Income tax vs. BAS – What you need to know.

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Posted June 19, 2017

Tax time is well and truly upon us, and if you haven’t booked an appointment to visit your tax agent yet, pick up the phone and give them a call. It’s time to get organised for the end of financial year and HABA understands that tax can be a real cause of confusion for salon owners. So, we have broken down the two taxes that most salon owners will be paying – your income tax and your either monthly or annual BAS payment – and what you need to know to get it right.

Filing an income tax return.

You’ll need to provide a range of financial information for your accountant to review, as well as highlight any large or unique transactions – this could include anything from a new work car to website or new chairs for your business. It’s important to keep records of all these transactions, big and small, as they all add up at tax time.

The information you accountant will need includes a profit and loss statement for the financial year, a bank reconciliation report, balance sheet and trial balance, general ledger report and a few other bits and pieces. This is where your year of records keeping comes in handy, allowing you to quickly grab receipts and invoices to hand over to your tax agent. By working with a registered tax agent, they can help you claim the most deductions possible and ensure that you pay absolutely no more tax than you absolutely have to. Book an appointment with your tax agent now so that you can get everything together in time for the end of financial year.

Business Activity Statement (BAS).

The end of June will require you to complete your quarterly or annual BAS, so long as you’re registered for GST. Getting all your receipts together should be pretty easy if you are doing your BAS monthly, as they will all be quite new. If you are doing your BAS annually, this is where keeping strong records throughout the year comes in real handy. Make sure that physical or digital copies of all your invoices and receipts are given to your tax agent now.

There are a number of changes and concessions for BAS and Tax in general for small businesses, so it’s important to seek advice from your tax agent when lodging your BAS.

Tax time is the time of the year where you get to take advantage of all the money that goes out of your pocket as a small business owner. As a service provided to salons, HABA Payroll is completely tax deductible and this can be another great way you can save time and money with HABA Payroll.

As well as a host of other reasons that HABA Membership is amazing value, it’s good to know that your HABA Membership is also completely tax deductible. But don’t wait until the end of the financial year to take advantage of your HABA Membership! Get advice on your rights, how to manage your staff and the feeling of safety and security knowing that you are getting absolutely correct and up-to-date advice on the hair and beauty industry from the leading association in Australia. If you’re not a member of HABA, why not? Join here.