Below we’ll take you through this simpler reporting method.
Businesses that are registered for GST in Australia are required to lodge a Business Activity Statement (BAS) to the ATO, on a quarterly or monthly basis, in order to report and pay their GST liability (as well as PAYG Instalments, PAYG Withholding and other taxes as applicable).
For periods commencing from 1 July 2017, the government has brought in a new reporting method for small businesses which is known as Simpler BAS. Businesses with a GST turnover of less than $10 million annually are eligible and will be placed into the Simpler BAS method by default.
Under Simpler BAS the business is only required to complete 3 BAS labels in relation to GST -
The other 4 GST labels usually found on the BAS (in relation to export sales, GST free sales, and the value of capital/non-capital purchases) will no longer be required for entities under this system. This reduces the level of complexity of bookkeeping and reporting needed for GST purposes.
Note that businesses with a GST turnover of $10M or more will continue to report on all labels as before (which has now been dubbed by the ATO the ‘Full reporting method’).
This is a welcome move for small business owners as it cuts down on red tape and may help save on compliance costs. As accountants, we also appreciate the simplification as it means we can spend more time talking to our clients about growing and improving their business!
Depending on the accounting software package used by the business some configuration of tax codes/reporting may be required to take full advantage of this simplified reporting system.
Find out how this change might help to make your life as a small business owner easier! Get in touch with our team from BLG Business Advisors online or call (02) 4229 2211.