A lot of hard work goes into running a small business and owners are tasked with doing or overseeing all of it. From networking, sales, and service, to administration, accounting, and fiscal management – and everything in between – owners have many responsibilities. Tax compliance is important, but it needn’t be a burden if you take the right steps throughout the year.
So, what can you do to make sure you’re compliant?
Understand your obligations
First things first; to meet tax requirements, you need to know – and understand – what they are. You can find most of this information online on the Australian Taxation Office’s (ATO) business page. We recommend browsing its business portal too, where you can prepare and lodge statements, view your accounts, and make payments.
Keep timely, complete, and accurate records
To create accurate financial statements, you need accurate records. Because tax compliance is required by law, precision is crucial if you want to avoid heavy penalties. Not only will thorough record-keeping make lodging your tax documents much simpler, it also makes tracking your business’s progress easier. If you use cloud accounting software, like QuickBooks Online, you can easily manage your invoices, expenses, payments, and reports across all devices.
Prepare and lodge all mandatory returns, forms, and reports
Each financial year, small business owners are required to lodge various reports, and pay their business and income taxes. The two main reports are the business activity statement (BAS) and income tax return. The BAS reports on goods and services tax (GST), taxes withheld from your employees’ pay, and instalments paid towards your own tax (if you’re enrolled in the pay-as-you-go instalment system). The income tax return reports your personal and business income, and deductions.
Surround yourself with great advice
Who couldn’t benefit from a little extra support? No-one expects you to have all the answers when it comes to the ins and outs of Australian tax compliance, so having a trusted resource you can turn to for guidance will make things that much simpler. If you’re new to small business taxes or simply looking for some help along the way, reach out to an expert for reassurance.
Stay up-to-date with changes in legislation
Tax legislation can change from year to year. To ensure compliance, small business owners need to stay abreast of any changes and update their processes and reporting as required. For example, new GST protocols have recently been introduced which call for GST to be added to low-value imported goods valued at $1,000 or less, and digital products and services. The best way to ensure you’re up to speed with new obligations is by checking the ATO website or other industry websites and blogs, [LINK TO BEST ACCOUNTING WEBSITES AND BLOGS ARTICLE] or speaking with an advisor.
Tax compliance doesn’t have to be difficult. Surrounding yourself with the proper tools and the right advice will help you stay on the right side of the law.
To learn more about small business tax or for more tips on managing your business, check out these resources.