Last year, we conducted research and found that small-to-medium enterprises (SMEs) were spending $13-14 billion per year complying with Goods and Services Tax (GST).
This took into account all the time business owners took to record every transaction. Splitting out “GST free” from “non GST” categories, as well a number of other micro-tasks, was eating up an enormous amount of time and cost resources for our small business owners. These “G-tags” or “codes” aren’t at all used to calculate the amount of tax, but are required to be filled out on all transactions to comply with regulations.
The ATO has just announced that it is exploring removing these for businesses with up to $10 million in revenue. We anticipate that by doing this, there would be a $3 billion per year saving in the time spent for SMEs and accountants.
Although it was just a small line within the Federal Budget, it was announced that the ATO was reducing the amount of GST information required for BAS to simplify GST record keeping and reporting requirements. These changes would see a reduction from seven codes to just three codes; a huge benefit and time-saving measure for SMEs.
Small business owners of the future won’t believe it was ever done a different way.
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.
A simpler BAS will provide small businesses with significant time- and cost-savings by simplifying account set-up, GST record-keeping and BAS preparation. Businesses will be able to more easily classify transactions and prepare and lodge their BAS.
A simpler BAS will support greater use of existing automation functions and potential digital solutions as they evolve.