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Here are some tips to minimise your risk of an audit and on how to navigate the process if you get audited. With the updates in identifying high risk taxpayers, the ATO’s audit is expected to increase. The ATO has used advanced technology and collaboration among organisations to improve their audit and reviews and identify incorrect tax lodgements.

This may sound like bad news but it would be good news for those considered as low risk. Taxpayers have the ability to manage their tax affairs and minimise their audit risk. What are you going to do about it?

Tax audit

First, use an accountant that fits your business. Finding the right accountant with the knowledge and expertise that you need sounds obvious but not everyone does this when in fact it is the first step in being prepared for an audit. There are many accountants out there, each with specific skills and experience. Being prepared for an audit requires extra skills, knowledge and ability to complete processes. Tax legislation is very complicated so make sure your accountant can take on audit preparation for you.

To avoid the ATO’s radar, avoid falling behind on payments and lodgments. Many lodgments include annual tax returns, Single Touch Payroll, and activity statements. If you regularly follow through your tax obligations, the ATO would think you understand your tax requirements and lower your risk profile. If you have a history of missed payments or late lodgment may show ATO that your accounting systems are questionable.

Review your big financial transactions and seek the right advice to avoid a red flag. It’s important to have the financial records especially when starting a new business, restructuring an existing one, consolidating businesses, buying or selling property or business, undertaking new investments, contributions to SMSF using non-cash assets, receiving business funding, accessing CGT concessions and claiming government tax incentives, particularly the R&D tax incentive.

Business process

The ATO investigates a business’ processes and controls to see how accurate the data is. Make sure these are up to date. As taxation law is not always very clear, you may want to go to the ATO and ask for a private ruling. It may take a long process and require support from your lawyer and accountant but you want to make sure the ATO agrees with your application on tax law.

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As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.

Sky Accountants Ballarat

Phone: 1300 328 855

Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Sky Accountants Gisborne & Macedon Ranges

Phone: 03 97444522

Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437