As a small business owner, you need to make sure you have the right financial professionals on your team.
And it’s not easy. With so many different options out there, understanding who does what is harder than ever.
So, in this article, we’re going to explain exactly what a BAS agent is and what they can do, as well as take a look at the pros and cons of BAS agents versus other financial professionals like bookkeepers, accountants, and tax agents.
Let’s get into it.
Quick Definition
A business activity statement (BAS) is a form submitted to the ATO by certain Australian businesses that helps them pay GST, PAYG instalments, PAYG withholding tax, and certain other taxes.
A BAS service is a service that involves offering advice or representation to businesses for BAS-related matters.
A BAS agent is licenced and registered with the Tax Practitioners Board to provide BAS services.
What is a BAS?
A business activity statement (BAS) is a tax-related form that certain Australian businesses must submit to the government. It’s a way for businesses to report and pay their:
- Goods and services tax (GST)
- Pay as you go (PAYG) instalments
- PAYG withholding tax
- Certain other taxes
Businesses must lodge BASs once they’ve registered for GST, which is mandatory when a business reaches $75,000 in annual turnover. Most statements are lodged quarterly, although there are some exceptions – businesses with a GST turnover of more than $20 million must lodge them monthly, and GST-registered businesses with a turnover of less than $75,000 only need to lodge them annually.
If your turnover falls into the $75,000–$20 million range, you have 28 days after the end of the reporting period to lodge your BAS. If you lodge online, the ATO gives you a two-week extension. Businesses that report monthly, on the other hand, have just 21 days after the reporting period to lodge.
What is a BAS Service?
Now we know what business activity statements are, let’s take a look at how to lodge them. You can complete and lodge your BAS yourself – for microbusinesses with very basic books and more time than money, this can be a viable option.
The other option is to pay someone to provide a BAS service. The Tax Agent Services Act 2009 (TASA) defines a BAS service as:
- Ascertaining or advising liabilities, obligations or entitlements of an entity that arise, or could arise, under a BAS provision
- Representing an entity in their dealings with the Commissioner in relation to a BAS provision
- Helping an entity satisfy liabilities or obligations that arise, or could arise, under a BAS provision
- Helping an entity claim entitlements that arise, or could arise, under a BAS provision
In other words, if someone is helping you calculate your BAS in any way, they’re providing a BAS service.
What is a BAS Agent?
A BAS agent is someone who is licenced and registered with the Tax Practitioners Board to provide BAS services. They can help clients with things like:
- GST
- Certain types of tax
- PAYG
We’ll cover exactly what a BAS agent can and can’t do shortly.
Who Needs to Register as a BAS Agent?
Anyone who wants to provide BAS services needs to register as a BAS or tax agent. Under the TASA, providing BAS services if you’re not registered can incur a fine of 250 penalty units for individuals (which, in Victoria, currently amounts to $45,435).
Using an unregistered BAS agent is also dangerous for businesses. Registration is a way to make sure the individual in question is properly knowledgeable and qualified; without it, there’s no way to know whether the person you’re using actually understands the complexities of BASs, which could lead to serious, financially damaging errors for your organisation.
What Can a BAS Agent Do?
So, now we know what a BAS agent is, let’s take a look at what they can actually do. They can provide clarification for, advise, and represent clients in relation to the following matters:
- All GST matters
- All wine equalisation, fuel and luxury car tax matters
- Paying fringe benefits tax
- All PAYG withholding (both payroll and other) matters
- All PAYG instalment payment matters
- All Taxable Payments Annual Reporting system matters
- Superannuation guarantee matters relating to payroll and charges
Practically, this means being able to do things like setting up compliance systems, advising clients about the above matters, reviewing and lodging results, and reviewing client business operations in relation to the above matters.
Keep in mind that a BAS agent and a tax agent are not the same thing. For example, a BAS agent can’t do things like:
- Help a client with liabilities, obligations or entitlements that arise under a taxation law that does not fall under a BAS service
- Provide advice about default superannuation funds
- Provide advice about the benefits of super
- Provide any kind of financial planning advice
- Advise in relation to the income tax consequences of super
Tax agents are differently qualified and registered, and can help with the above matters.
