Running a small business in Perth involves juggling various responsibilities, among which financial compliance plays a critical role. Understanding the Goods and Services Tax (GST) and Business Activity Statements (BAS) is not just about compliance; it’s about harnessing these tools to sustain and grow your business.
What is GST?
GST, a 10% tax on most transactions, affects goods and services sold or consumed within Australia. For a café owner, this means adding GST to the price of every coffee sold; for a retailer, it applies to each item on the shelf. If your business earns $75,000 or more, registering for GST is mandatory. This inclusion ensures that you are collecting and remitting the correct amount of tax directly from your sales, simplifying your contributions to national revenue.
Understanding BAS
The Business Activity Statement (BAS) is essentially a regular report provided to the ATO that outlines your business’s tax obligations including not just GST, but also other taxes like PAYG instalments. For example, a freelance graphic designer would use BAS to report their income and claim GST credits on business expenses like software or hardware. Lodging a BAS can vary from monthly to quarterly, depending on your business size and preferences, which allows for flexibility in managing cash flow.
Preparing for BAS
Effective BAS preparation begins with robust bookkeeping. Utilise accounting software tailored for small businesses, which can automate much of this process by tracking sales and expenses and calculating GST. Regularly consulting with a small business accountant can also prevent common pitfalls, such as misclassifying expenses or overlooking deductible items.
Common Mistakes to Avoid
Mistakes in GST and BAS reporting can lead to penalties and cash flow problems. Common errors include failing to account for GST on new income streams or forgetting to claim GST credits on major purchases. Ensuring thorough documentation and regular reviews of your financial processes helps mitigate these risks.
The Abbotts’ Promise
At Abbotts, we are dedicated to empowering small business owners in Perth with the knowledge and tools to manage GST and BAS confidently. We provide clear, expert guidance tailored to your business needs, helping you navigate the complexities of tax compliance with ease. Our commitment is to offer supportive, accessible financial advice so you can focus on what you do best—running your business.
Ready to Take Control of Your Business Finances?
Don’t let GST and BAS complexities hold you back. Contact Abbotts today to schedule a consultation with one of our expert business accountants in Perth. We’re here to help you streamline your financial management and boost your business success. Contact Us today.
