What makes the ATO audit your small business

Posted on Apr 14, 2013 | 0 comments

Small business audits is definitely less common than those of individual and larger corporations but since studies have indicated a rise on audit rates and the fact that small business has become one of the largest source of untapped tax collection, small business are now more likely to be under audits. In line with that, keeping your records clean and taking extra precautions of avoiding potential triggers to help avoid getting your business included in the ATO audit list.

Too much play

Every business should always take care of the emotional wellbeing of their employees but too much of these entertainment expenses can pose a potential ATO audit. Also be aware that the unnecessary expenses that your business make such as the luxurious furnishings and outrageous cars you might have likened into buying will definitely cause the ATO to wonder. Keep them at bay by being realistic with everything that you do with your business, keeping accurate records of your book and to make sure that entertainment expenses is kept to a minimum.

Independent contractors?

You may have a different opinion when it comes to your employees but no matter what you think about your employees (or contractors) it is important that you file payroll tax returns and pay all of their taxes on time. They will also be curious when you suddenly changed your employees into independent contractors.

If you can’t be bothered to do this on your own, then hire a payroll service provider to keep you from spending your precious time on this.

Cash transactions

Business that operate on a cash basis – such as convenience stores – are on a greater potential of being audited. This is due to the fact that the nature of the business provides more venues for fraud to occur. ATO will take extra care in looking into your claims because of this.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>