Keeping your Business Activity Statement (BAS) active and up-to-date every month or quarter is essential. Your BAS is related to your PAYG, GST and other taxes. So, knowing what’s going on in your BAS every month and keeping it accurate only makes sense. Here’s why:
Avoid Huge Penalties
Tax offsets are only granted to those who truly need them. They are based on the amount on your taxable income and your tax payable. Non-refundable tax offsets like these can lower your tax payable to zero if used, but this will not be granted if not filed for.
As for other deductions on your income, offsets also can’t reduce your Medicare levy and Medicare Levy Surcharge, if you have any. In addition to the tax paid on your taxable income is 2 per cent of the Medicare levy.
How to Claim Low and Low to Middle Tax Offsets
When you don’t meet the deadline for your BAS on time, you are subjected to pay fines. The fines will depend on the size of your business. Even if you think you only run a small business, you will still be charged. In fact, there’s a range of penalty fees for different business sizes:
- Small business: One penalty unit at $110 for each set of 28 days with a maximum of $550 in fines.
- Medium business: Faces double the penalty.
- Big businesses: Penalty is five times the penalty unit. If it’s a major global business, it’s 500 times the penalty.
With those hefty fees, you surely don’t want to miss anything when it comes to your BAS; therefore, pay and submit it on time to avoid any significant losses.
Get Your Refunds on Time
When submitting a BAS, your company will either owe money or be owed money. However, if you have a tax debt or fail to fill out all necessary information, you will withhold the refund.
This is inconvenient and something that you don’t want to get through. That’s why you need to submit all necessary information and make sure it’s updated so you don’t need to go through withheld tax credits.
Avoid Mistakes on BAS
A mistake on your BAS means you need to lodge a new revised BAS. With that, you’re going to need to take some time out of your busy schedule to do this. Plus, you’re going to have to deal with the wasted resources. When you have an up-to-date BAS, you prevent costly mistakes.
Track Your Business
Doing BAS translates to excellent record-keeping. It involves logging fees, sales, expenses, wages and costs. When you keep up-to-date and provide accurate reporting, you will have access to the overall state of your business. In turn, you can use the information to set budgets and make accurate predictions based on how you did your previous BAS.
Create a More Accurate PAYG Withholding Annual Report
In your BAS, you need to declare all PAYG withheld amounts. Then, you need to pay the withheld tax to the ATO. When you have an accurate BAS, you will find it easiest to create a PAYG withholding annual report.
That’s why you need to aim to lodge the report after you give employees their payment summaries. The faster you submit it, the quicker they can file out their tax return.
Accurate BAS is crucial to your company and employees. Therefore, you need to ensure it is up-to-date. That way, you can prevent any significant losses and inconvenience along the way that could adversely impact your business. All these accounting-related concerns shouldn’t rest on your shoulder alone. Work with an accountant you can trust to ensure the accuracy of your BAS.
Let a reliable accountant in the Gold Coast help you out. Here at New Wave Accounting, we offer end-to-end accounting and bookkeeping services that can scale and grow businesses. Contact us today!