Published on 22/06/2016 by Punchmedia

EOFY: A Big Time for Small Business - The BAS

In our next installment in the EOFY: A Big Time for Small Business series we look at the BAS (Business Activity Statement) and what small businesses need to take on board as the new financial year approaches. With the federal election just around the corner, it's important to note that one of the biggest proposed changes by the Federal Government is to simplify the Goods and Services Tax (GST) component of the BAS for businesses with less than $10 million in annual turnover. As most business owners would know, the BAS is the form submitted to the Australian Taxation Office (ATO) by all Australian businesses to report and pay a variety of tax obligations. Simpler BAS, as the proposed change has been named, would be the biggest change to the BAS since the GST was first introduced in 2000.

What Does the Change Involve?

The overriding purpose of the BAS when it comes to GST is to report the amount collected from sales and the amount paid on purchases. The resulting net amount is the primary figure the ATO is interested in. For this reason, the government has proposed removing several GST reporting labels: "export sales", "other GST-free sales", "capital purchases" and "non-capital purchases". With those removed, a business owner will only be required to report "total sales", "GST on sales", and "GST on purchases". This will allow a small business owner to deliver the all-important net figure that the ATO is most interested in seeing, without having to concern themselves with inputting too many other different figures. For SME owners who complete their monthly or quarterly BAS on their own, these changes will undoubtedly be welcomed. Any way to simplify the administrative side of running a business is likely to come as an enormous relief, especially when it comes to ATO obligations.

What to Be Aware Of - Accounting Software

Simpler BAS is proposed to come into effect from July 1, 2017. This will give SME owners ample time to familiarise themselves with their new obligations. But whether accounting software companies can implement the changes within their products hasn't necessarily been taken into account. What also hasn't been addressed is what the change will mean for the thousands of small businesses which still operate an old desktop version of their accounting software. As a result, business owners who rely on accounting software that isn't updated for the change on time may find themselves non-compliant, and facing fines. The best way around this is to enquire with your provider. Find out whether they will be ready by July 2017. If not, it may pay to switch to a provider ahead of time who will be ready for the change. For more information around proposed small business tax changes visit the Australian Taxation Office website. * Written with an AFR contributor

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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