It’s important for businesses to be aware of some common trip-wires that could entangle them on the wrong side of ATO compliance.
As actions become wayward habits due to the pandemic, and subsequent lockdowns and changes to working behaviour become the norm, there are some things to be mindful of now that we have emerged from the other side.
The first concern that business owners should be aware of is confusing their private expenses with work ones.
Some lines have been blurred between home and work expenses as business owners conduct more working activity at home. But Assistant Commissioner Andrew Watson says business owners should be careful because the ATO is focusing on ensuring that such business claims are carefully reviewed.
“Just make sure that apportionment is happening and you’re not just claiming business expenses that include an element of private expense,” said Mr Watson.
The second area in which the ATO will be closely scrutinising is whether or not business owners are omitting income from their returns.
As businesses have become more flexible and open to sharing their services across a multitude of platforms in order to generate more revenue, owners need to be vigilant in reporting all of these sources of income.
Side hustles and other income earning possibilities all need to be included in order to remain compliant.
And finally, good record keeping is something that the ATO’s random audit program has identified as a strong correlator to compliant businesses.
Complete records are crucial to maintaining a good relationship with the ATO and we here at Accounting Tax Solutions can help you to get this right.
Understanding what you need to record and how best to do it can make things at tax time a whole lot easier. There are a lot of digital applications available to make recording the right things at the right time a breeze and we can point you in the right direction for the ones that best suit your business and style of operation.
By being vigilant regarding record keeping, you can help yourself in understanding whether you are correctly declaring all business income from all potential sources and that you are able to identify whether or not an expense is a personal one, especially if you’re still working from home and the lines are blurred.
If you would like professional support from an experienced team, then do reach out to us here at Accounting Tax Solutions. Email us at info@accountingtaxsolutions.com.au or call us on 07 5559 1200