The ATO’s New BAS Lodgment System

The ATO is introducing a simpler BAS lodgment system from 1 July 2017. This will apply to small business entities with a GST turnover of less than $10 million.

If you are a small business, you will only need to report:

  • Total sales (G1)
  • GST on sales (1A)
  • GST on purchase (1B)

The following GST information will no longer be required:

  • Export sales (G2)
  • GST-free sales (G3)
  • Capital purchases (G10)
  • Non-capital purchases (G11)

You are also no longer required to complete the GST worksheet.

This will not affect your GST reporting cycle – monthly, quarterly and annually. If you report annually now, you will continue to report annually after 1 July 2017.

What are the benefits?

Simpler BAS will reduce the complexity of GST record keeping and reporting, and doing so it will also reduce the compliance costs for the businesses. In accordance with this, accounting software will become easier to classify and code GST transactions.

What do you need to do?

If you are eligible, you don’t need to do anything as the ATO will automatically transition you. However, if your estimated annual GST turnover is $10 million or more, you will be required to use the full reporting method.

  • Online lodger: You don’t need to do anything to set up for Simpler BAS reporting. The ATO will automatically send you a BAS with requesting less information.
  • Paper lodger: You only need to complete Total sales(G1), GST on sales(1A) and GST on purchase(1B).

If you use accounting software – how and when should this be updated?

To access the full bookkeeping benefits of Simpler BAS, your accounting software will need to support Simpler BAS. You can check the Australian Business Software Industry Association (ABSIA) website to see if your accounting software supports Simpler BAS. Alternatively, your accounting software provider may contact you to instruct how to set up bookkeeping for Simper BAS.

You can update your accounting software in the lead-up to 1 July 2017, in preparation for Simpler BAS. For small businesses that reconfigure their accounting software before 1 July 2017, the ATO will accept BAS for periods prior to 1 July 2017 with only the following three pieces of GST information – Total sales(G1), GST on sales(1A) and GST on purchase(1B).

If you prepare and lodge the Business Activity Statements through a tax agent, you can also talk to your tax professional for Simpler BAS assistance.

If you are using the instalment method for GST reporting (< $10 mil turnover and pay GST instalments)

If your annual GST turnover is below $10 million and you currently report GST using instalments, you will continue to report using the instalment method.

Your quarterly BAS or instalment notice will not change. However, you will only be required to report the following GST information on your annual GST return:

  • Total sales (G1)
  • GST on sales (1A)
  • GST on purchase (1B)
  • GST instalment amount (1H)

You can also switch to a Simpler BAS instead of an instalment method by contacting the ATO. This will remove the need to lodge an annual GST return at the end of financial year.

Written By: Jasmine Lee