What do you need to lodge?
Both arrive from the ATO as "activity statements", and they look much alike. But a Business Activity Statement (BAS) and an Instalment Activity Statement (IAS) report different things, and knowing which you lodge helps you plan.
The BAS: for GST-registered businesses
If your business is registered for GST, you lodge a BAS. Depending on your setup, it can report:
GST collected on sales and paid on purchases
PAYG withholding from employees' wages
PAYG instalments towards your income tax
Other taxes such as fuel tax credits or FBT instalments, if they apply
Most small businesses lodge quarterly, though some lodge monthly.
The IAS: two common situations
An IAS reports PAYG withholding, PAYG instalments, or both, but never GST. You'll usually lodge one of these.
1. You're not registered for GST. A common example is a sole trader below the GST threshold who employs staff or pays PAYG instalments.
2. You report GST quarterly, but PAYG withholding monthly. This one catches many businesses out. If you withhold between $25,001 and $1 million a year from wages and other payments, you're a medium withholder, and you must report and pay PAYG withholding every month. Smaller withholders can also choose to report monthly.
Your GST is still reported quarterly, so you'll get a mix of statements each quarter.
Watch the 21st
The two monthly IAS are due on the 21st of the following month, and payment is due then too. Unlike quarterly BAS, they don't get the extra time available through a BAS Agent.
Because they fall between your BAS lodgments, it's easy to forget them. Each one is a separate obligation, so a missed IAS can attract its own failure-to-lodge penalty and interest. Setting PAYG withholding aside every pay run makes the 21st much easier to meet.
Why it matters
Your statement type affects your due dates, the records you need, and how much to set aside. If you've recently registered for GST, dropped below the threshold, or your wages bill has grown past the medium withholder threshold, your statements may change too.
Not sure which you're on, or whether it's right? Exact BAS & Bookkeeping is a registered BAS Agent and lodges both. Call 03 9860 4480.
