BAS: Monthly or Quarterly?

Businesses have to lodge a business activity statement (BAS) monthly, quarterly or annually. How often you lodge depends on the size of your business (with reference to the various areas of taxation covered by the BAS, such as GST, FBT and PAYG withholding). Many businesses will have a choice between lodging quarterly and monthly, but for some there will be no choice.

If your business has an annual turnover of $20 million or more, or annual PAYG withholding obligations of between $25,001 and $1 million, you cannot choose the frequency of when to lodge your BAS and pay the various tax obligations. In the case of GST, you must report and pay it electronically, every calendar month.

The Tax Office may also require businesses with a turnover below this threshold to report monthly, but will notify them on a case-by-case basis. Businesses with an annual turnover of less than $20 million will report GST amounts quarterly by default, but can elect to report monthly if that suits.

When deciding how often to lodge your BAS, consider the effect (such as on cashflow) that some compliance obligations may have on your business. For example where your business may be entitled to a good amount of GST refunds, it may work out better for you to choose to report monthly. Then again, once you elect a monthly reporting period, you will need to stay with that for at least a year.

The general lodging frequency for the various ares of tax that may be listed on a BAS are as follows:

• PAYG and FBT instalments: Quarterly, but both can have annual reporting under certain conditions (see the drop-down menu on the left for separate articles on lodging for these taxes).
• GST: Quarterly, if annual turnover less than $20 million (can choose monthly, and if turnover less than $2 million can choose annually). Or monthly, if annual turnover $20 million or more. Also, for latter, businesses must lodge electronically.
• PAYG withholding: Quarterly, if annual obligations $25,000 or less (can choose monthly). Or monthly, if annual obligations more than $25,000 but no more than $1 million. Businesses with withheld amounts above $1 million a year must lodge electronically (and do so about one week after amounts withheld).

As you can see, smaller businesses will need to pay GST amounts every quarter, but there are three options for reporting:

• work out, report and pay quarterly, which you can do electronically
• the same as above, but with less information reported quarterly and further information reported annually in an annual GST information report
• pay an instalment GST amount quarterly but report annually.

The last option is only available if your turnover is less than $2 million a year. The amount of the instalment required is worked out by the Tax Office for you, and will be pre-printed on your BAS each quarter. You will be sent an annual statement to report GST liabilities for the whole year, and if the instalments already paid total more than the final liability, a refund will be due (or you may owe a bit more if the final figure is more than what you have paid by instalments).

Some businesses, like taxis, need to be registered for GST anyway, no matter how low turnover is. But they can’t lodge an annual report.

The payment due date for any tax obligations reported on a BAS are generally due on the 21^st day of the month after the BAS period ends (for example, for a BAS period ending March 31, the due date is April 21). However, there are extensions for taxpayers with quarterly GST obligations.

The following table provides a summary of the payment and lodgement dates for businesses that report and/or pay GST quarterly through their activity statement. If you have chosen to pay by instalments, these payments are also due on the dates shown.

If the due date falls on a weekend or a public holiday, you have until the next business day to report and pay.

If you are a primary producer or a ‘special professional’ (author, inventor, performing artist, sportsperson) you may be able to pay only two GST instalments for the year (due to the irregular nature of your income). Your instalments are then due on April 28 and July 28.

Source: Taxpayers Australia Limited