Topic: ATO simplified BAS scheme for cash basis users

Last reviewed: 09/12/2025

Focus: Accounting Practice Analysis

ATO Simplified BAS Scheme for Cash Basis Users

The Australian Taxation Office (ATO) offers the Simplified Business Activity Statement (BAS) scheme to help small businesses manage their GST reporting obligations more efficiently, particularly for those using a cash basis accounting method. This scheme significantly reduces the complexity and time involved in lodging BAS by providing a streamlined reporting process tailored to cash basis taxpayers.

Featured Answer: The ATO's Simplified BAS scheme allows cash basis users to report only essential GST information, reducing compliance burdens and paperwork. This streamlined process is designed to save time and simplify tax obligations for small businesses using cash basis accounting.

What is the ATO Simplified BAS Scheme?

The ATO Simplified BAS scheme is a streamlined reporting method designed to reduce the administrative burden for small businesses, specifically those using cash basis accounting. Under this scheme, businesses are only required to report the GST collected and the GST paid, omitting more complex calculations. Introduced as part of the ATO's effort to simplify tax obligations, the scheme aims to enhance compliance while reducing the likelihood of errors.

How Does the Simplified BAS Scheme Benefit Cash Basis Users?

The Simplified BAS scheme offers several benefits for cash basis users, including:

Reduced Reporting Requirements: Businesses need only report GST on sales (1A) and GST on purchases (1B), along with total sales.
Time Efficiency: By limiting the reporting to key figures, businesses can complete their BAS in significantly less time.
Lower Compliance Costs: Simplified reporting can reduce the need for extensive accounting support, thereby lowering associated costs.
Decreased Error Rates: With fewer figures to calculate and report, the likelihood of errors in BAS submissions is minimized.

What Are the Eligibility Criteria for the Simplified BAS Scheme?

To participate in the Simplified BAS scheme, a business must:

Be registered for GST
Operate under a cash basis accounting method
Have an annual turnover of less than $10 million AUD

Eligible businesses are automatically included in the scheme, ensuring they can benefit from reduced reporting without needing to apply or register separately.

Practical Example of Using the Simplified BAS Scheme

Consider a small business, "Aussie Crafts," which operates under a cash basis accounting system. With an annual turnover of $500,000, Aussie Crafts is eligible for the Simplified BAS scheme. Previously, Aussie Crafts had to report detailed GST information, including adjustments and capital purchases. Now, under the Simplified BAS scheme, the business only reports:

1A: GST on sales
1B: GST on purchases
G1: Total sales

This change reduces the time spent on BAS preparation from several hours to a matter of minutes each quarter, allowing Aussie Crafts to focus more on business growth rather than administrative tasks.

What Are the Legislative and Regulatory References?

According to the Australian Taxation Office and relevant legislation, including the A New Tax System (Goods and Services Tax) Act 1999, the Simplified BAS is a legitimate option for eligible small businesses. The ATO guidelines (as per their official website) provide comprehensive step-by-step instructions for participating businesses.

Frequently Asked Questions

Q: What information do I need to report under the Simplified BAS scheme?

A: Under the Simplified BAS scheme, you report only GST on sales (1A), GST on purchases (1B), and total sales (G1).

Q: How do I know if my business is eligible for the Simplified BAS?

A: Your business is eligible if it is registered for GST, uses a cash basis accounting method, and has an annual turnover of less than $10 million AUD.

Q: Can I opt-out of the Simplified BAS scheme?

A: The scheme is automatically applied for eligible businesses, but you can choose to report more detailed information if preferred. However, opting out of the simplified process is generally not recommended due to the benefits provided.

Q: Will using the Simplified BAS affect my eligibility for GST credits?

A: No, using the Simplified BAS does not affect your eligibility for GST credits. You will still claim credits for the GST paid on purchases.

Q: How often do I need to lodge the Simplified BAS?

A: Typically, the Simplified BAS is lodged quarterly, but your specific reporting cycle may vary depending on your business's GST registration conditions.

Next Steps

For businesses considering the Simplified BAS scheme, leveraging technology can further enhance efficiency. Platforms like MyLedger by Fedix offer automated solutions that integrate seamlessly with ATO requirements, streamlining your BAS process even further. Learn more about how Fedix can help automate and simplify your accounting tasks, providing peace of mind and allowing you to focus on growing your business.

Disclaimer: Tax laws and regulations are subject to change. It is advisable to consult with a qualified tax professional to understand how these changes may affect your specific situation.