Running a business takes a lot of hard work and owners are tasked with overseeing all of it. Staying on top of finances and tax compliance can seem frustrating at times, but keeping your business tax compliant needn’t give you a headache if you take the right steps throughout the year.
Know Your Obligations
It may seem obvious, but to be able to meet your tax requirements, you must first know and understand exactly what they are for your business. It’s important to stay up to date with any changes the ATO might make and know exactly where your business fits in. Don’t leave it until you see your accountant at the end of the financial year to ask about your obligations and what expenses will be deductible etc. Get on top of it early to set yourself up for success in the year to come. Knowing exactly what your boundaries are will help you keep things on track throughout the year and will make your life that much easier come tax time.
Get Expert Advice
No one expects you to know everything, and you shouldn’t expect that of yourself either. Surrounding yourself with the right people is the key to business success. When it comes to business tax compliance and understanding the ins and outs of the Australian Tax system, it’s important you have a trusted professional and resources to draw upon and turn for guidance, especially through the end of financial year period. Tax legislation can change from year to year, so it’s important to stay up to date with these changes and report as required.
Prepare Mandatory Forms
Each financial year, business owners are required to lodge a number of reports and organise their taxes. The two main reports are the Business Activity Statement, which is essentially a report of the GST you’ve collected on your sales and must be submitted to the ATO to report and pay any tax liabilities. The BAS statement reports on GST, taxes withheld from your employees’ pay, and any instalments paid towards your own tax. The other main report is your Income Tax Return, which reports your personal and business income and any deductions you are claiming.
Keep Accurate Records
In order to create and submit accurate financial statements, you need to keep accurate records the year round. Tax compliance is a legal requirement, and so demands accuracy and clear documentation if you want to avoid penalties. Regular and detailed record keeping with make your life much easier when lodging your tax documents and also makes tracking your business progress that much easier.
Have Systems in Place That Work
Business’ that manage to meet tax obligations hassle-free, have taken the time to set up systems that work, with the right people in place to help them. Once these systems are in place, tax compliance becomes second-nature, rather than a massive ordeal that needs to be cleaned up at the end of the financial year. Ensure your business has systems in place and keep a regular check on your records to ensure you aren’t left chasing a millions things up at the last minute. Sending regular invoices, filing receipts, staying on top of clients that owe you money, and doing bookkeeping on a regular basis will all make your life much easier come tax time. Basically, just staying organised.
Tax compliance doesn’t have to be a difficult, it just requires regular attention. Surrounding yourself with the right tools and seeking trusted advice will help you stay on top of your tax and clear of any costly issues.