BAS: acid test for accounting systems

IT IS already one month since the introduction of the GST and, for those businesses lodging monthly business activity statements, the deadline is drawing close.

However, the Australian Tax Office has given some monthly reporters an extension.

Normally, businesses would need to have a BAS lodged with the ATO by the 21st of each month.

Businesses entitled to lodge and pay quarterly for GST but who elected to lodge and pay each month will have until September 4.

Their next BAS will be due on September 28 – a further week’s extension. After that, those businesses revert to the 21st of the month deadline.

There is no extension for large businesses and those required to lodge and pay GST each month or with-holders not in the first category who are required to pay each month.

Rough figures from WA have 50,000 businesses lodging monthly and 250,000 lodging quarterly.

Jackson McDonald tax consultant Graham Harrison said the report would be the “acid test” for the accounting systems businesses had installed.

“For example, businesses will not be able to claim input tax credits until they have a valid tax invoice in their hands,” Mr Harrison said.

“I think it will take a couple of cycles before business gets it right.”

Mr Harrison said the BAS would become a crucial reporting mechanism to the ATO.

“For the first time, the tax commissioner will get trading reported to him as it happens,” he said.

Small Business Development Corp-oration managing director George Etrelezis said many small businesses had not yet grasped the Pay As You Go system.

Mr Etrelezis said the PAYG provisions could give some businesses a cashflow concern. For the first time, businesses will remit income tax monthly or quarterly, depending on the lodgement regime they chose.

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