As small businesses complete their tax-time filings, the Australian Taxation Office (ATO) has issued a quick and concise guide to the most common errors it is observing in SME lodgments.
Taking to LinkedIn on Thursday, the ATO issued three uncharacteristically casual reminders to small businesses.
The tax office is aware of small business operators omitting salary or wages earned outside of their primary business, the notice said.
The ATO cracking down on ‘side hustle’ income should come as no surprise to entrepreneurs, given its repeated claims that secondary income streams would come under the microscope this tax time.
Secondly, the tax office said lodgments are incorrectly claiming business expenses when a portion is related to personal use, using a laptop as an example.
Finally, small businesses are overstating their expenses and the costs of goods sold.
The focus on those deductions is notable, given the ATO’s ongoing war against GST refund scammers, who are estimated to have perpetrated a $4.6 billion fraud against the tax office by claiming deductions for business expenses that simply never existed.
The tax office is now directing small business owners to its own advice webpage while reminding entrepreneurs that accountants and tax advisors can help businesses make better tax-time decisions.
While the LinkedIn message is quite casual in its approach, the ATO is anything but laid-back in its approach to tax compliance, given the burden of collectable tax debt held by small business operators.
The ATO recently warned businesses that make payments to contractors that their Taxable Payments Annual Report documentation must be filed by August 28.
Separately, the tax office recently revealed its artificial intelligence systems are being deployed to monitor Superannuation Guarantee compliance, with its systems reportedly displaying underpayment risk with 90% accuracy.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
