What is a BAS Agent and How Do They Help?
Effective financial management is pivotal for business success, and an integral part of this is understanding the role of a Business Activity Statement (BAS) professional.
BAS agents play a significant role in business finance, advising or representing businesses in areas such as the Goods and Services Tax (GST), payroll, and other tax-related matters.
In this blog, I’ve explained everything you need to know about the role of a BAS professional, as well as their responsibilities, qualifications, and the benefits of using their services.
- What is a BAS Agent? A professional specialising in advising and representing businesses in GST, payroll, and other tax-related matters.
- Responsibilities of a BAS Agent: Includes GST management, payroll oversight, maintaining financial records, and compliance reporting.
- Qualifications Needed: Must have an accounting or bookkeeping qualification, adhere to a professional code of conduct, and be registered with the Tax Practitioners Board (TPB).
- Benefits of Using a BAS Agent: Offers accuracy in financial management, ensures compliance, saves time and costs, and provides expert tax advice and peace of mind.
What is a BAS Agent?
A BAS agent is a professional appointed to advise or represent businesses in areas concerning the Goods and Services Tax (GST), payroll, and other tax-related matters. Their key responsibilities include:
Duties and Responsibilities
- GST Management: They are responsible for the preparation and lodgement of BAS and offering GST-related advice.
- Payroll Functions: This includes overseeing payroll and ensuring adherence to superannuation and taxation laws.
- Record Keeping: They are tasked with maintaining precise financial records.
- Compliance Reporting: They provide support with obligations such as PAYG instalments and fringe benefits tax (FBT).
Who is Qualified to Be a BAS Service Provider?
Under the Tax Agent Services Act 2009 (TASA), the following education and professional standards are required when registering as a BAS agent in Australia:
- A Certificate IV in Financial Services (Bookkeeping or Accounting) or a higher qualification.
- Alternatively, a course that is considered by the Tax Practitioners Board (TPB) to be equivalent to the Certificate IV.
- 1,400 hours of relevant experience in the past four years if the individual holds a relevant qualification, or
- 1,000 hours of relevant experience if the individual is a voting member of a recognised BAS agent or tax agent association.
Continuing Professional Education (CPE)
- BAS agents must undertake a minimum amount of CPE (usually around 45 hours over three years, but this can vary depending on circumstances and is subject to change by the TPB).
Professional Indemnity Insurance
- BAS agents are required to maintain an appropriate level of professional indemnity insurance to protect both themselves and their clients.
Fit and Proper Person
- The individual must be considered a ‘fit and proper person’, which generally involves assessments of honesty, integrity, and reputation.
Code of Professional Conduct
- Adherence to the TPB’s Code of Professional Conduct, which includes requirements for honesty, integrity, independence, confidentiality, and competency in their professional services.
Benefits of Using a Professional
Accuracy and Compliance
- Expertise in Tax Laws: Their knowledge of tax laws ensures accurate compliance.
- Attention to Detail: Rigorous review of financial records minimises errors.
- Regular Updates and Training: Staying informed about legislative changes to maintain high compliance standards.
- Reliable Software Use: Utilising advanced accounting software for accurate record-keeping.
- Systematic Review Processes: Implementing reviews to verify the accuracy of financial statements.
- Adherence to Professional Standards: Following strict standards to enhance accuracy and compliance.
- Timely Filing: Ensuring all tax filings and reports are submitted punctually.
Time and Cost Efficiency
- Streamlining Processes: Saving significant time in tax and financial management.
- Minimising Errors: Reducing the need for costly corrections.
- Focusing on Core Business: Allowing businesses to concentrate on primary operations.
- Avoiding Penalties: Ensuring compliance with tax laws.
- Cost-Effective Solutions: More affordable than a full-time tax specialist.
- Proactive Tax Planning: Offering advice that can lead to savings.
- Utilising Technology: Automating tasks to enhance efficiency.
- Tax Optimisation: Guidance on minimising tax liabilities.
- Financial Planning Insights: Advice for better financial and cash flow management.
- Customised Solutions: Tailoring advice to specific business needs.
- Regulatory Updates: Keeping businesses informed about changes.
- Risk Management: Advising on financial risks and compliance.
- Efficiency Recommendations: Suggesting improvements for financial processes.
Peace of Mind
- Compliance Assurance: Confidence in accurate tax and compliance management.
- Financial Stability: Trust in the correctness of financial records.
- Reduced Stress: Easing the burden of complex tax management.
- Query Support: Availability to address tax-related questions.
- Proactive Problem Solving: Foreseeing and addressing potential financial issues.
- Trust in Expertise: Relying on their professional knowledge and standards.
What is a BAS?
BAS refers to a Business Activity Statement. If your business is registered for Goods and Service Tax (GST), you must submit a BAS form to the Australian Taxation Office (ATO).
Lodging a BAS with the Australian Taxation Office lets them know how much tax you owe or how much tax you need to be refunded for.
A BAS reports on the following aspects of your business:
- PAYG withholding tax
- PAYG instalments (pay as you go)
- GST (Goods and service tax)
- Other applicable taxes your business is required to pay
What are the BAS due dates?
The BAS due dates for 2023/2024 are as follows:
- Quarterly BAS Due Dates: 28th day after each quarter, with an exception for Q2 (28 February 2024).
- Monthly BAS Due Dates: 21st of the following month.
- Annual BAS Due Dates: Either 31 October or 28 February.
For more detailed information, read our blog covering all things relating to BAS due dates.
Do sole traders have to pay BAS?
Yes, sole traders must pay BAS if their gross income is over $75,000.
What happens if I make a mistake on my BAS?
If you enter an incorrect amount or accidentally exclude GST from a sale, you’ll need to address these mistakes. This can be done by contacting a tax professional and fixing the mistake by the next due date cycle. Working with a qualified business account can help prevent these BAS mistakes.
Are there ways to reduce BAS payments?
If you are making these common BAS mistakes, your business may be paying too much.
Here are some tips on how to reduce BAS payments:
- Make sure you claim all your GST credits to reduce the amount of GST your business is responsible for paying on the sale of goods and services
- If your small business has a turnover of $10 million or less, consider paying GST on a cash basis. Paying GST on a cash basis means you pay GST in the BAS period where your business is actively receiving payment from customers. Paying GST on a non-cash basis means you are paying in a BAS period when your business is invoicing customers rather than actually getting payments.
- Make sure you aren’t accidentally including GST on sales that are GST-exempt (GST-exempt sales often involve medical or health services, food, etc.)
A tax professional can help ensure your business is not making these common BAS mistakes and paying more than necessary.
What happens if I am not able to pay?
Even if you are not able to pay, it is still recommended to lodge your BAS. This proves to the Australian Taxation Office that your business is aware of its tax obligations and working toward compliance.
For businesses, particularly those navigating Australian tax laws, understanding the role and benefits of a BAS professional is crucial. Engaging a qualified agent ensures compliance, precision, and enhanced operational efficiency in financial management.
For assistance with your BAS requirements, get in touch with our award-winning team of business accountants today.