Good news for small business owners is that from 1 July 2017 the ATO is reducing the amount of information needed for the business activity statement (BAS) to simplify your GST reporting.
From 1 July 2017, Simpler BAS will be the default GST reporting method for small businesses with a GST turnover of less than $10 million. Simpler BAS is a partnership between the ATO, software developers, tax professionals and small business associations.
Eligible businesses will only need to report their (1) Total sales (2) GST on sales and (3) GST on purchases.
This will not change the reporting cycle, record keeping requirements, or how you report other taxes on the BAS.
Simpler BAS will make it easier to classify transactions and lodge activity statements and reduce the time small business owners need to spend on paperwork and form-filling without making changes that would impact the final GST amount.
Simpler BAS will not affect how other taxes are reported such as your PAYG income tax instalments or PAYG tax withheld, or how often you submit your BAS.
You still need to keep records, such as invoices, as proof of any claims you make in your BAS and income tax return lodgements.
The ATO will be automatically transitioning eligible small business' GST reporting methods to Simpler BAS from 1 July 2017. To help the transition, the ATO will email Clarke McEwan to advise whether clients are affected and how they can benefit from Simpler BAS.
Small business owners can choose whether to change their GST bookkeeping software settings to reduce the number of GST tax classification codes.
Before making any adjustments please talk to us at Clarke McEwan about whether reduced or detailed GST tax code settings are best for your business.