REMINDER: Quarterly BAS Due Soon

Remember to lodge you fourth quarter Business Activity Statement (BAS) with the Tax Office by the 28th July.

If your business employs staff, you will need to make your quarter 4 superannuation guarantee contributions by 28 July also.

MYOB How-to: Set up BAS Information for GST

In addition to the GST, a business will report other obligations such as its income tax instalment, Fringe Benefits Tax instalment, PAYG Withholdings, Wine Equalisation Tax and Luxury Car Tax.

The BAS Information window is used to set up the main reporting options for GST.


Step 1:
From the top menu select Setup and scroll down to click Company Information.





Step 2:

Click on the BAS Info button at the bottom of the window. (Note: You can also change the existing
business address or contact details from the current area).





Step 3:

There are a number of options in the Bas Information set up and these are selected using the drop-down
arrows at the end of each selection field.


In the Goods and Services Tax section, select the reporting frequency, the accounting basis (cash or accrual), the calculation
method and the GST reporting option (1, 2 or 3).




Step 4 :
Now do the same in the PAYG Instalments and PAYG Witholdings section to select the options which apply to you.

Needless to say, it is important the BAS information and reporting options are set correctly and kept up to date if you are relying on them to prepare figures for the ATO.

For more MYOB how-to's and tips, visit our Tips and Tutorial Page.

July Lodgement Dates

14 July:

PAYG withholding payers must issue payment summaries to payees (ie employees and other workers).

Reasonable benefit limits (RBL) reporting – all RBL reportable benefits paid in June 2007 must be reported to the Tax Office on or before this date.

Superannuation benefits paid up until 30 June 2007 are still required to be reported for RBL purposes. The final reporting date for funds that are up to date with their reporting obligations should be 14 July 2007.

21 July:

June 2007 monthly activity statements: final date for lodgment and payment.

Quarter 4 (April – June 2007) activity statements containing a monthly GST obligation: final date for lodgment and payment. To ensure you receive the correct amount of credit in your income tax assessment, finalise all your PAYG instalments before you lodge your tax return.

Quarter 4 (April – June 2007) consolidated instalment activity statements: final date for lodgment and payment by a head company of a consolidated group.

28 July:

Quarter 4 (April – June 2007) activity statements: final date for lodgment and payment. To ensure you receive the correct amount of credit in your income tax assessment, finalise all your PAYG instalments before you lodge your tax return.

Quarter 4 (April – June 2007) instalment notices – forms R and T. Final date for payment and, if varying instalment amount, lodgment (two-instalment payers are also required to pay 25% of their PAYG instalment liabilities). To ensure you receive the correct amount of credit in your income tax assessment, finalise all your PAYG instalments before you lodge your tax return

Quarter 4 (April – June 2007) instalment notices – forms S and T. Final date for payment and, if varying instalment amount, lodgment (two-instalment payers are also required to pay 25% of their PAYG instalment liabilities).

30 July:

Superannuation guarantee contributions for quarter 4 2006–07(1 April – 30 June) are to be made to the fund by this date.

Terms of endearment # 5

PAYG Withholding: Pay As You Go Withholding is what was once called Group Tax and is the amount that must be withheld from employee's wages or salaries and sent to the ATO via the BAS.

At the end of the financial year what were once called Group Certificates have now been replaced by PAYG Payment Summaries. Each employee's gross income, and the amount withheld in tax, is recorded along with other information such as allowances, Reportable FBT amounts and Lump Sum Payments.

PAYG Instalments: Pay As You Go Instalments are amounts of tax payable for individuals who are not on wages or salaries and for companies or superannuation funds. It allows payment of tax ahead of time to be credited on a person or entity's tax return.

Tax Concessions for Small Business

From 1 July 2007, small businesses with turnover of less than $2 million a year will be eligible for a range of tax concessions under the Government's proposed changes to the law. Small businesses will also be able to pick and choose which tax concessions best suit their business.

