Tax accountant services in Brisbane are there for you should you get audited. But how does the ATO decide who to audit? Read on to learn more.
If you find yourself or your business slapped with an audit you will probably be in dire need of tax accountant services. Every Brisbane business and individual is susceptible to being audited but there are ways to avoid being targeted by the ATO.
To be audited means an outside organisation such as the ATO will come in and review all your accounting ‘books’. They will be looking for detailed evidence of income and expenses. Often an audit will take place because the ATO suspects you are doing something wrong.
As shared by the ATO: “Our audit program ranges from relatively quick examinations of source documents to more intensive analysis of complex arrangements and transactions. Whatever the issue, we will be transparent about our concerns.”
The ATO provides much more detailed information on the website that is well worth perusing for.
If you have everything organised and above board, an audit should not have any negative outcomes but it will still be stressful and time-consuming. If you haven’t been above board, you may find yourself and your business in hot water.
How to avoid an audit: Do the right thing
If you want to avoid being audited, any tax accountant service in Brisbane or elsewhere will tell you the first thing to do is avoiding trying to cheat the system.
These days, the ATO has automated checks and balances. Anything which registers as out of balance increases your chances of being audited exponentially.
Things like claiming excessive laundry expenses or and declaring an income that is tens of thousands of dollars below the average for your industry fall into this category. These figures will set alarms off at the ATO and have the auditors heading to your door.
As it happens, avoiding an audit isn’t even the only reason you should be honest in declaring your income. If you want income protection (and these days you really do) your insurer will cater your policy to your tax declaration. This means you won’t be able to insure for what your company is actually worth. For the sake of trying to play the system, you may find yourself considerably out of pocket if the dark times come.
The same hens will come home to roost if you need to apply for a loan. The lender will value your company and assets by your tax declaration. This is shooting yourself in the foot when you need a loan and have to borrow far less than you should be able to.
The bottom line
At the end of the day, you may be audited no matter what you do but it is far more likely the auditor will knock on your door if you have glaring discrepancies.
Even the most honest business owner can make mistakes and find themselves in hot water. The best way to avoid this altogether is to use top-notch tax accountant services. Your accountant will make sure your tax return is accurate and lodged in a way that doesn’t raise alarm bells at the ATO. This includes not exceeding the limits of what you can declare as expenses and ensuring the income you declare matches what your bank accounts say.
Use a good tax accountant service to keep your ducks in a row and an audit should never be a problem. If you do get audited, you may like to check out some in-depth tips at knowthelaw.com.au and make sure to get in touch with the friendly staff at Mobbs & Company to help you showcase your financial records correctly.