Businesses that are unorganised, or make mistakes in their tax return, can lose out on significant tax savings, as well as find themselves liable for penalties.
Below are some common mistakes that small businesses often make at year-end:
A job that is often forgotten by employers is superannuation contributions. Super is payable 28 days after the end of the quarter.
However, it is important to remember, that to claim a deduction for the super contribution the employer must have made the contribution before June 30. Not paying super by the due date will also lead to a penalty imposed by the ATO.
Lodging group certificates
A common mistake made by business owners is issuing group certificates late and incorrectly reporting the figures. Employers are required to issue their payment summaries to their employees by July 14 and to the ATO by August 14.
Small business benchmarks are financial ratios that have been developed by the ATO to help compare the performance of similar businesses in an industry. Benchmarks allow the ATO to identify businesses that may be avoiding their tax obligations.
Businesses should take a look at their financials and review their management accounts before June 30. They should be focusing on any unusual large amounts that have been reported as this could be an indicator of an accounting error, or a more serious problem.
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