By Tina Zawila
Goods and Services Tax (GST) came into effect in Australia via “A New Tax System (Goods and Services Tax) Act 1999, on 1 July 2000 and 23 years on, many businesses still don’t get it quite right according to the ATO, who has said that we should prepare for a surge in GST audits to bridge the $8 billion gap between what they believe has been paid to what is owed.
So how can business owners help themselves get it right?
1. Use specialised accounting software and tools tailored to GST Compliance that have the ability to automate aspects of the bookkeeping process. We recommend Xero Online Accounting Software which if set up correctly and with the right training can save business owners time and trouble when it comes to preparing their Business Activity Statements (BAS) to report GST to the ATO.
2. Ensure data quality. Even with the best bookkeeping software in place, if the data entered into the system is inaccurate or incorrect, the reporting will also be inaccurate and incorrect. Again, the use of software that automates data entry is ideal (Xero automates data entry directly from financial institutions into the software).
3. Seek professional help. If bookkeeping and tax compliance isn’t your thing, outsource this aspect of your business to a professional! Bookkeepers and Tax Agents can assist you with everything from full data processing, to simply reviewing and/or lodging the BAS for you.
Even if you have implemented the three suggestions above, you may still find yourself subject to an ATO GST Audit.
So what should you avoid or be aware of?
The ATO has identified what it calls GST red flags and how it will select audit targets including:
Size of turnover and GST liability.
Notable deviations from previous GST lodgements.
Previous compliance history.
Repeated late lodgements, extension requests and late payments.
Retail industries and those with high volumes of cash transactions.
Property and other sectors involving large, complex transactions.
Financial records that deviated from industry norms.
Misalignments between income tax and GST records.
The size and frequency of GST refunds.
You should note that none of these individual red flags may be a cause for concern, however, if more than one applies to your business, you should be aware that you could be on the ATO’s radar.
If you need professional help or advice, call our team at UHY Haines Norton CQ on 4972 1300, we are here to help with all of your bookkeeping, accounting and taxation compliance needs.
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