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The ATO has introduced a simpler Business Activity Statement (BAS), taking effect from 1 July 2017, designed to help reduce GST compliance costs for small businesses. This new system will apply to your business if you are Small Business Entity (SBE). Your business will qualify as an SBE if your turnover is less than $10 million. Turnover means the gross income or sales proceeds of your business, not gross profit or net profit. (Note that if you are connected to another entity your turnover may need to be aggregated).

Once the simpler BAS is introduced, small businesses will only need to report:
bulletGST on sales (1A)
bulletGST on purchases (1B) and
bulletTotal sales (G1).

No longer will you have to report:
bulletExport sales (G2)
bulletOther GST free sales (G3)
bulletCapital purchases (G10) and Non-capital purchases (G11).

“Simplifying the tax system” is a utopian phrase that is thrown around that makes us all feel good but it doesn’t seem to ever come to fruition. While this change is not major, it will genuinely simplify things for small businesses – particularly the removal of G10 and G11.

However, it is important to note that the two most important labels have always been 1A and 1B as these drive the actual payment of GST to the ATO and these changes make it no easier to get those labels right.

If you require any further explanations of the changes, wondering about your eligibility or need some help with preparing your BAS, please contact us. We would be pleased to help.

Daniel Turcato

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