Seeking professional tax accounting services and using cloud platforms such as the Xero accounting software help you thoroughly comply with your tax liabilities.
We explain this in more detail below…
What does it take to effectively manage your business finances? There are many different ways to respond to this question. For business owners like you, putting tax compliance at the top of your priority list is a good way to start. By definition, tax compliance is the extent by which a taxpayer adheres to the taxation laws. The processes involved in tax compliance include the correct declaration of income, lodging a return and paying tax bills
Assessment of your own tax liabilities
The ATO utilises a system that urges business owners to check their own tax compliance in the most convenient way possible. This is known as the self assessment system. The system works with the help of a thorough assessment of taxes, which keeps the taxpayer informed regarding tax bills and possible refunds. This system also allows the ATO to review the lodged returns at a later date.
Checking of your tax refund
The tax office understands the need for modern technology to keep tax refunds in check. As such, the ATO uses a system that seeks to determine the accuracy and validity of tax returns at a given period. This same system is used to check if the information provided by the taxpayer is complete and accurate.
Financial ratios for your SME
There are some businesses in Australia which may not be correctly lodging their tax returns. To help determine which of these Australian businesses are “cheating” on their tax liabilities, the ATO uses benchmarks to compare business performance and profit of businesses that belong to the same industry. This process makes it easier for the tax office to ensure tax compliance among Australian SMEs.
Strategic data checking
The ATO has different ways of gaining access to the financial information of your business. Such information may be sourced through banks and financial institutions, not to mention other government agencies. These shall be used to make sure that the information passed on to the ATO, which affects tax computation, is correct.
Random reviews and audits
The ATO is authorised to check tax compliance through a random audit. These audit procedures allow the tax office to take a look at all your tax pertinent financial information. By keeping all of these information in check, the ATO will have a way of finding out whether a business has indeed reported tax liabilities correctly or not.
Tax compliance is an important civil obligation that every business owner should take seriously. Make sure that your income is declared accurately, your taxes lodged on time and your tax bills settled properly by consulting with a tax expert.
Now is the best time to get your taxes in order. To assist you in the different facets of tax compliance, you may get in touch with our advisers at HTA.
