Business owners would do well to ensure they do the right thing over the next three months to avoid being caught out by the ATO.
The next three months will see the ATO targeting small businesses who fail to comply with their tax obligations. Even business owners who are compliant with their obligations may be subject to intense scrutiny. Therefore, all owners should prepare for tax office inquiries.
Businesses that accept cash as a common form of payment are often subject to high scrutiny. The risk of audit is even higher for those businesses that include information on their tax returns that falls outside industry benchmark ranges. To avoid a visit from the ATO, owners should first check their figures against those benchmarks before lodging a return.
Business Activity Statements (BAS) with unusually large refunds can also result in an inquiry from the ATO. Owners should retain valid tax invoices for all purchases before lodging their BAS. Those who are registered for GST on a cash basis should also check that payments are made during the BAS period.
For business owners that may have done the wrong thing, the earlier you make a disclosure, the better. Declaring mistakes or wrongdoings before the tax office finds them can completely remove penalties or have them significantly reduced.
For more information on best practise for small businesses, please contact us at Leenane Templeton on 02 4926 2300