The Hidden Costs Of An Incorrect BAS
BAS, it seems easy enough, right? You pull the right reports from Xero, fill in a form and Bob’s your uncle. Done!
Wrong.
It would save me a lot of whispering ‘WTF’ under my breath if it were in fact, that simple.
The truth is, submitting an incorrect, late or not submitting your BAS at all can result in some *gulp* hefty fines. That’s not even counting the man-hours to get that BAS tax-man ready.
If you’ve been DIY-ing your BAS or outsourcing to someone who is not a registered BAS agent you’re going to want to read this.
Hiring unqualified help
I know, I know, there are so many consultants out there who are savvy with finance and a gun with Xero. It makes sense to enlist their help.
But. BUT.
If you’re going to outsource, only a Qualified BAS Agent can lodge your BAS. Or, if it’s your business, you can lodge too.
If your contractor does lodge your BAS and they don’t have the relevant qualifications, they can be fined up to $55,500 for an individual. Yeah, it’s serious.
Lodging BAS Late
Late BAS lodgements incur a failure to lodge penalty. Now, if you’re using a BAS Agent, they have an automatic extension but if you miss that date, you’re still liable to pay a late fee.
I see late fees dolled out all the time and if you want to avoid paying one, you must meet the due date.
What do the penalties look like?
- Small entities with a turnover of less than $1 million are issued a fee of $222 per penalty unit capped at 5 penalty units ($1110-).
- Medium entities with a turnover of over $1 million and below $20 million the penalty is doubled
- For large entities with a turnover of $20 million or more are the penalty decided is multiplied by FIVE!
Considering BAS is due for lodgement four times per year, you want to make sure it’s done on time. These penalties also apply to all the other ATO lodgements you need to do.
The clincher – any penalties are not. tax. deductible. Here are all the nitty-gritty details from the ATO.
Even if you ARE working with a BAS agent, they can’t work miracles if you don’t reply to their information requests so please, don’t ignore your long-suffering BAS agent.
And if you’re doing it yourself and you’re strapped for time, you are leaving yourself open to *$4,440 of late fees per year. Imagine what you could spend that money on?!
*maximum amount based on businesses with a turnover of less than $1 million per year.
Paying BAS Late
It’s an age-old story…you thought you had your BAS calculated to perfection only to learn you missed something. Suddenly your BAS payment exceeds your budget.
So you lodge it on time, then you um and arr on it trying to find a workable solution so you can pay the thing. Meanwhile, the ATO is clocking up late payment fees.
While late fees aren’t huge (the annual GIC – General Interest rate is currently 7.01%), you get charged interest, wait for it – daily! So it will add up quickly and you’re still throwing the money you could have spent on something beneficial, down the drain.
Lost Hours
If you’re running a business, it goes without saying every single hour counts when growing your empire.
If you don’t like the thought of wasting 100 hours a year on your BAS and accounts, you might want to reconsider your DIY approach.
What could you achieve in 100 hours?
- A new product range?
- A slick promotional campaign?
- Or…maybe even some time off?!
Also, how much is that 100 hours costing you? If you average out your hourly rate, say $65p/h, you’re spending $6,500 on your bookkeeping anyway.
What if I told you you could have Team AFY on the tools for as little as $4,000 per year? You’d be rethinking those lost hours and endless BAS related headaches, wouldn’t you?
Save your time, money & sanity
Is BAS making you batty? Does payroll make your heart pound? Do finances make you say four-letter words?
If you’re sick of reconciling a shoebox full of receipts every 3 months and you’ve had it up to here (*hand gesturing to above head*) working out XERO and the like, you need to outsource your accounting.
Take a deep breath and put the calculator down. I’ve got you.
I help women in business flourish through bespoke bookkeeping services. When you work with me, you’ll feel confident in your numbers so you can get back to growing your empire.
Book a call with me and make 2022 work for YOU.
