. If you’re entitled to a refund, it will be credited to your nominated bank account.
- Fixing mistakes on a previous BAS: If you need to revise a BAS you’ve already lodged, select “View or revise activity statements” from the ATO menu in linked myGov services.
Lodgement by a Registered BAS Agent
You may decide to hire a registered BAS agent to handle your BAS preparation instead of doing it yourself.
What are the benefits of having professional help?
- Expertise and accuracy: BAS agents are trained and experienced in handling complex tax requirements. They’ll ensure your BAS is lodged accurately and in compliance with ATO regulations.
- Minimised errors and penalties: Professional agents stay updated on the latest tax laws and regulations, reducing the risk of errors that can lead to costly penalties.
- Time-saving: Managing BAS can be time-consuming. A BAS agent can take this task off your hands, allowing you to focus on running your business.
- Peace of mind: Dealing with taxes can be stressful. An agent can manage your tax obligations efficiently, saving you stress.
- ATO liaising: BAS agents can communicate directly with the ATO on your behalf, handling any issues or queries that arise during the lodgment process.
Ready To Simplify Your BAS? Let GeekBooks Handle the Heavy Lifting!
While you can take care of the BAS process yourself, why not let an expert take this task off your hands?
Free up your time and experience the peace of mind a BAS agent can bring.
Just because you’re a sole trader doesn’t mean you have to do everything solo!
Here at GeekBooks, we take care of BAS statements for sole traders, including tax calculations, form formatting and submission, and liaising with the ATO if necessary.
Complete our online booking form today or call 02 9158 3591 to connect with one of our BAS experts.
FAQs
Do Sole Traders Do BAS Statements?
Sole traders must lodge BAS statements if registered for GST (their business has an annual GST turnover of $75,000 or more).
How Do I Prepare My BAS Statement?
Log in to the ATO portal through myGov to prepare and submit a BAS form.
Alternatively, you can engage the services of a professional BAS agent to prepare your BAS.
Can I Download a BAS Statement?
You can download a sample of a BAS in PDF form from the ATO’s website for the purpose of information only.
These sample forms cannot be lodged.