How to safeguard your business against future audits

StuartBusiness Audit

Last year the ATO scrutinised over 760,000 business operations, resulting in, close to, an extra billion tax dollars for the Australian Government.

While an audit can be a good learning experience for business owners, it can also be a time-consuming lesson. The investigation can take months, or even years, and requires a lot of time and energy regardless if you have done anything wrong.

Eliminating the audit threat

Undeclared income

A taxpayer can fail to declare income in a number of situations and in our experience, sometimes without even knowing it. If the ATO concludes that a taxpayer has undeclared income, the taxpayer is generally liable for tax on the undeclared income plus interest charges and penalties.

Unexplained wealth

Last year, the ATO announced it would be using social media platforms like Facebook to monitor for displays of wealth from individuals that did not match up with what they had reported about their income and affairs.

Private expenses

The ATO has also warned of vigilance around both travel claims and phone and internet deductions from business owners, reminding taxpayers they cannot claim 100% of a phone plan as a business expense if they also use that device for personal purposes.

Unpaid superannuation

Employers who either knowingly or unwittingly hold back superannuation face heavy penalties. If you don’t pay the minimum amount of super guarantee (SG) for your employee into the correct fund by the due date – you may have to pay the super guarantee charge (SGC).

Unusual refunds

While more than 98% of refund claims are processed without any problem, the ATO will select a small proportion of refunds to check the accuracy of the information provided. Refund claims are made against information in the systems and they may contact other parties such as banks, employers, customers and suppliers.

Shield yourself

Taking out audit insurance eases can ease the pain. We’ve partnered with Audit Shield to negate the financial impact of being audited. Our Audit Shield Service provides for the payment of professional fees incurred as a result of your being selected for an audit, review or investigation by the ATO or other government body. It’s a fixed, cost effective solution to guard against these un-budgeted costs giving you peace of mind at the time you need it most.

 

In danger of being audited or recently received an audit notification? We can help. Let’s talk.

Love the blog? Subscribe to receive it fortnightly.

What do you think?

We would love to hear your thoughts! Feel free to submit your comments below or comment on our Facebook Page or Twitter.