GST and the BAS in your cashflow

GST, short for goods and services tax, is a 10% tax on most goods, services and other items sold in Australia. Some sales are GST-free. A business must register for GST once its GST turnover is $75,000 or more.

Once registered, a business includes GST in the price of what it sells. It can also claim credits for the GST in the price of things it buys for the business. It reports both to the ATO, then pays the difference or gets a refund.

How GST applies to your farm, and which of your sales include it, is a question for your accountant. We don't give tax advice. This lesson is only about where GST sits in a cashflow.

The BAS

The business activity statement, or BAS, is the form a business uses to report GST and some other taxes to the ATO. Your accountant or bookkeeper usually prepares it.

The ATO says the GST reporting cycle can be monthly, quarterly or yearly:

• Monthly if GST turnover is $20 million or more. A smaller business can choose monthly, or the ATO can ask for it.
• Quarterly for most businesses under $20 million.
• Yearly for some businesses that registered by choice, with GST turnover under $75,000.

For a quarterly BAS, the ATO lists these due dates:

Different dates may apply if a registered tax or BAS agent lodges for you, so check with yours.

How to show it in the cashflow

We build the trading lines without GST and add one separate GST line. That keeps sales and costs easy to check against the budget. The GST line then shows each BAS payment or refund in the month it's paid or received, so the bank balance still comes out right.

On a livestock farm, the GST line can swing. In a quarter with big sales, you may owe the ATO. In a quarter with heavy spending and few sales, you may get money back.

Watch the timing

A BAS bill can land in the same month as rates or insurance, when the overdraft is already deep. A refund can also take a while to arrive after you lodge. Put each payment or refund in the month it will actually move, using your own due dates.

When you update the cashflow each month, check the next BAS is in the right month. The monthly money routine is a good time to do it.