Accountants Sydney CBD
The Times When Accountants Sydney CBD Can Help Save Your Business – Accountant Sydney
Often, business owners feel like they can get by without the added expense of hiring an accountant for ongoing services. However, there are times, particularly times of change and struggle, when Accountants Sydney CBD, or wherever it is that your business is located, can step in and actually help you save your company.
Business Startup and Asset Protection Strategy
If you feel that your business would fare better if you changed its structure from, say, that of a sole trader, to one of a partnership, an accountant will help you with understanding all of the necessary paperwork requirements, and will aid in organizing all of the necessary documentation required. That way, no steps will be missed and you will have a clear understanding of all of the tax and financial ramifications associated with the change.
Information System and Record Keeping
Are you using a billing software program or service that has you in over your head, and you need to straighten it out before it’s too late? Each of our Accountant Sydney CBD are well versed in untangling the complexities of billing cycles and issues. Whether it’s just a question of understanding how it works, or needing to investigate potential fraud, accountants can pour over all of your data and documents, and help you figure it out. They can have you be back on solid footing with your business in no time.
Tax compliance and liaising with ATO
The study shows that in Australia there are approximately 2.7 million micrso businesses. These 2.7 million micro businesses account for almost two-third of the tax debt the country has at any point of time. That’s why tax compliance in micro business sector is an important issue. It is very evident from the study is a tax debt from micro business sector alone amounts a huge money. Not surprisingly, the Australian Taxation Office has made a specific mention to the micro business sector in its tax compliance program. The study used a web based survey to generate the results. The study was conducted in 2010 to collect reports. The reports were taken from a database of all micro businesses across all territories and states that were advertised on the Internet. The results were shocking; it showed that the average cost of complying all taxes was almost $28000. It reported a significant rise in both real dollars and relative terms. To explain some parts of increasing in the compliance cost, the Gods and Services Tax was the most time consuming of all taxes. An important reason for storing accounts records was to comply with tax obligations. The records from these accounting records were also used in internal management and reporting purposes. A large percentage of the respondents to that survey believed in keeping tax records in computerized accounting system, as it produces better quality information. They also believed that keeping computerized records has some sorts of benefit to their business because of the high quality of information stored. The respondents of that study also seemed to be completely unaware of the eligibility criteria for various concessions under small business tax concessions.
Avoid the ATO Audit
If you are thinking that your business is too small and unimportant to warrant attraction, you should stay informed that the Australian Taxation Office visited almost 15600 small businesses during 2009 – 2010 taxation year. The Australian Taxation Office sent lodgements to 613000 small businesses, and letters followed up the process from the Australian Taxation Authority. And 62000 small businesses got phone calls from the Australian Taxation Office to confirm that they are aware of their tax compliance obligations. Besides all these visits, letters and phone calls, the Australian Taxation Office also conducted audits and reviews of thousands of small business. The audit and review raised almost $100 million in the ground of income tax alone.
The Australian Taxation Office has started a good initiative towards tax compliance in small businesses. At first they send out letters to the businesses. In the letter, the Australian Taxation Authority addresses the businesses to make volunteer disclosures in tax return. If the businesses do the volunteer disclosure timely they get reduced penalties.
A recent survey has shown that most of the micro business organizations tend to show their income reduced than normal. They do this to pay lower amount tax than they should normally pay. The Australian Taxation Authority has kept reporting of lower income in its top priority for micro businesses. Micro Business Organizations have evolved some tricks to report a lower amount of income. They do it mainly by cash-in-hand transactions, as they maintain no official records of these cash-in-hand transactions. The Australian Taxation is all set to adopt some new measures to stop these reporting of lower income reporting cases. The measures to be taken by the Australian Taxation Office in the tax compliance program will include data matching and benchmarking to detect the reporting of lower income reporting cases.
Small Business Benchmark
Small business benchmarks are the financial ratios developed by the Australian Taxation Office to make a better comparison of performance of small businesses in a particular industry. Small business benchmarks represent the return and activity statements of the industry, and it also gives some guidance on the expected figures of a business of that particular industry. It gives the Australian Taxation Office a clue of approximate reporting of income, when the income reported is below that expected value; the Australian Taxation Office takes special measures to check the business’ details of income.
The Australian Taxation Office use benchmark to find out businesses that might avoid their tax liabilities by reporting an income lower than their normal income. The Australian Taxation Office considers the benchmark to be the most accurate tool to predict the turnover of the business in a particular industry. They also highlight the benchmark of each industry to help small businesses and tax practitioners. The Australian Taxation Office publishes benchmarks for businesses belonging to more than 100 industries. They also keep the benchmarks ranged within a different turnovers range. The benchmarks are also published in different ranges, to allow small businesses understand the variation in the same industry at different locations belonging to different circumstances. By publishing the benchmarks, the Australian Taxation Office makes it clear that they expect a small business organizations to report the right income, not to under report it.
Out of the benchmark reports
Small businesses, whose income reporting is outside the benchmark published the Australian Taxation Office can attract the attention of the Australian Taxation Office easily. But, there are chances that some reasons might be there behind the difference in the report. The reason may be – higher production cost and lower selling price; it may also indicate that the business is not reporting proper amount of income and furnishing all the details of its transactions. While reporting outside the benchmark, a small business should always look the genuineness of its report
Business Activity Statement (BAS)
The Australian Taxation Office has granted more funds to refund the pursuant to business activity statements. They also expect to recheck more than 48000 business activity statements filed by small business organizations for refund.
Losing the Tax
Micro business sector now faces a huge loss and the Australian Taxation Office is also looking after this issue. As per the compliance plan – the small businesses facing tax loss – will get contact from the Australian Taxation Office. Though it is not clearly mentioned, but it the Australian Taxation Office will be considering the issue of tax loss of micro businesses with great importance.