Bookkeeping Solutions – Dealing with the ATO and GST Audits!
As an owner of a Small Business Australia you may find yourself in the position of developing a relationship with the Australian Taxation Office. As the owner of a home based small business you may find this a bit daunting!
There are several things you can do to maintain a good relationship with the ATO:
- Address issues promptly, for example, if you are short of cash to pay any liability you have with the ATO, contact them and arrange a payment plan. I have found that the head in the sand approach does not work!
- Liase with the ATO via your Tax Agent of Accountant
- Engage an experienced Bookkeeper who can liase with the ATO on your behalf
- Use the ATO business portal to manage your Tax Affairs and keep an eye on your Account with the ATO.
If you are selected for a GST Audit:
I have handled audits from the ATO for several of my bookkeeping clients and have found it to be a relatively simple process. When you lodge your BAS statement you will receive notification that it has been selected for an audit, and can not be finalized until the audit is complete. If you are expecting a refund this will mean that your refund is delayed. If you are due to pay GST I would make the required payment before the due date.
The ATO normally ask for the following:
- A transaction list for the GST period in question – if you use an accounting software program this can be easily obtained. This is a list of all transactions processed for that period, showing the GST portion of each transaction
- Copies of 6 Tax invoices from that transaction list – Sometimes the ATO will let you select the 6 invoices, but other times they will select at random from the transaction list you have supplied. This may cause a problem is the ATO selects a particular transaction from your transaction list and then you can not find that particular invoice in your records! Once again it comes back to being organized and having a system!
Once the ATO has all the information and if all is in order, they will finalise the processing of your BAS statement.
If your business regularly receives a GST refund you can expect to be subjected to a GST Audit. Alternatively, if you normally pay GST and then lodge a BAS that shows a refund the ATO may single you out for an audit. This can happen quite legitimately, for example if you purchased a lot of assets you may have a large GST credit to claim back. All you need to do is to produce the Tax Invoices for the asset purchases to justify your claim for GST credits, and everyone will be happy!
GST is a big part of Bookkeeping Australia and has certainly complicated the Bookkeeping process. To learn how to Be your Own Bookkeeper for your Home based small business go to the resource box and check my web site.
http://www.BeYourOwnBookkeeper.com
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