For small and medium-sized enterprises (SMEs) in Australia, staying on top of your tax obligations is essential. The Australian Taxation Office (ATO) is stepping up its efforts to ensure Australian businesses are meeting their tax obligations, targeting those suspected of not fully meeting their tax duties.
September 20, 2024
For small and medium-sized enterprises (SMEs) in Australia, staying on top of your tax obligations is essential. The Australian Taxation Office (ATO) is stepping up its efforts to ensure Australian businesses are meeting their tax obligations, targeting those suspected of not fully meeting their tax duties.
The ATO is increasing its scrutiny of SMEs to ensure compliance with tax requirements. This initiative is aimed at businesses that may not be accurately reporting their income or that may be claiming an excessive number of deductions
If your business is selected for an audit, the ATO will look closely at your financial records and may visit your business or check other sources to verify your claims. If they find inaccuracies, your business could face financial penalties and may have ripple effects on company reputation.
Here are the four areas the ATO has highlighted for SMEs to be mindful of to ensure compliance and accuracy:
The ATO can impose significant fines, including the payment of owed taxes and additional penalties based on the severity and duration of non-compliance. It’s more cost-effective to adhere to the rules and maintain proper tax practices.
In some cases, penalties can be reduced if you voluntarily disclose an error or if there are mitigating circumstances. Safe harbour provisions may protect you from penalties if the error was due to your tax agent’s mistake, provided you gave them accurate information. If you face a penalty, you may also have the option to request a remission or object to the penalty if you believe it’s unjust or unfair.
To keep your business in the clear:
Being proactive and addressing issues early with the ATO may also prevent minor discrepancies from becoming major headaches.
With the ATO tightening compliance, understanding these changes and your obligations is more important than ever.
Use these insights to help ensure you’re not only compliant but also prepared for any scrutiny and, if you’re unsure about where to start, it’s always wise to chat with a financial advisor who may be able to provide personalised guidance.
This information is for general information purposes only. The information contained herein does not constitute financial or professional advice or a recommendation. It has not been prepared with reference to your financial circumstances or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice as to whether or not this information is appropriate for you.
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