Simpler BAS for small business

Summary

Small businesses, tax professionals, software developers and industry representatives have all told us that GST reporting on the business activity statement (BAS) and the associated bookkeeping should be made easier.

To address this, we are working closely with you on the Simpler BAS project. Small businesses will only need to report:

  • 1A GST collected
  • 1B GST entitled to be claimed
  • G1 Total sales.

Simpler BAS will make it easier and quicker for small businesses as we will only require transactions to be classified with a simple ‘yes’ or ‘no’ for GST. This will deliver significant time and cost savings.

The GST Calculation worksheet and associated suite of GST software tax codes will no longer need to be supported for small business. 

Simpler BAS will become the default GST reporting method for all small businesses from 1 July 2017.

Engagement with software developers, tax professionals and small business is crucial to the successful implementation of the Simpler BAS changes. We will keep you informed of our ongoing consultation. 

Phase 1 testing (1 July – 30 September 16) – Preliminary insights into Simpler BAS

Throughout 2016–17 we will be testing the Simpler BAS bookkeeping solution with the help of approximately 2,000 small businesses, software developers and tax professionals. The Phase 1 Alpha testing report outlines the preliminary perceptions about Simpler BAS from 13 tax professionals and 192 small business participants.  Initial findings after the first quarter suggest the following.

  • Simpler BAS would make it quicker, easier and reduce the cost of compliance for GST.
  • Concerns have been expressed by participants about transitional costs associated with manually re-configuring their GST settings in accounting software.
  • Reduced GST tax codes are producing more accurate classifications of transactions with on-going bookkeeping.
  • The re-configuration process should retain the tailored automation settings that small business has invested in setting up.
  • Tax practitioner participants would recommend the majority of their clients adopt the Simpler BAS GST settings.

Phase 1 testing identified some software constraints, design issues and potential systems changes for software developers to consider, including:

  • provide an option to elect to use Simpler BAS tax code settings or retain more complex tax code settings
  • functionality to add new tax codes that map to both sales and expenses
  • old tax codes should be made inactive to avoid unnecessary end user complexity
  • provide an automated process for existing businesses to update their tailored GST settings, should they elect to use Simpler BAS settings.

Further recommendations for software developers and the complete testing findings can be seen in the Phase 1 (July – September 2016) Alpha Testing Findings report. 

Software developers that are impacted by Simpler BAS can contact us directly at SimplerBAS@ato.gov.au or SIPO@ato.gov.au.

Status

December 2016 – user testing is ongoing

Participants include small businesses, tax professionals and software developers from MYOB, Intuit Australia, Sage and Reckon. Our findings will be made available periodically throughout 2016–17.

Priority spec kit

We are also releasing a series of documents that make up the simpler BAS priority spec kit. The purpose of these documents is to provide software developers with guidance for the system impacts associated with Simpler BAS.

The priority spec kit will assist software developers in understanding the following.

  • The broader context for the Simpler BAS SBR changes, including eligibility thresholds, default rules for GST reporting methods, changes to labels on existing BAS form types, administrative rules for revisions, adjustments, backdating and an interim arrangement for new to business from January – June 2017.
  • The business context surrounding activity statement (AS) interactions.
  • The interactions that are available to tax practitioners to view relevant information about their clients, including which clients are using the simpler BAS reporting method.
  • The schedule and release of the remaining Simpler BAS specs.

Priority spec documents are available for download below.

Key Dates

  • 3 May 2016 – Government announcement
  • 1 July 2016 – Testing commences
  • 1 July 2017 – Simpler BAS goes live

Consultation

2016

  • February – Co-design workshops with participating software developers
  • May – Recruit small business and tax professional participants for quarter 1
  • July – Testing commences
  • August – Simpler BAS update at the ABSIA webinar
  • September – Recruit small businesses and tax professional participants for quarter 2
  • November – Recruit small businesses and tax professional participants for quarter 3
  • December – Release of priority specs and phase 1 findings

2015

  • June – Concept discussions with various software developers
  • September – Presentation at ABSIA Conference
  • September/October – Research interviews with a range of small businesses and tax professionals
  • October – discussions with several software developers following interest from the ABSIA forum
  • November – Expression of interest to participate in GST bookkeeping testing
  • November – Last call to participate in testing

Australian Business Software Industry (ABSIA): Special Interest Working Group

The Australian Business Software Industry (ABSIA) is in the process of forming a special interest working group that will represent the industry in relation to transactional and indirect tax related changes, including Simpler BAS. This group will provide a whole of industry perspective to influence and shape the end state system solution.

If you are interested in becoming a member of the special interest working group or receiving ABSIA updates email ABSIA.

Links and documents

Simpler BAS Phase 1 Alpha Testing Findings report (PDF, 499kB)

Priority spec documents

Simpler BAS announced at the delivery of the federal budget (PDF, 920kB)

Simpler BAS preliminary solution overview (PPT, 445kB)

Simpler BAS client metrics and population breakdown (PDF, 420kB)

Preliminary design issues for software developers to consider (PDF, 163kB)

Overview of research and consultation (PPTX, 273kB)

Feedback and questions

Feedback can be provided to SimplerBAS@ato.gov.au or SIPO@ato.gov.au.