Activity Statements and Registrations

One thing many of my clients question me about is - "Why do I have to pay the ATO every month when my GST registration is quarterly?”

Let’s break it down. 
Depending on your registrations, turnover and other factors, you may need to report & pay to the ATO more regularly than every quarter.
A business with a turnover of under $20 million only needs to report and pay their GST each quarter in their Business Activity Statement (BAS).  Simple!

What gets confusing for some, is when a business employs staff and they must also register for PAYG withholding. The reporting of wages and tax withheld from wages is added to the same form used to report the businesses GST each quarter and they are paid in a lump sum to the ATO.

For example: 

In a Businesses Activity Statement for the quarter of July - September, the business will report all GST collected on income, GST paid on expenses, wages paid to employees as well as the amount of PAYG tax withheld from the wages for that 3 month period. Additional registrations will also be reported such as Fuel Tax Credits and PAYG Instalments, but more on those another day!

Where clients start getting confused is when the ATO automatically changes their PAYG withholding registration to monthly. This is because the withholding amounts would have exceeded $25,000 per year, so the ATO requires them to report more regularly.

How this works for reporting purposes:

Let’s use the example of the July - September quarter again.  The business will receive a form each month to complete.  In July and August they will receive an Instalment Activity Statement (IAS) where they will need to report the wages paid to employees during that month as well as the PAYG tax withheld from the employees wages for that same month.  This needs to be lodged and paid to the ATO within 21 days of the reporting month ending.  

But what about September? 

Well, as the business still needs to report GST on a quarterly basis, they will be issued with a July - September BAS.  In this BAS they will report their GST for the whole quarter as outlined in the above example but then report only the wages and PAYG tax withheld on wages for the month of September, as the July and August months have already been reported and paid.

Quarterly BAS’s must be lodged and paid within 28 days of the quarter ending, unless a registered agent lodges on your behalf.

If you're interested in having a little extra time to lodge, contact us now!