BAS Agent Requirements
For a person to be registered as an individual BAS agent, the following requirements apply:
- They must be aged over 18 years.
- They must be of good fame, integrity and character.
- They cannot have had any of the following occur in the last five years:
- Being convicted of a serious taxation offence
- Being convicted of an offence involving dishonesty or fraud
- Being penalised for promoting a tax exploitation scheme
- Being penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling
- Having the status of an undischarged bankrupt
- Being sentenced to a term of imprisonment
- Serving a term of imprisonment
- They must have the requisite qualifications and experience. You can find out more about what those are here.
- They must maintain or be able to maintain professional indemnity insurance that meets the requirements of the Tax Practitioners Board.
- They must undertake continuing professional education before renewing their BAS registration.
Becoming a BAS agent isn’t simple, but the requirements exist for a good reason. When you hire a registered BAS agent to work with your business, you know that they’ll be an honest, law-abiding, and knowledgeable individual with insurance cover that keeps you safe.
BAS Agent Code of Conduct
In addition to the formal registration requirements, BAS agents must also comply with the code of conduct laid down by the Tax Practitioners Board. The code spans five main areas: honesty and integrity, independence, confidentiality, and competence.
Honesty and Integrity
A BAS agent should always act with honesty and integrity. This includes complying with tax laws in their personal finances, and being honest with your client about any property or money you’ve received on their behalf.
Independence
BAS agents must act in the best interests of their clients; they should also have in place mechanisms to manage conflicts of interest.
Confidentiality
A BAS agent can’t disclose your information to third parties unless you give them permission or they have a legal obligation to do so.
Competency
A BAS agent can’t disclose your information to third parties unless you give them permission or they have a legal obligation to do so.
Other
BAS agents can never knowingly obstruct the application of tax laws. They also need to fully inform you of your BAS service-related rights and obligations, maintain their professional insurance, and respond promptly to directives from the Tax Practitioners Board.
BAS Agents vs. Tax Agents
The difference between a BAS agent and a tax agent is actually quite simple. A BAS agent can help you with bookkeeping and BAS-related matters – that’s it.
A tax agent, on the other hand, can provide clarification for, advise, and represent you in relation to a much broader range of tax-related matters, including income tax returns.
Tax agents and BAS agents are also registered differently with the Tax Practitioners Board, and have different training, experience and skill requirements.
BAS Agents vs. Bookkeepers
Another question we get asked a lot is “what’s the difference between a BAS agent and a bookkeeper?”.
Compared to BAS agents, bookkeepers have a relatively limited scope. They generally can’t advise clients or design systems – they can only perform tasks like data transference, data entry, bank reconcilement, and payment processing. Although they can prepare reports, their work generally has to be reviewed by a registered BAS or tax agent.
In other words, a bookkeeper can’t perform work that their employer or client will rely upon. They can only work within the existing system, provide general guidance (not advice), and ask relevant questions.
How a BAS Agent Can Help
Unlike your annual tax return, business activity statements need to be lodged quarterly. That means you’re going to have to pay someone to help prepare them, and using an accountant or tax agent is unnecessarily expensive and time-consuming.
Using a BAS agent is an easy, cost-effective way of ensuring your BASs are accurate and lodged on time – not something a regular bookkeeper can help with. Keeping your BAS-related information up-to-date is also a great way to promote bookkeeping hygiene; when you do go to your accountant for your tax return, better-kept books means they’ll spend less time and money fixing errors.
Importantly, using an external BAS agent means you aren’t liable for any mistakes in your BAS lodgements. All BAS agents are required to have their own insurance, so you don’t need to worry about someone else’s error landing you in trouble with the ATO.
Still doing your books yourself? Find out why you should hire a BAS agent here |
Keeping your business’s finances running smoothly should be fast, inexpensive, and simple. A BAS agent delivers all three – and gives you peace of mind that everything is accurate.
Stop wasting time and money.
Talk to a qualified BAS agent from JTRB today.
