90-10 Meaning of BAS Service
A BAS service is a tax agent service:
- that relates to:
- ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a BAS provision
- advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise, under a BAS provision
- representing an entity in their dealings with the Commissioner in relation to a BAS provision
- that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:
- to satisfy liabilities or obligations that arise, or could arise, under a BAS provision
- to claim entitlements that arise, or could arise, under a BAS provision
The Board may, by legislative instrument, specify that another service is a BAS service.
BAS provisions can be understood to be completion of the payable amount boxes on the BAS.
- GST amount collected or paid
- WET payable or refundable amounts
- Fuel Tax Credit amounts
- PAYG Instalments amount payable
- FBT Instalment amount or credit claim
- Luxury Car Tax amounts
- PAYG Withholding amount payable
BAS provisions also relate to other services:
- Superannuation Guarantee Contributions for employees and contractors
- Calculation and lodgement of Superannuation shortfall
- Dealing with superannuation payments made through a clearing house
- Completing and lodging Taxable Payments Annual Report (TPAR) on behalf of a client
- Lodging a tax file number (TFN) declaration on behalf of a client
- Applying to the Registrar for an Australian Business Number
Explanation and Clarification
Classroom or Onsite Training
- general training on the use of software is not a BAS Service
- general training around how GST works or is reported in the software is not a BAS service
Install and Configure Software
- general software / bookkeeping / accounting configuration - No
- specifically determining what GST codes apply when - Yes
- advising on legal compliance of the business tax invoice - Yes
- configuring how a BAS like report is to be produced - Yes
- implementing a default GST code list provided by a registered Agent to the business - No
If the client is relying on this install and configuration service to help that client ascertain their future GST / BAS obligations then it is a BAS Service.
- following instructions - No
- transfer data onto a computer program - No
- enter data - No
- code transactions (based on instructions) - No
- process payments - No
- prepare bank reconciliations - No
- If the client is relying on another registered BAS / Tax Agent - No
- preparing an approved form - Yes
- lodging an approved form - Yes
- giving advice about a BAS provision - Yes
- “transacting” with the ATO on behalf of a client - Yes
- anything and everything where work is reviewed by another registered BAS agent - No
- reconciling facets of the accounting records for a period - No
- providing generic reports - No
- preparing a report that is used to prepare the BAS - Yes
One aspect of the answer is: when are you relied on for providing a certain level of knowledge or expertise in helping your clients (in relation to a BAS Provision).
A person is engaged by a client to do everything from and including and up to:
- opening the mail
- sorting out the financial related items
- banking the cheques
- identifying and processing invoices form suppliers
- issuing invoices for the business
- entering all the transactions into the books of the business (be that manual or computer)
- includes attaching a GST code according to a system that others have advised or others will review
- reconciling the bank account
- maybe even reconciling GST control accounts
But then the information is all provided back to the business or to another person who uses all that information in the preparation of the BAS for the business.
Who is being relied on?
The subsequent person. It would appear it is not reasonable for the processing person (who may have attached GST codes and checked that the books are correct) to be deemed to have been relied on for preparation of a BAS that still requires a lot further processing and application of knowledge.
A Person is engaged for doing everything in Scenario 1 above but also the business seeks the person to:
- ensure that the BAS is prepared, lodged and paid
- ensure that the GST is materially correct as to calculation and interpretation
- provide certainty to the business that they are complying with BAS provisions
It is fairly clear that person is now being relied on for their knowledge and expertise in helping the business comply. Therefore they are certainly providing a BAS Service.
Which of the above services counts as BAS Services (in scenario 2 where they have done everything in scenario 1 as well as scenario 2)? We would argue that it all does. Because all along the processing line above the BAS Agent is using that level of knowledge and expertise to be relied on by the client in ensuring every aspect of the process is correct in ascertaining the correct answers in relation to BAS Provisions.
Which of the above relates to relevant experience?
Maybe not the opening of the mail, but from every other part of the process we would argue that the tasks involve a substantial use of knowledge and expertise of BAS Provisions to get it right and get it right efficiently.
A person is engaged for none of the task involved in Scenario 1, but they do:
- come in to check and review that work performed by others
- and all of scenario 2
It is clear that this person is also being relied on and therefore they are providing a BAS Service. All of that work would be considered relevant experience.
A person is engaged to process payroll on a regular basis:
- they attend weekly, fortnightly etc.
- they take the time and work records and process the pay either manually or through a system, but following a system of process and procedure
Similar to scenario 1, we don’t believe this person is providing a service that stands alone and can be relied on by the business therefore it is not a BAS Service.
A person is engaged to set up a payroll system
They come in to do the quarterly review of payroll and the reporting for the BAS
They come in annually to reconcile wages etc and prepare the payment summaries
We believe all of these are services where it is clear the client is relying on the person to get the BAS provision (PAYG Withholding) correct and hence it is a BAS Service and must be provided by a BAS Agent.
So, what is a BAS service? Are you being relied on to give the client confidence that their BAS provision obligations are being met?
If you ask questions of others for interpretation or explanation of the system then no you aren’t being relied on and you aren’t providing a BAS service.