BAS - Payment of GST & PAYG

The following setup and overview guide will greatly assist you when processing your Business Activity Statement (BAS).

Set up

Overview

A Business Activity Statement (BAS) is the form you return to the Australian Taxation Office (ATO) to report your tax liability or to claim a refund. JCurve automatically calculates the amounts that appear in each box on the BAS, based on information within the system.

Note: Any Activity Statement produced by JCurve is intended for record-keeping purposes only. It forms the basis of preparing and lodging the BAS electronically and may not contain all elements required. For example Company installments. It is not intended to be the definitive BAS return.

Tax Control Accounts

There are a number of tax control accounts set up to track your tax liabilities and provide more detail on your financial statements. Tax control accounts appear as Other Current Asset or Other Current Liability accounts in your general ledger reports and chart of accounts.

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Each Tax Control account is defined as a Purchase or Sale Tax Account Type.

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You can view the tax liability for each tax control account on your balance sheet and other financial reports.

 

Tax Codes

Each Tax code, is set up with a default Purchase Tax account and Sales Tax Account.

For the GST tax codes this is:

Purchase Tax Account     – GST Paid         (on Vendor Bills)

Sale Tax Account            – GST Collected (on Customer Invoices)

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The “Available on” field ensures that the Code only appears on sales or purchase transactions, despite the default tax account settings.

As transactions are posted, the GST accumulates in the “GST Paid” & “GST Collected” accounts on the Balance Sheet, based on the nature of the transaction, purchase or sale, despite what actual tax code was applied. For example, if NCT was used on an invoice item (sales transition) it would accumulate in the “GST Collected” account, and thus appear on the BAS in the Sales related cells, not the purchase cells.

 

Allocating Tax Codes/Accounts to Cells on a BAS

Navigate to Setup > Company > Business Activity Statement

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The BAS setup reflects where these taxes are displayed on the Quarterly BAS or Monthly Activity Statement.

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Note: the accounts used for W1, W2 and W3 are based on the default JCurve Chart of Accounts.

Getting the official details from the ATO

The ATO have a detailed webpage showing you what does and does not go in each cell.

Business Activity Statements

Monthly Processing 

Calculate PAYG Liability

Typically the calculation of the PAYG liability will occur after month end.  Finance Managers should strive to calculate the PAYG liability and raise the ATO bill by the 10th of the following month. Actual payment can occur closer to the due date of the 21st of the month.

†Navigate to Reports > VAT/GST > Business Activity Statement

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Set the Tax Period & PAYG Tax Period filters at the bottom of screen to the correct period.

Generally an SME only pays PAYG on a monthly basis. As a consequence, ignore the GST related amounts.

†Review the Balance sheet and ensure the PAYG liability account reconciles to the PAYG Tax Withheld displayed on the BAS statement.

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Review the month end Employee Payment Summary report from the Payroll system and ensure it also agrees to the PAYG Tax Withheld displayed on the BAS statement.

If all reconciles create a Vendor Bill for the ATO.

 

Create an ATO Bill for PAYG

Raise a Bill into the system (payable to the ATO) for the amount of the PAYG, ensuring the bill is coded to 2334 PAYG: Remitted to the ATO.The effective date of the bill should be in the month after the BAS report period, to avoid distorting calculations for the next BAS period. For example the bill should be dated October for the Sep BAS amount.

Alternatively if you code the bill directly to 2332 PAYG, ensure the date of the bill is the end of the relevant month.

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Ensure the Terms are 21st Month. (this should be the default on the ATO Vendor record).

The Bill will now appear on the Dashboard reminders as an outstanding Bill 5 days prior to being due, to reminder the Accounts Payable Clerk.

Pay PAYG

† To pay the PAYG, simply go to Transactions > Payables > Pay Single Vendor and select Australian Taxation Office as the Payee.

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Quarterly BAS

Calculate GST & PAYG Liability

Navigate to Reports > Tax > Business Activity Statement

Set the Tax Period & PAYG Tax Period filters at the bottom of screen to the correct period.

The Tax Period impacts the GST calculations.

The PAYG TAX Period impacts the PAYG instalments.

If your organisation pays

PAYG Monthly and GST Quarterly, then set the filters accordingly. For example:

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PAYG & GST Quarterly:

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PAYG & GST Monthly

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Press Refresh to display the data.

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Reconcile BAS

GST on Sales Summary

Clicking on any of the sales values displayed in the BAS, e.g. $228,294 at G1 will display the list of transactions on the GST on Sales Summary. Alternatively the report can be found under the Reports > Tax menu. However the best report to use is the JCURVE Custom report that displays transactional data summarised by GST Tax Rates.

Reports > Saved Reports > JCurve GST on Sales Summary

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GST on Purchases Summary

†Similarly using the custom JCurve report for GST on Purchases Summary is the preferred option.

†Reports > Saved Reports > JCurve GST on Purchases Summary

 

Review & Reconcile GST reports

†Print reports and review the calculated tax rates to ensure all entries are properly recorded.

Ensure the totals per Tax rate are correctly displayed on the BAS for Sales.

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BAS:

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Ensure the totals per Tax rate are correctly displayed on the BAS for Purchases.

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BAS:

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Cross-Check to Balance Sheet

Ensure the GST & PAYG amounts can be reconciled to the Balance sheet.

In the case of an Accrual Based Reporting the values should be exactly the same.

†For Cash Based Reporting the Balance sheet will reflect GST on an accrual basis compared to the BAS on a cash basis. A reconciliation of transactions will be required.

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Create ATO Bill for GST & PAYG

Net Payment to ATO

If your organisation has a net Payment to the ATO, then you can raise a bill for the various components ensuring it is coded to the respective “Remitted to ATO” child accounts.

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Ensure the Terms are 21st Month.

† Date of Bill is the month after the report period (and before 21st of Month). For example 15/10 for the Sept BAS liability.

Where reporting is on an Accrual basis, this will clear the opening balances in the current month (e.g. Oct) for Payroll Liabilities: PAYG,

†GST Paid & GST Collected, and create an Accounts Payable amount against the ATO.

†Note: We code the “GST paid”, “GST collected” & “PAYG” to child accounts so that we do not understate the next month’s BAS values and cause difficulties in reconciling. Secondly, it allows us to retrospectively view how the BAS amounts where created (i.e. re-run the BAS report for a prior period). This provides a strong audit trail throughout the year.

The Bill will now appear on the Dashboard reminders as an outstanding Bill 5 days prior to being due, to reminder the Accounts Payable Clerk.

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Net Refund

 

Raise a Vendor Credit

Go to Transactions > Purchases/Vendors > Enter Vendor Credits

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Enter the ATO as the Vendor.

Enter the Date as the Last Day of the BAS quarter, e.g. 31st March.

Under the Expenses & Items Tab Uncheck Auto Apply.

Under Expenses TAB, enter accounts & amounts as per the BAS print out, ensuring the Total Amount and the Unapplied Amount equal the expected refund.

Press Save.

Raise a Deposit

1. Raise a Deposit when the refund is received, posting it to the Accounts Payable Account.

2. Go to Transactions > Bank > Make Deposits

3. On the Items Subtab click the Other Deposits Subtab

4. Enter the ATO as the vendor.

5. Enter the Amount.

6. Enter the 2000 Accounts Payable account beside the Amount.

Note: Be sure this is the same Accounts Payable account on the Vendor Credit., e.g 2000 Accounts Payable.

7. Click Save.

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Match Credit to Deposit

1. Go to Transactions > Purchases/Vendors > Pay Single Vendor

2. Enter the Date of the Deposit.

3. Enter ATO as the vendor. The bill credit and the deposit appear in the list at the bottom of the page.

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4. Check the boxes in the Apply column next to the bill credit and the deposit.

5. Click Save.

 

Pay the GST/PAYG per the BAS 

The Accounts Payable clerk will have the ATO Bill appear on their Dashboard reminders as an outstanding Bill 5 days prior to being due.

To pay the GST/PAYG, simply go to the Pay Bills routine where you will find the Bill outstanding ready for payment.

Year End

Once the Accountant has finalised the GST & PAYG remittance for the total year, then you can transfer via a journal the amounts remitted to ATO to the parent accounts for “PAYG”, “GST Collected” and “GST Paid” so that the New Year starts with the net figures.

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