‘Business as usual’ is returning to the ATO now that the severity of the Covid-19 pandemic is subsiding.
This means it’s re-starting debt collection and audits. Now, more than ever before, your business needs sound, proactive tax and accounting advice.
By Paul Rattray
For the Federal Government, and the Australian Tax Office, much of this year has been focused on lending a helping hand to Australians and Australian businesses as Covid-19 caused disruption on a scale we have never witnessed before.
But as the virus subsides to a ‘controllable’ level around the country, and Victoria’s case numbers show positive signs of decline, the ATO has openly stated that it will be re-engaging with businesses and individuals who owe a tax debt, although won’t be going ‘too hard, too early.’
That doesn’t let anyone off the hook though. The ATO has not gone ‘soft’. it simply means that the ATO will consider individual circumstances, and this is a sensible approach. Some businesses have thrived this year, others are barely hanging on, and as the post-pandemic recession sets in, the tough times are not over yet.
In recent years the Federal Government has invested heavily in the ATO, providing it with manpower and additional resources. It has sophisticated data-matching systems backed by legislation that enables it to check information from various sources. Essentially what this means is that flagging and tracking anyone who owes a tax debt is easier than ever before. It also means that audits are on the increase.
The ATO has also made no secret of the fact that it is checking on businesses which received JobKeeper to ensure they have been eligible and compliant, and also on anyone who took advantage of early superannuation drawdowns.
Of course, JobKeeper (particularly the second round) has not necessarily been straightforward and some businesses will have made genuine errors, and that’s understandable.
But those businesses or individuals who may have tried to rort the system will be caught, and the ATO will pursue criminal prosecution if necessary.
On top of this, the Government has now announced a range of tax cuts – which is great news – but implementing these accurately in your business is going to require a deep dive into the ATO explainers to make sure you know exactly what’s required.
These are all good arguments for ensuring that you’re getting sound, proactive accounting and tax advice. Not only will this avoid any silly mistakes, but having an agent who understands the ATO system and the ‘jargon’ puts a buffer between you and the ATO should it be necessary. A professional accountant or tax adviser can often deal with any disputes or discrepancies much more quickly and easily, saving you the headache.
What’s also important – if you haven’t already done so – is to invest in good software that will track your finances, and report directly to the ATO via Single Touch Payroll (STP).
STP reporting is now mandatory for all businesses and although there has been some leeway in the compliance deadline as a result of Covid-19, the ATO will undoubtedly be pursuing this in the coming months as well.
Dedicated software such as Xero will not only simplify your internal processes, but give you a ‘real time’ picture of your finances, at any time, which is vital for taking control of your business, and staying in control. What’s more, it’s STP-ready.
Over the coming months, being dedicated to the financial health of your business will be the only way to survive the economic slowdown, because if you take your eye off the ball, you run the risk of not picking up key warning signs of insolvency.
There’s still much economic uncertainty not just locally, around the globe too, so it’s imperative that business owners really get on top of all aspects of business finance, but especially tax obligations.
At ATB Partners we have more than 60 years combined experience working with mico, small, medium and family businesses. We know the unique challenges you face, particularly at this time.
If we can help, contact us.