It's important to find out more about the new tax concessions now if you are currently registered for GST because the proposed changes may affect the way you report and account for GST early in the 2007-08 income year.

Visit www.ato.gov.au/SBconcessions or give us a call to find out more.

Source: Activity Statement Update - Quarter 4 2006-07

Ye gads! My BAS is late!

It's a week past the BAS deadline and the form is still sitting on the kitchen counter... uncompleted!

What are you going to do?!!

Don't do what many tax payers do and stick your head in the sand. It won't go away!

The BAS has to be done, but don't make the situation worse or more expensive. The first thing that you need to do is contact the ATO and let them know that you are running late. If you make the first move, generally the ATO is fairly considerate and they will probably give you an extension of two weeks without hitting you with fines.

Make sure that you get it in within that time. Whether it's sitting at the kitchen table with a calculator and receipts completing the form yourself or getting a BAS provider or Accountant to do the BAS for you, the form must be lodged.

If this is an issue that tends to occur each quarter, consider nominating the GST instalment option. That way the actual calculation of the GST is not required until the lodgement of your tax return.

One common reason that I hear in regard to not lodging a BAS is that the return is complete but the client didn't have the money to pay it. My advice is always the same. Lodge the return, even if you don't have the money.

By not lodging you attract $110 fines every 28 days up to a maximum of $550... and this is an expense you can not claim against your business income. Even if you are charged interest in regard to the outstanding amount it will most probably be far less than the fines... and the interest is tax deductible!

If you find yourself in this situation, lodge the return and then contact the ATO to organise a payment arrangement. As I said before, if the ATO don't have to do the chasing then they are very reasonable in working with you to payoff the amount.

Keep in mind that from 1 July 2007 the compulsory income threshhold for BAS registration has risen from $50,000 to $75,000. So if your revenue (what you receive before any expenses) is less than $75,000 you may want to consider deregistering for GST.

Contact your Accountant or Tax Agent to discuss whether you may benefit from this.

Terms of endearment # 3

The ATO can send two different forms to certain taxpayers each quarter, both of which can cause confusion to those who receive them.

Business Activity Statement (BAS): The BAS is a composite form collecting figures on a variety of different taxes and rebates. This form is sent to companies, trusts, partnerships and individuals who operate a business in Australia.

The return obtains details regarding:

• Goods and Service Tax (GST)
• Pay As You Go Withholding Tax (PAYGW) - this is employee group tax
• Pay As You Go Tax (PAYG) - this is personal or company tax instalments
• Fringe Benefits Tax (FBT)
• Wine Equalisation Tax
• Luxury Car Tax
• Fuel Tax Credits

As you can see it covers a wide assortment of taxes primarily related to business activities of which an entity may have three or four at any one time.

Income Activity Statement (IAS): The IAS is sent to anyone receiving taxable income that does not have tax withdrawn through the year (either through PAYGW amounts from wages or PAYG instalments on BAS statements).

IAS statements are primarily sent to individual partners of a partnership, trust beneficiaries, sole traders who aren't registered for GST or employ anyone, self managed superannuation funds and individuals who receive income such as dividends, interest or positively-geared rental receipts.

Therefore partners of a partnership may receive a BAS in regard to the partnership if they are registered for GST or employ someone, and also each receive an IAS to obtain PAYG instalments for themselves personally.

Budget Highlights: Cutting Red Tape for Small Business

From 1 July 2007:

The annual turnover thresholds for registration for the GST is increasing from $50,000 to $75,000 for businesses.

This is great news for many small business who are heavily burdened with compliance obligations and mounting late fines.

From 1 July, qualifying businesses may elect to de-register for GST and save themselves the headache. Every situation is different so it is important to speak with your accountant before making this decision.

Any clients considering this should give Alan a call first to discuss it. He will be able to advise you if deregistering is the best option for you personally at this time.

Feel free to give our office a call on (02) 4390 4156 or email alan@lewistaxation.com.au.