Demystifying the BAS Myths

I get a 2-week extension to lodge my BAS return through my business portal, why should I use a BAS Agent?

Because with a BAS Agency you get FOUR WEEKS. That’s an additional two weeks that you could be making your money work for you, like reducing the interest charge on your overdraft.

 

What is the difference between cash and accruals for BAS?

For an accruals BAS you need to have received the invoice for expenses to be able to claim it. But you don’t have to have paid the invoice to include it in your BAS.

And this works in reverse also, sales made during that period are included whether the customer has paid you or not.

Cash method is when income and expenses are only included when the money is paid and received. If your business turnover is over $2 million you need to be on the accruals basis for BAS.

 

My BAS return always seems to be really high – how can I reduce this?

Money due on your BAS return is not your money. Most BAS returns have three types of tax GAST, PAYGW and PAYGI.

GST due is the difference between GST collected on sales and GST paid on purchases. This is purely a calculation so there is no way this can be reduced. In fact, often more is better, as this usually means you’ve made more profit. (subject to GST free income and expenses and wages paid)

PAYGW is the tax you have withheld from employee wages. Again this figure is a direct result of wages you have paid. The only way to reduce this is to pay less wages.

PAYGI is a calculated prepayment of income tax based on the last lodged income tax return. If your income is likely to be less in the current financial year this number can be reduced, however you do open yourself up to interest and penalties if this is underestimated. If you believe this to be the case we can discuss and revise along with advice from your tax agent.

For further clarification on any of these points please call our office today on 07 3355 6427. Feel free to share if your feel others would benefit.

 

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

Like us now on Facebook.

Follow us now on Twitter.

Connect with me on LinkedIn.

Visit our Website.


No Comments

Comments are closed.