Are you helping the ATO to make a bigger profit?
Seriously consider the following questions:
Have you contributed to the additional tax and penalties collected by the ATO?
Are you likely to?
Is your reporting to the ATO accurate?
Obviously, given the collections by the ATO as a result of their active compliance (the good old ‘audit’), there is a lot of incorrect reporting.
The ATO annual report for 2004/2005 reported that as a result of audit activity micro businesses were assessed an additional $1.4 billion in taxes plus $254 million in penalties and interest. Of this, GST contributed additional tax of $506 million plus $62 million in penalties!
How would your business cashflow cope with an unexpected bill for additional tax and interest?
I am sure that the ATO will be quite happy for the status quo to remain! That way the government can continue to report massive surpluses without being accused of overtaxing!
Being a small business owner you probably have enough challenges. You don’t need to innocently add to your tax bill and thus reduce the cash surpluses you have worked so hard to garner.
Be diligent in your record keeping – and I honestly believe eclat can help you to do this. It’s not just the easiest to use accounting software for small business, it also helps you to accurately record your transactions and ensure your GST compliance.
Peter Murray BBus
Professional Accountant, Small Business Advisor and designer of eclat.bos Accounting Software.