Aside from having to register for an Australian Business Number (ABN) or Australian Company Number, Tax File Number and Goods and Services Tax when starting your own business, you also need to be aware of what sort of lodgments you will be required to make to the Australian Taxation Office. Aside from the year end statements and returns that needs to be lodged, Activity Statements or Business Activity Statements need to be lodged on a regular basis throughout the financial year as well.
The Business activity statement is a form that needs to be submitted to the Australian Taxation Office by any registered business in order for you to report your taxes and tax obligations, such as Goods and Services Tax, pay as you go withholding, pay as you go instalments, fringe benefit taxes, wine equalisation taxes and luxury car taxes, etc.
If your business has registered for the Goods and Services Tax, then you will be required to lodge a Business Activity Statement. If your business has not registered for the Goods and Services Tax then you may lodge an ‘Instalment Activity Statement’, which is a similar form, but is used for Pay as you go withholding, pay as you go instalments, fringe benefit taxes and so forth. The Instalment Activity Statement is not used to report Goods and Services Taxes.
So how would you know whether or not you will be required to lodge either a Business Activity Statement, or an Instalment Activity Statement?? Instalment Activity Statements are usually more relevant to investors and / or small businesses, where areas if you have already registered for an Australian Business Number and Goods and Services Tax, then the Australian Taxation Office will automatically send you a Business Activity Statement when the time comes for you to lodge them.
If you are required to lodge a Business Activity Statement, the Australian Taxation Office will send you the form either via electronic mail or in the post. If you are aware that you are required to lodge a Business Activity Statement but have not received any forms or notices from the Australian Taxation Office, then it is best to call them to check. Failure to lodge a Business Activity Statement can result in penalties issued by the Australian Taxation Office.
How frequently to lodge a Business Activity Statement
If you are wondering or not sure about how frequently it is required for you to lodge your Business Activity Statement, the general rule of thumb is as below.
If your annual turnover is more than twenty million dollars, have elected to make a monthly lodgment and the income tax year doe not end on 30th June, then you may be required to report your Business Activity Statements monthly. You will also be required to report your Pay as you go monthly if the withholding is more than twenty-five thousand dollars but less than one million dollars or if the withholding is more than one million dollars per fortnight.
You can report your Business Activity Statement at every quarter if your annual turnover is less than twenty million dollars and you do not elect for monthly reporting and if your pay as you go withholding is less than twenty-five thousand dollars annually.
If you require advice or assistance in lodging your business activity statements, book a consultation with one of our specialists to find out how we can help you. http://calendly.com/taxideas