Do not say we didn’t tell you about this.
The Australian Taxation Office (ATO) is closing in fast on everybody who doesn’t properly state their income and pay the right amount of tax.
We at Invigor8, as your Tax Accountants, want to help you be aware of what the Australian Taxation Office (ATO) is doing and how you can secure yourself.
The ATO knows..
The ATO is connecting databases of property sales, car purchases, international plane flights, dividends paid from shares, and sales of shares, cryptocurrency transactions, and investments with the income declared on your Tax Return.
If your tax return income does not match their records, then the ATO will probably “red flag” you for a tax audit.
These databases have not been linked to this level like this, therefore, we are expecting to see a huge rise in the number of tax audits over the next 12 months.
Undeclared Business Cash Receipts
Many small business leaders take some of their cash incomes each week and don’t declare this in their tax returns.
The ATO can catch this out now with their new tools.
When your business tax return is lodged, the ATO matches your profit and other key indicators as a % of your total sales with other businesses in your industry and/or geographical area. If the % of your earnings is lower than the average, then the ATO may decide to do a tax audit just to see if you are properly declaring all the income you receive, or if the spending you have claimed are actually allowable as tax deductions.
In addition to that, undeclared cash income from your business could lead you in getting a much lesser price for the sale of your business.
We are here to help you!
2 keys roles as your tax accountants.
- Make sure you pay the least amount of tax you legally should.
- Assist you to lodge a precise tax return, therefore if you are audited by the ATO you’ll have peace of mind knowing that you have done things right.
While none of us like paying tax – at the end of the day, taxes need to be paid to keep society operating. This does not mean you can’t look to minimise or defer where possible.
The ATO has quite large penalties they can apply where they feel you have been reckless or aware of non-disclosed income or overstated expenses or non-tax deductible items. Remember that we do not audit financial statements, but review key areas to ensure compliance and protect you from falling foul of an audit. So please communicate transactions you are unsure of.
Invigor8 is on your side. Talk to us now!
Let’s discuss anything you feel might be questionable.
For those of you that would like to protect yourself, your business or your super fund, we do offer insurance cover for all different types of audits. We have attached a brochure about the types of audits covered. The main benefit of having the tax deductible insurance, is that in the event of an audit, the insurance cover pays us up to a dollar limit for time dedicated to defending you in an audit.
It is important to understand that even if we have prepared work correctly in line with the tax legislation, there is still substantial time required to liaise with the ATO and provide all the supporting documentation required by them (including discussions and meetings) to satisfy their sign off on an audit.