Simplification offers relief

SMALL businesses are likely to get a much simpler Business Activity Statement form with the Federal Government hitting the panic button after Labor’s landslide win in WA.

Federal Treasurer Peter Costello has been reported as saying what can be done to simplify the form will be done and, if possible, changes will be made before the April form is due.

However, after a Federal Cabinet meeting on Monday it has become likely the Government is considering major changes to the BAS.

Tax Commissioner Michael Carmody is expected to field a much simpler form for the April BAS. But it is not known whether that means quarterly reporting will be scrapped for small businesses.

Institute of Chartered Accountants in Australia CEO Stephen Harrison said the Government had to move beyond “fine tuning” the BAS form.

“The recommendations for more fundamental change are now being put forward from various groups and the Leader of the Opposition...they are consistent with those recommended in November by the Institute,” Mr Harrison said.

The Institute suggested small businesses with a turnover less than $1 million and other taxpayers with low levels of investment or business income be allowed to lodge their BAS annually with their tax return rather than quarterly.

Their GST and other BAS tax obligations would still be paid quarterly but the payments would be based on either estimates of what they owe, based on the previous years or actuals where those amounts were readily available.

Mr Harrison said this would save 16.5 million man-hours that small businesses could devote to improving their productivity.

“It would also reduce administration for the ATO yet is unlikely to make a large difference to the tax revenue flowing to Government each quarter,” he said.

However, some sources believe the ATO is against such simplifications because it will reduce the mine of information it collects from the BAS.

An ATO spokesman said it was keeping an “open mind” about simplifications.

The number of businesses lodging their BAS before the February 4 deadline was up slightly on the previous period.

Both the November and February lodgement by due date rates of more than 93 per cent were better than the ATO received under the old tax system.

Tax agents still have until February 20 to lodge the remainder of their BAS forms.

Anecdotal evidence shows the BAS form is becoming easier to fill out.

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