A Guide to Governance - How to Ensure That Your Business is Tax Compliant
Running a business takes a lot of hard work, and owners oversee all of it. Staying on top of finances and tax compliance can sometimes seem frustrating, but keeping your business tax compliant needn’t give you a headache. If you keep up with your taxes throughout the year, filing a business tax return will be faster and easier. Here are some tips on keeping your business tax compliant from start to finish.
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 essential to stay updated 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. 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, you must have a trusted professional tax accountant to draw upon and turn for guidance, primarily through the end of the financial year period. Tax legislation can change from year to year. So it’s essential to stay updated with these changes and report as required.
Prepare Mandatory Forms
Each financial year, business owners are required to lodge several reports and organize 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 installments paid towards your tax. The other main report is your Income Tax Return, which reports your personal and business income and any claiming deductions.
Keep Accurate Records
To create and submit accurate financial statements, you need to keep correct records 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 makes your life much easier when lodging your tax documents and makes tracking your business progress that much easier.
Have Systems in Place That Work
Businesses’ that manage to meet tax obligations hassle-free have taken the time to set up systems that work with the right people 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 millions of things up at the last minute. Sending recurring invoices, filing receipts, staying on top of clients that owe you money. Doing bookkeeping regularly will all make your life much easier come tax time—just waiting organized.
Tax compliance doesn’t have to be complicated. 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.