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Instalment Activity Statement

Instalment Activity Statement

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IAS stands for Instalment Activity Statement. Think of it as a gap filler when you don’t have to lodge a BAS for a certain period.

Instalment Activity Statement

The Instalment Activity Statement (IAS) covers PAYG instalments, PAYG withholding and ABN withholding. These three – nothing else. So no GST.

Your IAS comes in, when a particular period is not covered by your BAS. For example, when you report PAYG W on a monthly basis but your GST on a quarterly basis.

PAYG Instalments

The ATO will tell you whether, when and how much you need to pay in PAYG instalments on your so-called instalment income.

Your instalment income includes dividends, interest, profits you made as a sole trader or through a partnership and other income that is not subject to any other withholding, but excluding capital gains. 

PAYG Withholding

For PAYG withholding you are either a small, medium or large withholder depending on your PAYG withholding. 

As a small withholder (less than $25,000 of PAYG W) you report and pay quarterly – through your BAS if you report GST quarterly, otherwise your IAS.

As a medium withholder ($25k to $1m of PAYG W) you report and pay monthly – whether through your BAS or IAS depends on what you do for GST.

Large withholders (more tha $1m) are complicated, so let’s put those aside.

ABN Withholding

If a supplier does not provide an ABN to you for goods and services of more than $75 (excluding GST), you need to withhold the top rate of tax from the payment and report this through your IAS or BAS.

IAS v BAS

If you are not registered for GST, you don’t have any Business Activity Statements (BAS) to worry about. All your reporting is done through an IAS – either monthly, quarterly or annually.

But if you are registered for GST, then it gets more complicated, especially if your GST and PAYG instalments or withholding are on different reporting cycles.

You might do your BAS quarterly but might be a medium withholder for PAYG Withholding and hence need to report PAYG W on a monthly basis. In that case you do both. You lodge your BAS quarterly, but then lodge an IAS for the months in between.

Does this make sense so far? Just call me if you get stuck. My number is 0407 909 779. I am Heide.

 

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Common Tax and Accounting Muck Ups

Accounting Tips for Your Business

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Avoid some common mistakes with these 15 accounting tips for your business. 

15 Accounting Tips For Your Business

When you start a new business, the last thing on your mind is accounting and tax. And you are right. Your focus needs to be on the road ahead.

But your numbers are still important. You lose control without them. The good news is that this is not as hard as it sounds.

Here are 15 tips to help you get and keep what is yours. And avoid a few potholes along the way.

1 – Put a Value on Your Time

You only got 24 hours. And what you don’t do is as important as what you do. So delegate the parts that are not worth your time. 

2 – Get Xero

There are various accounting softwares around, but just go with the flow and get Xero. You will be glad you did.

3 – Collect Receipts

Missing receipts can cost you a lot of money later on. So best to stay on top. Just download Hubdoc – a receipt app that comes free with Xero.

4 – Get a Bank Feed

A bank feed will save you time and give you up-to-date numbers. Allowing you to focus on more important things.

5 – Get a Business Bank Account

Using just one bank account for both business and private turns messy very quickly. So get a free business bank account – for example with NAB.

6 – Register for GST on time

Register for GST when your forecasted turnover exceeds $75,000. The good news is that you get to claim the GST you pay.

7 – Treat Employees as Employees

Treat your employees as employees. It is tempting to treat them as contractors, but not worth the penalties and headaches.

8 – Pay SG and Wages On Time

The ATO is really tough around your employees’ super. So pay their super and wages first when cash flow is tight.

9 – Get Workers Insurance

Easy to miss but make sure your employees are ensured while working for you. So get the right policy from icare – might save you tons later.

10 – Lodge And Defer

Lodge your tax returns on time, even if your cash flow is tight. And then let’s talk to the ATO about a payment plan and remission of interest.

11 – Safeguard Your Losses

Your business’ tax losses might safe you tax later on, but are also easily lost. Please call me before you change your business structure.

12 – Weigh Up ATO v Bank

The ATO charges higher interest rates than banks. But is also more likely to forgive this interest for the right reasons. So let’s talk this through.

13 – Mind the PSI Rules

If your business depends on your personal skills and efforts, let’s discuss the personal services income (PSI) rules to avoid any potholes.

14 – Claim Car and Travel Expenses

When you use a car or travel for business or work, make sure you claim what is yours. Easy to leave money on the table with this one.

15 – Get and Keep What is Yours

There are many ways to save tax and make you better off. From discounts and conscessions over deductions and write offs to grants and structures. Make sure you get and keep what is yours.

This is just a short overview. Please call me to talk this through.

 

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Disclaimer: numba does not provide specific financial, legal or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax or legal advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.