BAS burden a top priority for SMEs

Findings from Scottish Pacific SME Growth Index, which polled over 1,200 SME owners, have revealed that 26.7 per cent of small businesses with an annual turnover of less than $10 million identified BAS reporting as a “major drag on business performance”.

Interestingly, larger SMEs with a turnover of $10 to $20 million also rated the need for BAS simplification, with one in five listing it as their top priority.

The figures come some time after the ATO rolled out Simpler BAS on 1 July 2017 as the default method for small businesses with a GST turnover of less than $10 million, with the need to only report on G1 total sales, 1A GST on sales, and 1B GST on purchases.

Professionals have also questioned the effectiveness of Simpler BAS and its impact on reducing red tape for small businesses.

Carbon Group managing partner Jamie Davison said the new format was “not as simple as the ATO makes it out to be”.

“It seems like in the background, you still have to calculate all the things that you did before but all you’re doing is filling out less fields, but to arrive at those fields you still have to do everything as you did before,” said Mr Davison.

“The end product is that you’re just filling in less but to arrive at the end product you still have to calculate everything else anyway.

“We’re finding that it probably takes longer to do the Simpler BAS than what it takes to do the traditional way.”

However, Institute of Certified Bookkeepers executive director Matthew Addison believes Simpler BAS is a better system by addressing unnecessary reporting corrections.

“A business still needs to understand GST, still needs to understand how to complete a BAS, still needs to get a BAS right,” Mr Addison said.

“Although the reporting is simpler — GST or not, the application of GST law to a business circumstance is not simpler.

“Prior to Simpler BAS, unnecessary corrections and reallocations were performed between free reporting and not reported — it had no impact on the amounts paid or the end reporting but it needed to be correct on the form,” he added.

“Now the form has less reporting but the same end result — this is a better system.”