The tax office are continually warning small businesses of their sophisticated data matching and analysis tools which are pointing out all dodgy lodgements.
When business activity statements do not accurately reflect tax lodgements, the ATO can now easily recognise the discrepancies. It is these businesses which will receive heavy scrutiny from the tax office and be further examined.
The 2019 crackdown is due to an estimated $10 billion tax gap in the Australian small business sector.
Recently, the ATO published an updated version of their small business benchmarks, which are a guide to compare one businesses performance against similar businesses in the industry. If businesses are found to be outside of their benchmarks, they are likely to receive an audit of some form from the tax office.
When completing your tax return as a small business, it is important that you refer to the benchmark tools provided by the ATO to determine whether your claims are similar to that of the businesses around you.
However, it must be noted that not going outside of your benchmarks is not necessarily a crime. As long as your claims are legitimate, you have no reason to reduce your claiming amounts.
A qualified and knowledgeable tax accountant will be able to assist you with your lodgements, balancing the need for a large return and the need to be truthful and sincere.
As part of their mission to combat incorrect claims, ATO representatives have also visited almost 500 businesses North of Sydney. The visits are to ensure that small businesses are meeting all of their legal requirements, such as record keeping and payment facilities, outstanding lodgements, tax debts and employee entitlements.
Undeniably, it is more important than ever to make legal and accurate claims on your small business tax lodgements.
As small business tax champions, we understand how to get the greatest return without raising a red flag for the ATO. If you would like to get in touch with one of our accountants, contact us today via our online form.