As a barrister in Australia, managing tax obligations can be particularly challenging when you also have to manage cases. Lodging your Business Activity Statements (BAS) accurately and on time is essential to avoid penalties and ensure compliance with the Australian Taxation Office (ATO).

This guide provides critical information tailored for barristers to help you understand the BAS lodgment process, report GST accurately, and manage your Pay As You Go (PAYG) instalments.

By following this guide, you ought to be able to maintain your cash flow and meet your tax obligations on time. If you need further assistance with BAS lodgment or have questions about your specific circumstances, please contact us for professional support by using the link here.

What is a Business Activity Statement?

A Business Activity Statement (BAS) is essential for barristers to report and pay tax obligations to the Australian Taxation Office (ATO).

Your BAS allows you to report the GST collected on sales minus the GST paid on purchases, including any GST-free supplies. The net difference determines whether you owe money to the ATO or receive a refund.

The BAS also includes Pay As You Go (PAYG) withholding and instalments. For detailed information on PAYG, see our article here.

Are there benefits in registering for GST using cash basis?

Registering for GST allows you to claim GST paid on business expenses as input tax credits on your quarterly Business Activity Statement (BAS). You must lodge your BAS with the Australian Taxation Office (ATO) every quarter.

To account for GST on a cash basis you need to:

• Report GST income on your BAS only when you receive client payments, not when you issue invoices.

• Report the GST portion of your expenses only when you pay them, not when you receive invoices with future payment dates.

GST is a 10% value-added tax on most goods and services in Australia. You use your BAS to report and pay the GST your business has collected and to claim GST credits. Ensure you claim GST credits within four years from the due date of the earliest activity statement in which the credit should have been claimed.

Managing PAYG instalments for Barristers

As a barrister in Australia, understanding PAYG instalments is crucial for managing your tax obligations. PAYG instalments are regular payments towards your income tax liability, ensuring you stay on top of your tax commitments throughout the year. These payments can be based on the ATO's calculated rate or an amount derived from your latest tax return.

If your income has significantly changed, it might be more accurate to calculate instalments based on your current income using the ATO's instalment rate. This helps you maintain accurate cash flow and manage your finances effectively.

Usually, the ATO sends PAYG instalments as a notice rather than including them in a Business Activity Statement (BAS). Ensuring timely payments and keeping accurate record keeping of your expenses and income will help you stay compliant with your tax obligations and avoid any penalties.

When to submit a Business Activity Statement for Barristers

As a barrister in Australia, knowing when to submit your Business Activity Statement (BAS) is essential for meeting your tax obligations to the Australian Taxation Office (ATO). The timing depends on your business turnover.

Quarterly

For small businesses with a turnover of $20 million or less, you can choose to lodge your BAS quarterly.

The due dates for each quarter are:

• 28th October for July, August, and September

• 28th February for October, November, and December

• 28th April for January, February, and March

• 28th July for April, May, and June

Annually

You can lodge your BAS annually if your business voluntarily registered for Goods and Services Tax (GST) and has a GST turnover under $75,000.

Accurate record keeping and timely submission are crucial to ensure compliance with ATO regulations and to avoid penalties. This will also help manage your cash flow and meet your tax obligations effectively.

How to lodge BAS for Barristers

Lodging your Business Activity Statement (BAS) as a barrister in Australia can be done in three ways:

By mail

Complete the paper form and mail it to the Australian Taxation Office (ATO) using the pre-addressed envelope provided.

If you have misplaced the envelope, send your BAS to:

Australian Taxation OfficeLocked Bag 1936ALBURY NSW 1936

Electronically

Submit your BAS electronically via MyGov, which you can do if you are an individual or a sole trader. You are required to operate your business as a barrister via the sole trader entity structure. For more information about your sole trader tax obligations as a barrister, read our article here.

Through a registered agent

You can also submit your BAS through a registered tax agent or BAS agent. They can assist with ensuring all your tax obligations are met, including reporting GST, PAYG withholding, and other taxable payments. Accurate record keeping and understanding your obligations will help in complying with the ATO requirements.

Penalties for not complying with BAS obligations for Barristers

As a barrister in Australia, it's crucial to submit your Business Activity Statement (BAS) on time to avoid penalties. Failing to lodge your BAS, whether monthly or quarterly, can result in a Failure To Lodge (FTL) penalty. Frequent lateness may lead to higher fines.

You can lodge your BAS in several ways: through a registered tax agent, a BAS agent, or by using online accounting software. Sole traders can lodge their BAS via MyGov. It's essential to lodge your BAS promptly to meet your tax obligations, manage your cash flow, and ensure compliance with the Australian Taxation Office (ATO).

If you're having trouble lodging your BAS on time, you can request an extension for the lodgement date or a payment plan from the ATO before the due date. Making a voluntary early payment can also help offset future BAS liabilities. Keeping accurate records and understanding your tax obligations will help you avoid penalties and manage your business effectively.

For more information on ATO payment plans, see our detailed guide what barristers need to know about negotiating a payment plan with the ATO.

Next Steps

If your business is currently not registered for GST and you think it should be. If you're having trouble with calculating GST and issuing tax invoices, please reach out to us.

About Causbrooks

At Causbrooks, we’re dedicated to helping legal professionals with their taxation and accounting needs. If you’d like to discuss your own situation, please complete the form below.

We have been working with legal professionals for going on three decades and during that time we have helped many barristers in the early stages of their careers by establishing a strong foundation of tax compliance, bookkeeping, cashflow budgeting, and tax planning.

Disclaimer

Any advice contained in this document is general advice only and does not take into consideration the reader’s personal circumstances. Any reference to the reader’s actual circumstances is coincidental. To avoid making a decision not appropriate to you, the content should not be relied upon or act as a substitute for receiving financial advice suitable to your circumstances.