Written byA business activity statement (BAS) is the form a GST-registered business lodges with the ATO, usually quarterly, to report and pay GST, PAYG withholding and PAYG instalments.
Also known as: BAS, activity statement, BAS statement, quarterly BAS
Key points
- The GST section nets GST collected on sales against the input tax credits on purchases; the difference is paid or refunded.
- A business not registered for GST but in the PAYG instalment system lodges an instalment activity statement (IAS) instead.
- Lenders read BAS as a near real-time record of turnover: low doc finance often asks for recent statements in place of full financials.
- Late lodgement attracts penalties, and unpaid BAS debt can be reported to credit bureaus, which narrows a business's finance options.
What a BAS reports
The statement is a set of labelled boxes. The GST labels capture total sales, the GST collected on them and the GST paid on purchases backed by a tax invoice. The PAYG withholding labels report wages paid and tax withheld. The PAYG instalment labels record the prepayment of the owner's or company's income tax. Depending on the business, FBT instalments, luxury car tax, wine equalisation tax and fuel tax credits appear too.
Most small businesses lodge quarterly, with the due date printed on the statement about four weeks after the quarter ends. Larger businesses, and any that choose to, report GST monthly, and some very small ones report annually.
Lodging and paying
You lodge through the ATO's online services, through accounting software that connects to the ATO, or through a registered tax or BAS agent, who usually gets a few extra weeks. The GST figures can be worked out on a cash basis, counting sales when the money arrives, or an accruals basis, counting them when invoiced; the choice affects cashflow because it decides when GST on unpaid invoices is due.
Any amount owing is paid with the statement. If the business cannot pay in full, the ATO offers payment plans, but interest runs on the balance and the debt is still recorded. Keeping the GST collected in a separate account through the quarter is the simplest way to avoid a BAS-day scramble.
BAS in a finance application
Because it is lodged every quarter and comes straight from the ATO's records, the BAS is one of the most trusted pieces of evidence a lender can ask for. For a business loan or equipment finance it shows the trend in total sales, whether it matches the deposits on the bank statement, and whether the business lodges and pays on time.
Low doc finance leans on it heavily: a handful of recent statements can replace the full financials a lender would otherwise want. Lenders may also ask for the ATO account summary that sits behind the statements, which shows any unpaid tax and any payment plan.
Example
A cafe owner in Bendigo wants to replace her coffee machine and does not have last year's financials finished yet. Her broker asks for the last four quarterly BAS instead. They show total sales rising steadily, GST and PAYG withholding paid on time, and figures that line up with the deposits on her business bank statements. The lender accepts them as low doc evidence of turnover and approves a chattel mortgage on the new machine without waiting for the year-end accounts.
Not to be confused with
- Goods and services tax (GST)
- GST is the tax, while the BAS is the form that reports and pays it
- PAYG
- PAYG withholding and instalments are obligations reported on the BAS, not the statement itself
Frequently asked questions
How often do I need to lodge a BAS?
Most small businesses lodge quarterly, with each statement due about four weeks after the quarter ends and a little longer if you lodge online or through an agent. Businesses above a turnover threshold, or that choose to, report GST monthly. Some very small businesses that are voluntarily registered for GST can report once a year.
Do I need to lodge a BAS if I'm not registered for GST?
Not a BAS as such. If you are not registered for GST but the ATO has put you into the PAYG instalment system, or you withhold tax from employees' wages, you lodge an instalment activity statement (IAS) covering those obligations. If you have neither, you have nothing to lodge between tax returns.
Can I use my BAS to get a loan?
Yes. Recent BAS are standard evidence for low doc business lending, because they show turnover quarter by quarter straight from ATO records. Lenders typically want the last two to four statements, matched against bank statements, and will look for on-time lodgement and no outstanding tax debt. Keep copies of what was lodged, not just the software drafts.
What happens if I lodge my BAS late?
The ATO can charge a failure to lodge penalty for each period overdue, and interest accrues on any unpaid amount from the due date. Persistent late lodgement also flags the business to the ATO and can be reported to credit bureaus once a debt is large and old enough, which lenders then see. If you cannot pay, lodge on time anyway and arrange a payment plan.
What is the difference between a BAS and an IAS?
A BAS includes GST and is lodged by GST-registered businesses. An IAS, or instalment activity statement, is the version for businesses and individuals who are not registered for GST but still have PAYG instalments or withholding to report. Some GST-registered businesses lodge both: a quarterly BAS and monthly IAS for withholding.
Related terms
Goods and services tax (GST)
Goods and services tax (GST) is a broad-based 10% tax on most goods and services sold in Australia, which registered businesses collect on sales and pay to the ATO.
Read definitionInput tax credit
An input tax credit is the GST a registered business can claim back on the price of goods and services it buys for business use.
Read definitionATO
The ATO is the Australian Taxation Office, the national tax authority that collects income tax, GST and PAYG, administers superannuation rules, issues rulings and enforces compliance.
Read definitionPAYG
PAYG means pay as you go: the ATO system for collecting income tax during the year, withheld from wages by an employer or paid in instalments by a business.
Read definitionTax invoice
A tax invoice is a document issued for a taxable sale, normally by the GST-registered seller, recording the sale and the GST payable so the buyer can claim a credit.
Read definitionCash flow
Cash flow is the movement of money into and out of a business over a period; unlike profit, it tracks actual receipts and payments, so it measures liquidity.
Read definitionGo deeper
Sources
This article is general information only and is not financial advice.