Everything Businesses Need to Know About BAS Registration in 2024
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Running a business in Australia comes with many legal and financial responsibilities. One of the most important is registering for and lodging Business Activity Statements (BAS). Failing to meet your BAS obligations can lead to harsh penalties, so it’s crucial to understand what’s required. This comprehensive guide covers everything you need to know about BAS registration in 2024.
What is a Business Activity Statement (BAS)?
A Business Activity Statement, commonly referred to as a BAS, is a form that businesses use to report and pay certain taxes to the Australian Taxation Office (ATO).
Lodging a BAS involves:
- Calculating your business’ Goods and Services Tax (GST) liability
- Paying other tax obligations like Pay As You Go (PAYG) withholding and instalments
- Claiming fuel tax credits and GST credits
Essentially, the BAS allows the ATO to collect taxes and monitor business activity. Most businesses need to lodge a BAS regularly – the frequency depends on your annual turnover.
Who Needs to Register for BAS?
You need to register your business for BAS if you:
- Have an Australian Business Number (ABN)
- Are running an enterprise as a sole trader, partnership, trust, or company
- Have an annual turnover of $75,000 or more for GST purposes
Some enterprises are not required to register, including:
- Hobbyists earning under $75k per year
- Some non-profit organisations
- Businesses providing private recreational pursuits
Check if your business has to register by using the ATO’s registration tool. Input details like your business structure, industry, and expected annual turnover.
How to Register for a BAS
Step 1: Apply for an ABN
If your business doesn’t have an Australian Business Number (ABN), you’ll need to apply for one. This unique identifier allows you to deal with the ATO and other government agencies.
The ABN application process is free, fully digital, and takes around 20 minutes. Sole traders can instantly get their ABN, while companies and partnerships undergo additional verification checks.
Step 2: Register for GST
Once you have an ABN, register for GST by:
- Using the Australian Business Register’s online registration tool
- Lodging a paper form Add a new business account
You typically need to register for GST if earning over $75k per year. Some businesses can register voluntarily under this threshold.
When your GST registration is approved, you’ll get a confirmation letter with your start date – this is when your BAS obligations kick in.
Step 3: Add a New Business Account in myGov
Link your business to myGov to access ATO online services. Follow these steps:
- Sign in to your myGov account
- Select “Manage business account connections”
- Choose “Link a business” and enter your ABN and business details
- Confirm your account ownership through SMS or postal letter
Adding your business to myGov lets you lodge BAS online.
When Do You Need to Lodge Your BAS?
How often you must lodge and pay your BAS depends on the GST turnover threshold for your business:
- $75k-$15m annual turnover → Lodge/pay quarterly
- $15-$50m turnover → Lodge monthly, pay quarterly
- $50m+ turnover → Lodge and pay monthly
- Using a GST instalments system → Pay quarterly
Your first BAS period starts from your effective GST registration date determined by the ATO. You can request to align your BAS cycle with your business’ reporting period.
Check your due dates for lodging and payment through:
- The Business Portal
- The ATO app
- Your tax agent’s online services
It’s critical to know your lodgement and payment deadlines – late BASs incur penalties.
What if I Need to Cancel BAS Registration?
You may need to cancel your GST and BAS registration if your business is permanently closed or turnover drops under $75k per year.
Deregistering is important to avoid late lodgement fines. It also means you can’t claim GST credits.
You can cancel online via the Business Portal using your myGov ID. Make sure any outstanding activity statements are lodged before deregistering.
How is BAS Calculated?
Lodging your Business Activity Statement essentially means:
- Calculating your total GST payable
- Offsetting this amount with any tax credits you can claim
- Paying the net amount along with other tax obligations
Here is an overview of the key BAS components:
GST on Sales
- For GST registered businesses, you must pay 10% of most sales to the ATO
- Some sales may be GST exempt – check ATO guidelines on exempt supplies
- Multiply your total sales subject to GST x 0.10 to calculate GST on sales
GST on Purchases
- Claim credits for the GST included in business purchases
- Track GST paid using tax invoices from suppliers/vendors
- Your purchases may exceed sales – this nets GST refunds
- Quarterly prepayments of income tax based on past earnings
- Instalments contribute to your annual income tax bill
- Tax withheld from employee wages and paid to the ATO
- Withheld when employees are paid based on payroll frequency
By offsetting your GST collected (output tax) with GST paid (input tax) and other credits, you calculate your net BAS amount. If positive, this is paid to the ATO or used to offset further liabilities.
Steps to Lodge Your BAS
Want to take the stress out of meeting your BAS obligations? Consider automating lodgement and using an online accounting platform. Otherwise, follow these steps:
Step 1: Record Business Transactions
Throughout your BAS period, keep accurate tax invoices for:
- All taxable sales/income
- Purchases made to run your business
- Wages paid to employees
This provides the figures needed to complete your BAS.
Step 2: Calculate Your GST Liability
Once your BAS period closes, calculate your total GST payable on taxable sales made. Remember:
- Check which sales were GST exempt
- Only include B2B sales – no GST on private purchases
- Multiply by 0.10 GST rate
Compare this against GST credits you can claim on business purchases.
Step 3: Account for Other Taxes
On your BAS, also declare:
- PAYG instalments – prepayments of income tax
- PAYG withholding – tax withheld from employee wages
This allows the ATO to track taxes owed.
Step 4: Lodge Online
Sign into the Business Portal using your myGov account to lodge your BAS online. You’ll need figures from your GST and tax calculations.
The portal helps you:
- Complete your BAS form
- Submit payment for any net tax owing
- Claim fuel tax and other credits
Lodge by the due date – late fees apply for overdue BAS.
Penalties for Not Registering for BAS
Failing to register for BAS when required has serious consequences. Penalties of $170 per 28-day period apply for not registering on time.
Fines can escalate up to a maximum of $850 if non-compliance continues. The ATO also charges:
- Admin penalties – Further $1,050 for not registering despite ATO requests
- Shortfall interest charge (SIC) – Interest on unpaid GST
- General interest charge (GIC) – Extra interest if BAS paid late
Beyond financial penalties, further penalties can include prosecution for reckless BAS non-compliance.
Other consequences like being unable to claim GST credits or obtain an AUSkey for online access can also directly impact your finances.
Using a BAS Agent
With all the complexities around BAS, many businesses hire a BAS agent for help. These qualified professionals take care of:
- Calculating GST payable and other BAS components
- Preparing and lodging your BAS by the due dates
- Ensuring accuracy and compliance with ATO obligations
This saves you time while reducing risks around penalties and interest. Using an agent also means you can focus on higher priorities in operating your business.
To legally provide BAS services, agents must be registered with the Tax Practitioners Board (TPB). Check if your potential agent has:
- A current registration status
- Professional indemnity insurance
- Strong understanding of GST law and other ATO regulations
- Experience across your business type and industry
For hassle-free BAS help from qualified professionals, check out Edna’s accredited BAS agent training. The flexible online program equips you with everything needed for registration.
Lodging accurate and timely Business Activity Statements is a legal necessity for Australian enterprises. By registering your business for BAS through the ABN and ATO, you can meet your tax obligations.
Using the information in this guide, get up to speed on BAS registration rules for 2024. With strong reporting processes aided by software or BAS agents, your business can stay compliant and avoid unnecessary penalties. Reach out if any questions – happy to discuss BAS further!