Simpler BAS

The Government and the ATO have heralded this a big reduction in red tape for small business but for most it will be the dropping of one number only. The total purchases figure, which you will probably need to have calculated to work out how much GST you paid suppliers.

From 1 July 2017, Simpler BAS is the default reporting method for small businesses with a GST turnover of less than $10 million. They have less GST information to report on their BAS.

Small businesses only need to report:

  • G1 Total sales
  • 1A GST on sales
  • 1B GST on purchases

The following GST information is no longer required:

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

Simpler BAS does not affect how other taxes are reported (eg PAYG income tax instalments or PAYG tax withheld), or how often you lodge your BAS.

You still need to keep records, such as tax invoices, as proof of any claims you make in your BAS and income tax return lodgements.

This short video provides an overview of Simpler BAS.

ATO Warns Directors on Unpaid Super

In June last year, the government announced significant changes to the Director Penalty Regime.

At that time, the ATO’s powers were expanded to enable pursuit of PAYG and Superannuation Guarantee debts from directors personally in circumstances where such debts remained unpaid and unreported for more than three months past the due date for lodgement.

Until now, we have seen the ATO send warning letters for unpaid PAYG only. But from now on it will be issuing warning letters in respect of Superannuation Guarantee debts.

Most directors understand they may avoid personal liability for a company PAYG tax debt by ensuring their BAS returns are lodged within three months of the due date (whether or not the debt can be paid). However, they are generally unaware that if a company cannot meet its superannuation obligations then it is required to submit Superannuation Guarantee Charge Statementand if this occurs more than three months late, the directors can be held personally liable for the unpaid superannuation sum.

So what if you receive a Super Warning letter?

In general, we would suggest:

  • If there is a debt – Pay it! If the company is able, pay the debt in order to avoid personal liability (there are traps here so feel free to call to discuss with us.)
  • If the company is unable to payit must always lodge its BAS and Superannuation Guarantee Charge Statements within three months of the correct lodgment/payment date. By doing so, a director will receive the 21-day grace period to avoid personal liability for a company tax debt if ever a Director Penalty Notice is received (so long as it is acted upon within 21 days of the date on the notice).
  • If a company fails to lodge BAS and Superannuation Guarantee Charge Statements within three months of the due date, a director who receives a Director Penalty Notice cannot avoid personal liability for a company tax debt by placing their company into liquidation.
  • If returns are currently outstanding for more than three months and the company is unable to paycall Thomson Hall to discuss.

New laws for Tax Agents and taxpayers using them

The new legislative framework for tax agent services was first announced on 6 April 1998.

The Bill is designed to give effect to reforms to the registration and regulation of tax practitioners, including bookkeepers who provide a business activity statement (BAS) service for a fee.

The key elements of the regulatory reforms in this package are:

  • a national Tax Practitioners Board (Board) to replace the existing state based Boards
  • registration and regulation of entities providing BAS services as BAS agents
  • a legislated Code of Professional Conduct to govern tax agents and BAS agents
  • a wider and more flexible range of disciplinary sanctions which may be imposed by the Board
  • civil penalties and injunctions to replace criminal penalties for certain misconduct by agents and unregistered entities, and
  • ‘safe harbours’ which provide that, in certain circumstances, taxpayers who engage a tax agent or a BAS agent are not liable to certain administrative penalties that would otherwise apply for making a false or misleading statement resulting in a tax shortfall amount, or for lodging a document late.

The Government introduced the Tax Agent Services Bill 2008 into Parliament on 13 November 2008.