Posted on 14 December '18 by , under Tax.
Unwanted attention and penalties from the ATO can jeopardise your small business.
Protect your business by avoiding these common small business tax errors.
Not using an accountant
Tax laws frequently change, and compliance requirements can be time-consuming and demanding. A registered tax agent will streamline your financial processes, provide advice on maximising your finances and keep you compliant.
Inaccurate tax returns
Small businesses that do not declare their income and deductions accurately will attract the ATO’s attention and financial penalties. All foreign income, capital gains tax, business sales and bank interest must be declared. You must also have legitimate evidence supporting your tax deduction claims.
Poor record keeping
Businesses that fail to keep accurate records will struggle to remain compliant. It is vital to keep:
- Cash, online, EFTPOS, bank statements, credit and debit card transactions
- Records showing when you use business purchases for private purposes to provide evidence for tax deduction claims
Incorrect superannuation payments
The ATO will sanction employers that fail to pay their employees’ superannuation correctly and on time. Make your mandatory quarterly payments are paid at the correct rate of 9.5 per cent of your employee’s pay. The cash-flow benefits of delaying super payments and missing deadlines are not worth the financial and criminal punishments incurred by frequent breaches.