Whether you’ve been audited before or not, you’ll certainly want to avoid the red flags that could trigger the ATO to order an audit. Here are some of the things you need to watch out for.
Ensure the disclosures on your tax return are correct because it can be verified against other information that has been lodged with the ATO. If there are discrepancies between, let’s say, your income tax return and Business Activity Statement, you’re likely to get a call from an ATO representative.
Lodge your tax returns, Business Activity Statements, and other compliance obligations on time. Otherwise, the ATO will surely notice, and this will make them look into your documents more closely.
Be careful of unreported cash transactions. With the benchmarks they have developed, the ATO can check if the performance of your business is consistent to that of the average income and expenses for your industry.
Qualifying as a small business sure has its perks — there are many capital gains tax concessions that you can take advantage of. However, make sure that your sales activity really fits with the definition of a small business. You can be taken to court if a tax officer discovers your business doesn’t actually belong to that category.
The ATO has been paying particular attention to international transactions lately. If you have completed international fund transfers or other international financial transactions, ensure you have sufficient documentation for these.
At ServiceSeeking.com.au, you’ll find a lot of competent accounting professionals who can manage these things for you.