19/11/2015 - 06:52

Simplified BAS process a positive step

19/11/2015 - 06:52

Bookmark

Save articles for future reference.

Many small business owners find the time taken to submit their BAS significantly detracts from their ability to perform their principal role – running the business.

CRUSHING RESPONSIBILITY: Tax compliance is a major headache for small business operators. Photo: iStockphoto/Sturti

Many small business owners find the time taken to submit their BAS significantly detracts from their ability to perform their principal role – running the business.

THERE’S no doubt business activity statements aren’t working well for businesses. They might be for the Australian Taxation Office, but not for the rest of us.

New figures show 600,000 businesses lodged their BAS late this year.

This comes as no surprise. Quarterly deadlines are putting time-poor business owners under pressure when they need to be working to make an income. 

In my view, BAS need to be lodged only twice a year. That would ensure the paperwork doesn’t get out of control and should take less time.

However, as far as simplifying the process is concerned, it seems the ATO is going in the opposite direction; there is even a suggestion the tax office is moving towards businesses reporting payroll data fortnightly, thereby increasing the burden even further.

Goods & Services Tax

An overhaul of the GST is long overdue. Admittedly, any change will prove to be a red tape nightmare, but it should prove beneficial in the long term.

No-one wants to be taxed more, but if there are going to be changes to the GST it will be more efficient at 15 per cent.

This view is supported by the experiences across other jurisdictions, with the GST, or Value Added Tax, in most countries at 15 per cent or higher. There is also a need to remove all GST exemptions to make it
easier for businesses to report on their BAS.

For instance, the reporting requirements for a restaurant in terms of GST-free and GST-taxable amounts on the BAS are particularly onerous, particularly in terms of time spent away from running the business.

Registered on not?

There also needs to be clarification as to when a business should or shouldn’t register for the GST.

I’m seeing businesses registering for the GST when they don’t need to, and other businesses not GST registered when they should be.

One client came to me after receiving tax fines totaling $140,000 for failing to lodge BAS because they simply didn’t realise they had to.

If a business earns more than $75,000 per year, it must be registered for GST and charge customers accordingly, yet many don’t and get caught out.

Businesses are also struggling with the ATO’s move online; beware … your BAS is no longer posted out and may instead be hiding in an e-mail spam folder.

If businesses do have a question when lodging their BAS, they have no other option but to phone the ATO. Again, this is time consuming and takes the business owner away from their core role.

The ATO needs to install instant messaging as a matter of priority, so if a taxpayer has a quick question, they can open a chat box on their screen and ask a tax official.

Here are some of the changes I’d like to see made to the BAS.

Lodgment dates

BAS should be lodged every six months instead of every quarter, to reduce the burden on small business.

Communication

Improved systems are needed to ensure businesses actually receive their BAS.

Support

Instant messaging as an alternative to phoning the ATO for quick questions; this would significantly speed up the process.

Incentives

Financial rewards have worked in the past to encourage businesses to lodge their BAS on time.

I think if you ask any small business owner if they’d like to lodge their BAS just twice a year instead of four times, they’d eagerly say ‘yes’.

 

Warren Kruger

Taxwise Australia

www.taxwiseaustralia.com.au


STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options