As part of the federal budget released in May 2016, the Commonwealth government announced that simpler BAS would be rolled out to all small business from 1 July 2017.
From this date, small businesses will only be required to report GST collected, GST entitled to be claimed and total sales.
“Small business, software developers, tax professionals and industry professionals have raised concerns that the complexity of the BAS places an unnecessary burden on small business and increases their GST compliance costs,” an ATO spokesperson told AccountantsDaily.
“The questions on the BAS are being removed because small businesses have told us additional questions and classifications are difficult, complex and small businesses find it hard to report with complete accuracy.”
The ATO has been working with interested software developers and some of their partner tax agents to recruit a number of small businesses to transition to the simpler BAS.
During Q1 of 2016-17, up to 200 small businesses and tax agents were tested on how they would manually configure their accounting system to support the simpler BAS and whether it would provide cost-of-compliance savings.
During Q2 of 2016-17 the focus has been to work with the software partners to ensure the system specifications are available to the entire industry and the business intent is clear.
The initial feedback from 13 tax professionals and 192 small business participants suggests the simpler BAS will reduce the time spent on software set-up, bookkeeping and validation checks, and create greater accuracy of classifications and less validation checks required when preparing BAS.
Moving into Q3 and Q4 the ATO will focus on new-to-business small businesses to assist earlier adoption of the simpler BAS, and once the accounting software is fully configured for the simpler BAS, the ATO will test the software with 2,000 small businesses to confirm and quantify the cost-of-compliance savings and how they will transition to the simpler BAS.
“A simpler BAS will give small businesses time and cost savings by simplifying account set-up, reducing GST bookkeeping and reducing BAS preparation time,” an ATO spokesperson said.
“Small businesses will be able to more easily classify transactions and prepare and lodge their BAS.”