Banish the BAS – It’s about time it was simplified

BAS

Editor’s Note: There have been many varying opinions on the BAS in the media lately, here is one from Bill Lang, Executive Director of www.SmallBusinessAustralia.org.au

For several years Australian Small Business people have consistently rated simplifying the BAS as one of the Top 2 things they would like to see the Federal government do.  In the past, promises were made to do so and then after each election they were forgotten.

Did you know the BAS is now 13 years and it has hardly changed?

Did you know that over 60% of business owners would change their vote to a party that will take steps to simplify it?

Small Business Australia has launched the Banish the BAS campaign to allow small business supporters to tell the political parties it’s about time.

It’s about time that all businesses should automatically only have to lodge one simplified statement a year.  Payments can still be made monthly or quarterly and then adjusted at the end of the year.

It’s about time to start reducing red tape by removing unnecessary and poorly designed forms, lodgements and distractions from running a business.

As Brian Ferry famously sang, “Come on, come on, let’s stick together”. It’s about time that time wasting, confusing and for some people anxiety creating red tape was more than cut – forms like the current BAS should be banished.

Do you agree or disagree with Bill? Add your opinion in the comments section below.

  • Chris

    Can’t disagree with you more. If business finds it difficult to reconcile their banks accounts once a quarter and run a profit and loss statement to see how their business is going, then I question whether they should be in business. Businesses fail because they fail to plan. How can a business really plan to succeed and then not look at their financial reports for 12 or more months? The BAS can be accused of many things, but it really stacks up as far as getting businesses to at the very least, look at how they are going during the year. Keep businesses profitable, keep the BAS.

  • http://www.icb.org.au Institute of Certified Bookkeepers

    No! you are very wrong!
    Business with turnover less than $2m can already elect to do one BAS reconciliation a year and pay quarterly but very few elect to do so

    In relation to some of the other media about this Annual lodgement recently we commented as shown below.

    An Annual BAS IS NOT THE WAY FORWARD!
    Todays software is making the completion of the BAS very very simple. It is the complexity of the GST system that needs help. it is the useless information that business is forced to collect and provide that is the problem.

    Have a look at the recent Taxable Payment Reporting system for construction industry – a reasonable concept but poorly implemented so that the burden for business to comply is tougher than it should be and the information being provided to the ATO based on the current system will be confusing at best. Poor definitions and poor requirements

    …..

    SIMPLIFY THE COMPLIANCE BURDEN

    You may have heard the proposal to have annual BAS and how that will relieve the compliance burden. We think not!

    Unfortunately the proposal summary doesnt include that the annual BAS lodgement, DOES NOT remove the quarterly payment of GST by a business. This annual form system has been around for years and has applied to businesses under $2m turnover. Very few have taken it up. Why?

    Because there is NO advantage to the business!
    Every quarter they still must make a payment of GST to the ATO based on the previous years results rather than this years actual results. Then if they do this they get to the end of the year and have to do a reconciliation of all of this year.

    What if the instalments are way below the actual liability now discovered? This results in the cashflow problem you mention. An unexpected lumpsum now needs to be paid.

    What if the instalments were too high? this means the business has paid its very own cash to the ATO during the year, instead of having that cash available to run its business. Yes it may now get a refund.

    Best practice would be to only adopt this method if you were in a rapidly growing business that has to pay GST.

    What about where the GST amount is a refund each quarter?

    If either government wishes to relieve the compliance burden around GST and BAS then, make it a simple system where the business only has one decision “GST or NOT” and then remove all the unnecessary boxes off the BAS.

    • http://www.smallbusinessaustralia.org.au Bill Lang

      Spot on – lets start with simplifying the form. Then making it very visible to owners that that you can select various frequencies of submitting a form – time spent on collecting tax and doing the reporting is time away from finding customers, delivering products and services and having time for some life outside of the business.

      There’s a reason 60% of business owners want it simplified – they find it confusing, taking time to do and taking time and energy away from grappling with the changes being caused by digitisation and globalisation in their industries.

  • Norm Johnson

    Strange that this comment is on a MYOB site. I used MYOB in our business and it made the monthly BAS very simple. 20 minutes to complete and the process helped me keep my business on track. Leaving to an annual return will have the same effect as the old tax system, which saw some people failing to budget for tax and spending the money they thought they had, then getting into trouble when the tax bill arrived. Crazy and lazy!!! Get over it!

  • http://www.facebook.com/profile.php?id=100000003910470 Leanne McMinn

    I am concerned when I here talk of changing the current BAS from monthly or quarterly to annual reporting. There are far to many people not managing the payment of GST tax debts to the ATO now, imagine how hard it would be if these same people only had to report and pay once a year.
    If everyone used their software appropriately preparing the BAS is a simple process, and even easier now that bankfeeds are here.