Tax

Simplified BAS and the ATO’s Offer for New Small Businesses

simpler-basThe ATO has recently announced that they are working towards reducing GST compliance costs for small businesses. The change comes as a result of listening to the concerns of small businesses, software providers, tax professionals and industry associations.

According to the ATO, they are “reducing the amount of GST information required for the business activity statement (BAS) to simplify GST bookkeeping and reporting requirements”.

They state that “a simpler BAS will give small businesses time and cost savings by simplifying account set up, GST bookkeeping and BAS preparation. Businesses will be able to more easily classify transactions and prepare and lodge their BAS”.

So, from 1 July 2017 small businesses will only need to report GST information on their BAS relating to:

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

The following reporting requirements will be removed:

  • Export sales (G2)
  • Other GST free sales (G3)
  • Capital purchases (G10)
  • Non-capital purchases (G11)

The aim of a simpler BAS is to support greater use of existing automation as well as potential digital solutions that are developed.

Testing has commenced on the proposed changes to ensure that the ATO “get it right”.

New Small Business Offer

It has also been announced by the ATO that from 19 January 2017, newly registered small businesses will be given the option to report less GST information on a simpler BAS.

If you are a small business registering for GST, you will need to do the following:

  • If “quarterly” GST reporting cycle is selected when registering for GST, you will need to select “Option 2: Calculate GST quarterly and report annually” on your first BAS.
  • If a “monthly” GST reporting cycle is selected at registration, then you can insert “0” at G2, G3, G10 and G11 on your BAS.
  • If an “annual” GST reporting cycle is selected at registration, you can leave G2, G3, G10 and G11 blank on your Annual GST Return.

This will provide a simpler BAS reporting solution and the ATO has said that they “will not be seeking the additional GST information or lodgement of the Annual GST Information Report”.

If you have any queries regarding these changes, or any other aspect of your BAS, then please give us a call. You can also read more about penalties when preparing your own BAS here.