The Business Activity Statement (BAS) has Changed
The Australian Taxation Office (ATO) has introduced a ‘Simpler BAS’ for Small Businesses (those businesses with a GST turnover of less than $10 Million) from 1 July 2017.
What does this mean?
The Simpler BAS requires less reporting of information to the ATO. Small businesses now need only to report the following GST Labels:
- G1 – Total Sales
- 1A – GST on Sales
- 1B – GST on Purchases
Therefore, reporting for the following labels is no longer required:
- G2 (Export Sales)
- G3 (GST Free Sales)
- G10 (Capital Purchases) and
- G11 (Non-Capital Purchases)
Pay As You Go Withholding and other items are still required.
Unfortunately, the amount of work required to calculate the underlying GST payable on sales (1A) and GST Input Tax Credits on Purchases (1B) is still required, so the time saved by preparing a Simpler BAS is nominal.
For those businesses with turnover greater than $10 Million, the BAS should not change.
The type of BAS required to be lodged should automatically be assessed by the ATO and businesses that had less than $10 million turnover in previous years should default to the ‘Simpler BAS’ reporting.
With less labels to make errors, how the ATO will choose to audit a business’ BAS in the future is yet to be seen. The records required to justify the amount of GST on sales and purchases will still need to be kept.
Should you have any question about how this will affect your business, please contact your usual Hanrick Curran advisor or alternatively Jamie Towers on 07 3218 3900.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.