Blog Layout

How to avoid unwanted attention from the ATO

Editorial Team • Nov 05, 2017
man with telescope symbolising unwanted attention

It’s crucial to lodge an accurate tax return to avoid unwanted attention by the Australian Taxation Office (ATO).

Businesses and individuals who do a poor job at record keeping will undoubtedly find themselves in hot water with the ATO.

Here are some common mistakes to avoid unwanted scrutiny, and ensure you’re in line with the ATO’s compliance program.

Poor record keeping

First and foremost, it’s imperative that you keep accurate records. Inaccuracy is one of the most common tax return mistakes and can spark the ATO’s interest.

Good organisation can not only help legally maximise your tax return, but it can help you better understand your businesses financial progress.

Economic variations

The ATO has made it known that it compares the performance of businesses to their industry peers. If your business is inconsistent, or there is a large fluctuation year-on-year, then you might find your company’s records being scrutinised from top to bottom.

You also need to make sure you reconcile the information on your company tax return with your business activity statement. Any sizeable variations will no doubt catch the eye of the ATO.

Living large

It’s no secret that the ATO targets businesses who have bought big-ticket items like boats, antiques and luxury cars. So if you’ve splashed the cash, then you can expect the ATO to check your returns to see if you can actually afford the item/s.

Unusual transactions

Large, one-off or unusual transactions, including transfer or shifting of wealth could put you on the ATO’s radar. Failure to disclose items on a tax return could also spell disaster too. For example, if you receive cash and and fail to declare it then your expenses will look high and the ATO use red flag indicators such as unusually high expenses to target businesses for further inspection.

International transactions

This is a big red flag and will almost always result in an audit. The ATO are constantly on the lookout for businesses making international transactions, especially within tax havens.

Late lodgements

Consistently lodging late returns could trigger an audit as the ATO will view this as poor compliance.

 

With the right financial advice, your tax return is a breeze. At BDH Leaders, we advise you on how to maximise your tax return and keep you on the right side of the ATO. View more information on our tax services here.

At BDH Leaders, we advise you on the best growth strategy for your business to get where you want to go.  View more information on our business services

ATO take “Gloves off” on overseas income

By Editorial Team • 06 Sep, 2019
How you are taxed and what you are taxed on depends on your residency status for tax purposes. As tax residency can be different to your general residency status it’s important to seek clarification. The residency tests don’t necessarily work on ‘common sense.’ For tax purposes: Australian resident – taxed on worldwide income including money earned overseas (such as employment […] The post ATO take “Gloves off” on overseas income appeared first on BDH Leaders.

Tax Time: Are you in the ATO’s sights?

By Editorial Team • 16 Jun, 2019
What’s new Live reporting through Single touch payroll Single touch payroll (STP) reporting has changed the way businesses report salary and wages, PAYG withholding and superannuation contribution information to the ATO. For the 2018-19 financial year, only businesses with 20 or more employees were required to use STP. From 1 July 2019, all businesses will need to use STP although […] The post Tax Time: Are you in the ATO’s sights? appeared first on BDH Leaders.

What you can expect after the Election

By Editorial Team • 03 May, 2019
Budget 2019-20: The pre-election announcements that are now law The Federal Budget announced a series of measures, some of which were legislated before the election was called. Extension and increase to the instant asset write-off The popular instant asset write-off for small business has been extended and increased. The new laws: increase the threshold below which small business entities can […] The post What you can expect after the Election appeared first on BDH Leaders.

Borrowing in the post Banking Royal Commission era

By Editorial Team • 17 Dec, 2018
The fallout from the Banking Royal Commission is reverberating across the economy. Banks are simplifying their business models, cutting costs and tightening their lending practices. Boards are streamlining their product offerings in the wake of some pretty astounding findings by the Commission. The impact of the Banking Royal Commission is not only being felt by banks. The property markets continue […] The post Borrowing in the post Banking Royal Commission era appeared first on BDH Leaders.

Is a Limited Recourse Borrowing Arrangement right for my SMSF?

By Editorial Team • 17 Dec, 2018
We borrow all the time to acquire assets; you may borrow to purchase a home or investment property which usually involves a mortgage, you may borrow from a finance company for a car which uses the car as collateral, you may take out a margin loan to purchase equities. These are just some examples but there is another: Limited Recourse […] The post Is a Limited Recourse Borrowing Arrangement right for my SMSF? appeared first on BDH Leaders.

Building wealth with stocks, bonds and funds

By Editorial Team • 21 Aug, 2018
Investing in revenue-producing assets can be confusing. There is a lot of financial jargon to wade through and it’s often not easy to decide which asset best suits your needs and financial goals. In this article we will simplify stocks, bonds and funds. Stocks Stock (equity) is when you purchase shares in a company. The price of a share, purchased […] The post Building wealth with stocks, bonds and funds appeared first on BDH Leaders.

The rise and rise of investing ethically

By Editorial Team • 21 Aug, 2018
Making an investment decision is not always based on the possible return you may receive from that investment. An increasing number of people are basing their choice of fund, or company, on issues around social responsibility, sustainability and corporate governance. In Australia, ethical investing started in earnest in 1986 with the launch of Australian Ethical, followed in 1994 by Hunter […] The post The rise and rise of investing ethically appeared first on BDH Leaders.

Let me be Frank

By Editorial Team • 21 Aug, 2018
What is a Franking Credit? You have probably seen this phrase on tax statements provided to you by a company you invest in but what does it actually mean? Franking Credits are the means whereby Australian companies can give credit for tax paid at the company level to their shareholders, which can then be used by the shareholder to avoid […] The post Let me be Frank appeared first on BDH Leaders.

IPOs vs ICOs – what’s right for you?

By Editorial Team • 21 Aug, 2018
There are significant differences between an initial public offering (IPO) and an initial coin offering (ICO) and before you invest in either option, it is important to understand those differences and the risks associated with each. What is an IPO An IPO is the first sale of a company’s stock issued to the public via a stock exchange, usually to […] The post IPOs vs ICOs – what’s right for you? appeared first on BDH Leaders.

Is your business about to have a growth spurt (and are you ready)?

By Editorial Team • 21 Aug, 2018
Besides the launch phase, growth spurts are the second riskiest time for many businesses. An unexpectedly successful marketing campaign, a sudden change in consumer needs, a ‘hot’ market for a particular type of product or service – any of these things can cause challenges for your business. The question is – will your business cope?   Consider the following points […] The post Is your business about to have a growth spurt (and are you ready)? appeared first on BDH Leaders.
More Posts
Share by: