An explanation of Simpler BAS

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What is Simple BAS?

The Australian Taxation Office (ATO) has listened to the concerns of small businesses, tax professionals, industry associations and software providers, and is working towards reducing GST compliance costs for small businesses.

The ATO is reducing the amount of GST information required for the Business Activity Statement (BAS) to simplify GST bookkeeping and reporting requirements.

From 1 July 2017, small businesses will only need to report the following GST information on their BAS:

  • GST on sales (1A)
  • GST on purchases (1B)
  • Total sales (G1)

The requirement to report Export sales (G2), other GST free sales (G3), Capital purchases (G10) and Non-capital purchases (G11) will be removed.

What is the Simpler BAS/GST alpha test and why is the ATO conducting it?

The ATO is conducting an alpha test of the GST bookkeeping component of the Simpler BAS. The feedback and findings from the alpha test will help the ATO and software developers refine their products and support services, ensuring they meet the needs of small business.

What is the GST bookkeeping component of Simpler BAS?

As businesses will not be required to report G2, G3, G10 and G11 on the BAS form, you no longer need to classify your transactions under GST codes that contribute to G2, G3, G10 and G11 fields. If you participate in the Simpler GST alpha test, you will only have the following three tax codes to choose from for both sales and purchase transactions:

  • GST
  • GST Free
  • Out of Scope

With only tree codes, the ATO is hoping to make it easier for small businesses to classify transactions and reduce errors.

How does Simpler BAS help small businesses?

Simpler BAS will give small businesses time and cost savings by simplifying account set up, GST bookkeeping and BAS preparation. Businesses will be able to more easily classify transactions and prepare and lodge their BAS, thus reducing the cost of compliance.

What does it mean to users opting in for the alpha test in QuickBooks Online?

If you opt-in to the alpha program, you will only need to report reduced GST information on BAS. Hence, you will have a lesser number of GST classifications to choose from for all sales and purchase transactions. You will only need to classify sales and purchase transactions as GST, GST Free and Out of Scope (compared to nine GST codes for users that do not opt in). This means less time spent on classification and bookkeeping and more time to focus on your business.

That sounds good, but is there a catch?

There is no catch. All customers will move to Simpler BAS from 1 July 2017, but you have the option to adopt simplified GST bookkeeping now. Your feedback is critical to ensure that the ATO and QuickBooks Online bring the right solution to market. QuickBooks Online will advise the ATO that you’re participating in the Simpler GST alpha program by sharing your ABN. The ATO and/or QuickBooks Online may contact you for feedback to understand the business benefits of simplified bookkeeping.

How do I participate in the alpha program?

You can participate in the alpha program if:

  • You allow QuickBooks Online to share info about your participation with the ATO
  • You’re a small business and you report GST quarterly
  • You’re not importing historical data into QuickBooks Online

When you setup GST in QuickBooks Online, you will be given an option to participate in the Simpler GST alpha program. You can participate by simply clicking the “I want to participate” button. It's that simple.

Can I switch to the current GST classification at any time if I participate now?

We believe that once you start with Simpler GST, you will not see a need to move to the current GST classification with nine GST codes. However, in the rare case you see a need, you will be able to switch once the feature is made available to all customers. You will not be able to switch during the alpha period.

What does Simpler GST mean to my BAS between now and 1 July 2017?

If you participate in the Simpler GST alpha program, you are required to report only the following three fields for GST on your BAS form.

  • GST on sales (1A)
  • GST on purchases (1B)
  • Total sales (G1)

You can report $0 for Export sales (G2), other GST free sales (G3), Capital purchases (G10) and Non-capital purchases (G11).

Where can I find more information about Simpler BAS?

You can find more information about Simpler BAS on ATO’s Simpler BAS webpage here.