Businesses are required to complete Activity Statements to report on different taxes. The taxes a Business is required to report to the ATO depend on the Business' Tax Registration, Industry Type and Yearly Turnover. The Yearly Turnover also determines how some of the taxes included in the Activity Statement should be reported and how often. 

Reporting Periods

Most Small and Medium Businesses are required to lodge Activity Statements quarterly. Some of these Businesses may need to report their Pay as You Go Withholding on a monthly basis. Larger Businesses are normally required to report both GST and Pay as You Go Withholding monthly. Finally, small Businesses whose turnover is under $75,000, may report Annually. 

Reporting Method

The ATO will also establish the reporting method. This can be Cash or Accruals. On Cash Basis, the Business reports for GST and Pay As you Go Instalment, based exclusively on the paid transactions recorded over the reporting period. On Accrual Basis instead, the Business reports for GST and Pay As you Go Instalment based on all transactions recorded in the reporting period, regardless of the payment status. 

Setting up your BAS Requirements in Xero

BAS Requirements are displayed on Online Services for Business or the printed copy of the Activity Statement. The reporting requirements then need to be set up in Xero.

Activity Statement Report

Your tax liabilities payable in the Activity Statements are calculated in Xero using the Activity Statement report. Xero has two versions of this report: a Manual version and an Electronic version. Although the Electronic version of the report allows users to lodge the Activity Statement directly to the ATO, our current recommendation is to use the Manual version. At this stage, the Electronic version of the report is not linked to the GST Reconciliation Report. Also when a BAS is finalised, the finalised version of the report does not appear in the Published Reports section in Xero. Two missing features that can significantly impact the process of calculating and reconciling the Business Activity Statement.

When you start a new Xero Organisation, the default Activity Statement report is the Electronic version. Therefore, you will need to change the report settings to the manual version. 

Set up the Activity Statement Report (Manual Version)

New Xero Organisation

1. Go to Accounting > Reports
2. Select the Report: Activity Statement
   
   è  The Business Activity Statement Settings screen opens
   
   
   
   
3. Click on Go to previous BAS experience
   
   è  A confirmation message is displayed 
   
   
   
   
4. Click on [Proceed]
   
   è  The Manual Activity Statement report is enabled and Xero's Financial Settings screen opens

Existing Xero Organisation that has previously used the Electronic Report connected to the ATO

1. Go to Accounting > Reports
2. Select the Report: Activity Statement
   
   è  The Activity Statement Electronic Report opens
   
   
   
   
3. Click on [Settings]
   
   è  The Business Activity Statement Settings screen opens
   
   
   
4. Scroll to the bottom of the screen and click on Switch to manual Activity Statements
   
   è  The Business Activity Statement Report opens
   
   
   
   
5. Click on [Settings] again
   
   è  The Business Activity Statement Settings screen opens
   
   
   
   
6. Click on Go to previous BAS experience
   
   è  A confirmation message is displayed
   
   
   
   
7. Click on [Proceed]
   
   è  The Manual Activity Statement report is enabled and Xero's Financial Settings screen opens

Set up the Business Activity Reporting Settings in Xero

1. In Xero go to Accounting > Advanced
   
   è  The Advanced Accounting settings screen opens
   
   
   
   
2. Click on [Financial settings]
   
   è  The Financial Settings screen opens
   
   
   
   
3. Modify your Activity Statement settings and click on [Save]