Thursday, August 27, 2009

Business Activity Statements

Business Activity Statements (BAS) are used by business's to report and pay a number of tax obligations, including GST, Pay As You Go (PAYG) instalments, PAYG withholding and Fringe Benefits Tax. This is the ATO's way of combining a range of taxes into one statement to make it easier for you to collect and report information and monies that are due to the ATO, making sure that none are forgotten.

The ATO will generally issue your activity statement around 2 weeks before the end of your reporting period. It will need to be completed and lodged by the due date which is set by the ATO, and any amounts owing will also need to be paid. It is important to keep a copy of your activity statement and the records used in the preparation of it for five years in case the ATO have any enquiries or choose to carry out an audit on your business and its books.

You activity statement is personalised to your situation and if your business has previously lodged a Business Activity Statement subsequent statements will include any options that you have previously included. Generally it will show the items that you need to report against, which could include:
• Goods and Services Tax (GST)
• PAYG Instalments
• PAYG Withholding
• Fringe Benefits Tax (FBT)
• Luxury Car Tax (LCT), and
• Fuel tax credits.

There are a number of ways that you can lodge your BAS. It can be lodged online, through your accountant, via mail or over the phone. If your BAS is not lodged on time you may be subject to a failure to lodge penalty (FTL). If you are late in lodging your BAS, for every 28 day period (or part of) that you failed to lodge you can be charged $110; however, you can not incur charges that exceed $550. NB: the penalty is x2 if your business turns over more than $1 million but less than $20 million, and x5 if you turnover more than $20 million.

If the BAS you submit contains information that is not correct, the least you will be charged - in the case of a genuine mistake, is general interest on the underpaid tax or extra credit received. If however, the mistake was attributable to carelessness or purposefully ignoring the law, you will be charged a penalty based on a percentage of the shortfall amount in question - the exact percentage charged will be dependent on the reason for the incorrect amount.

Important Dates:
You can lodge your BAS either monthly, quarterly, or annually. The following is important dates you need to know in relation to the lodgement and payment of your BAS:

• Monthly: The 21st of every month for the period just gone.
• Quarterly: The 28th of the following months - October, February, April, and July. (In the case of a lodgement/payment being due on a weekend or public holiday, it is due by the next business day.)
• Annually: (pertaining to GST Return): Is sent out after the fourth quarter BAS, and needs to be lodged by either the 28 February, or before your yearly income tax return is due, whatever comes first.

Refunds:
The usual outcome of a BAS being processed is either a refund (from the ATO), or you will owe them money (in relation to your tax collections). When it comes to your refund, sometimes the ATO will keep some or all of it. Their basis for this can include:

• You have a previous outstanding tax debt owing to the ATO,
• Information provided in your BAS needs clarifying,
• You failed to nominate a bank for the payment to go to, or the information you gave the ATO regarding that account was incorrect,
• You forgot to lodge one of your BAS, etc.

In order to avoid late or incorrect lodgment and to ensure that you are getting the maximum tax that is legally due to you it is recommended that you have an accountant or tax agent prepare and submit your Business Activity Statements. This also gives you more time to worry about the day-to-day running and growth of your business.

Should you have any queries, require assistance with your Business Activity Statement or would like more information please contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.

The Quinn Group is an integrated, accounting, legal, and financial planning practice offering expert advice to help you achieve your business and personal goals. With more than 15 years' professional experience, we are committed to building long-lasting relationships with our clients by providing superior service in a timely and cost-effective manner. For more free advice please visit Corporate Lawyers.

Article Source: http://EzineArticles.com/?expert=Michael_John_Quinn

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