Business Activity Statements. If you’re a business owner in Australia, you have to do “the BAS”. This involves calculating and reporting taxes like GST and Pay As You Go (PAYG - taxes taken out of your employee’s pay). Most of us find them too complicated to do on our own and there are penalties if you get them wrong. I know business owners who have been fined for accidentally misreporting their BAS and it was not a good experience!
Bring in an expert
BAS agents are most commonly bookkeepers qualified to provide BAS services. Bookkeeping and BAS tie together perfectly – after all, your bookkeeper is doing the day-to-day recording of transactions and payroll calculations. Come reporting time, they’re already intimately familiar with your finances and are perfectly placed to prepare your BAS documents.
A bookkeeper doesn’t have to be a BAS agent if they are directly employed by your business. However a lot of businesses are too small to have a part or full time bookkeeper. Others don’t want the ongoing financial and legal burden of employing an additional person in the business. In these situations, many business owners outsource their bookkeeping to a contract bookkeeper or bookkeeping firm. It is these outsourced bookkeepers, providing BAS services in exchange for a fee or other reward, who must be a registered BAS agent.
A registered BAS agent has a lot to offer you. To qualify as a BAS agent, a bookkeeper has to meet a number of essential requirements:
· They need a qualification like the Certificate IV in Bookkeeping, and must also complete approved courses in GST & BAS principles.
· They complete at least 1,400 hours relevant experience in the last three years (in some cases more).
· They need to pass a “fit and proper person” test which excludes people who’ve been imprisoned or committed one of any number of financial crimes.
· They must maintain professional indemnity insurance (which gives you protection against loss as a customer).
· They must undergo continuous professional education.
That means they have the training, experience and expertise to prepare your BAS correctly! They’ll have the ability to maximise your return (or at least minimise your obligations) while also saving you from Australian Tax Office fines – or worse. A BAS agent also offers you a number of protections.
· You get protection under the ‘safe harbor’ provisions in the Tax Administration Act 1953. This means if agent is responsible for making a mistake like forgetting to lodge a document on time, or making a misleading or false statement which causes a shortfall in tax, you may not be liable for administrative penalties the ATO can impose.
· All BAS agents have professional indemnity insurance which provides important consumer protection. If the agent makes a mistake that costs you money, then you can make a claim to cover your losses. Obviously the agent also benefits!
Double check registration
Sadly there have been a few cases in the last few years where people have pretended to be a registered BAS agent or failed to understand the limits of their registration as an agent. If you use an unregistered agent, they may not have the skills or experience to accurately complete your BAS. At the same time, you lose the legal and financial protections a BAS agent offers.
The Tax Practitioners Board keeps an online register of Tax and BAS agents which you can find here. It takes just a few moments. Don’t be afraid to ask your BAS agent for their registration details! It’s a great accomplishment and excellent “stamp of approval” for any bookkeeper. They should be proud of their registration!
Make sure you have the right agent
BAS agents are sometimes confused with Tax agents. They have separate registrations, with different education and experience requirements. Make sure you have the right agent for the job! In the simplest terms:
· Tax Agents prepare all kinds of tax returns (including BAS) and other tax services
· BAS Agents only prepare and lodge BAS and other BAS-related services
If a BAS agent charges you to prepare your income tax return, it’s effectively the same as if a completely unregistered person did it! The BAS agent is putting themselves at risk being fined and losing their BAS registration – permanently. While a Tax Agent can prepare your BAS too, they normally charge at a higher rate and likely won’t be able to offer many of the daily bookkeeping services that make BAS Agents such an attractive proposition for a business.
William Cowie is a content production specialist for Inspire Education, one of Australia’s leading vocational education organisations. Inspire Education provides training in Bookkeeping, Health and Safety, Training and Assessment and a range of other disciplines.