Make BAS time simple – understanding GST and BAS for small business

If you’re starting a business, setting things up properly now prevents problems down the track. As a business owner, it’s crucial you understand Goods and Services tax (GST) and Business Activity Statements (BAS) – that way you’ll be better able to manage your cash flow and tax obligations.

Register for GST

If you think your business will earn more than $75,000 in your first year, you must register with the Australian Tax Office (ATO) for GST. GST is a broad-based tax of 10% that’s charged on most goods and services sold in Australia. After you register for GST, your business will in most cases need to:

• include GST in the total price charged for goods and services
• claim credits for the GST you pay on the price of goods and services you buy for your business (you will need valid tax invoices).

Here’s a link to the ATO website to learn more about GST and here’s where you register your business (you’ll need an ABN to register). Even if you think you won’t earn more than $75,000 in year one, registering for GST means you can work with more customers. This is because many customers only work with GST-registered businesses.

If you’re unsure about your tax obligations consult with your accountant.

Learn more about your tax obligations as a small business owner.

Get ready for BAS

If you’ve registered for GST, your business will need to submit a BAS to the ATO. On your BAS, you’ll:

• report the GST your business has collected
• claim GST credits for the GST you’ve paid
• pay GST to the ATO if you’ve collected more than you’ve paid, or be due a refund if you’re owed money back.

Here’s a link to the ATO website to learn more about BAS. You can find the due dates for your BAS here so you can note them in your calendar. Read tips on how to get your BAS right.

Manage your cash flow

Set up your finances now to make it easy at BAS time. You don’t want to get to lodgement time after each quarter and find that you don’t have the money you need to meet your tax obligations. By setting aside what you’re charging in GST, you’re less likely to experience surprises or shortfalls at lodgement time.

Get a clear view of your finances and manage your cash flow by:

• Setting up a business bank account and linking it to your accounting software, such as MYOB or Xero. To help you get started, when  ANZ customers pay for one month with MYOB they get a bonus 11 months free. See offer.
• Setting up a separate BAS business savings account and regularly transferring over the GST that you’ve collected – to ensure you don’t get caught out at BAS lodgement time. You also earn interest and pay no monthly account service fees.*

GST and BAS checklist:

• Obtain an ABN and register for GST.
• Note the dates your BAS is due.
• Set up a business account (if you haven’t already).
• Explore setting up a business savings account (or squirrel account) so there are no surprises at BAS time.
• Think about taking advantage of ANZ’s MYOB offer to make business accounting and BAS time easy.