What is a BAS Agent?
A new type of “Super-Bookkeeper”. BAS Agents are changing the bookkeeping and accounting industry for the better
Yes, it’s BAS time again. And if you’ve been completing your BAS on your own, you probably just sighed really loudly and thought how much easier it would be to get someone else to lodge the BAS for you…
“Well, I could get my accountant to do them for me but he charges too much already” – did this come to mind? Even if this is true, believe it or not, your accountant is not necessarily the best person to prepare your Activity Statements.
Let’s take a step back and be clear here. Your Business Activity Statement (BAS) is a declaration to the ATO of your business’ financial activity over a fixed time period, either monthly, quarterly or annually. It comes as a distinct, yet innocuous-looking pink form that is the bane of existence for many self-employed workers. A BAS Agent is authorised to prepare and lodge BAS returns on your behalf and provide advice on BAS-related items (your day-to-day business taxes such as GST and PAYG – pretty much anything listed on your pink form).
The official role of a BAS Agent is relatively new and was introduced in 2009 to regulate the BAS related services offered by contract bookkeepers. Until this point, most contract bookkeepers were quite merrily calculating and lodging their client’s GST and PAYG obligations, with no training or experience required. For business owners, this was a great alternative to their accountant’s rather large hourly rates, and so the service of calculating and lodging BAS was almost expected from anyone offering bookkeeping services. Fine on one hand, but where was the accountability? What if they made a mistake? Or worse, didn’t actually know the law to lodge by? Quite frankly, it wasn’t pretty and certainly wasn’t fair – if accountants could be fined or deregistered for poorly treated tax calculations (including BAS-related taxes), why could contract bookkeeper’s get away with it?
The Tax Practitioner’s Board passed a bill in March 2009, amending the Tax Agent Services Act. It offered a very generous transitional period for contract bookkeepers to meet the newly set criteria to become a registered BAS Agent. This criteria covered education, over 1000 hours of experience in BAS services and meeting the “fit and proper person test”. Plus they need to take out Professional Indemnity Insurance and soon, will also need to accrue CPD points. Not quite as involved as the requirements to be a registered tax agent, but many agree that it suits the scope of services a BAS agent can perform. From 1st of March 2010, only contract bookkeepers who are registered with the Tax Practitioners Board as a BAS Agent are permitted to render BAS services to their clients. Many bookkeepers had to complete or update their educational requirements (mostly surrounding GST legislation), but those who were serious about their work were registered the second they could sign on.
So, as a business owner, what does engaging a BAS Agent mean for you? In one word – confidence. There is a strict code of conduct imposed upon BAS Agents, with termination of registration and heavy civil penalties incurred for misconduct (visit www.tpb.gov.au for more information). I can guarantee you there will be very few (if any) errors in your bookkeeping if completed or reviewed by a BAS Agent! And if there are (and we are still human) you can be sure they will realise in a panic at midnight and correct it first thing the next day. They are educated and knowledgeable of the tax law surrounding BAS, which should in turn maximise your BAS returns. And if you are a bit behind in your BAS lodgements (and we know some of you are!), engaging a professional BAS agent shows the ATO that you are serious about getting your paperwork in order and will help to ensure less pain around the back pocket area at tax time.
However, at the end of the day, whether using a BAS agent or delegating to an employee, the ATO will still chase you for incorrect figures. Why? Because the figures they lodge are only as good as the information you give them. So give your BAS Agent some room to work. Book them in to do your BAS early on in the due month, giving you both plenty of time to work through missing documents and get the money together to pay your BAS. Answer their questions in a timely manner (not the day before you have to lodge). Inform them of possible changes in your business so they can prepare how this affects your GST or PAYG. Let them liaise with the ATO for your payment plans or heaven forbid, overdue lodgements. And most importantly, make sure they have all of your receipts (yes, all of them) and your bank statements (yes, every single one). It’s a team effort.
Tips for small businesses
- You can find out if a bookkeeper is a registered BAS Agent by checking the public register of the Tax Practitioners Board – http://www.tpb.gov.au/tpb/agent_register.aspx
- It’s up to you to make sure that your records are accurate and current.
- Enter all data, get it up to date and stay on top of it
- Have it reviewed by a BAS Agent or Accountant before lodging your BAS
- Keep in touch with your accountant or BAS Agent to discuss what you can claim and what additional items you can claim on your BAS (eg. Fuel Tax Credits) with your accountant. You could literally save yourself thousands of dollars!