Hello! When I started my own small business, I didn't really give much thought to how I would pay tax. I mean, I realised that I would have to pay tax at some point, I just didn't understand when I would have to pay it or how much I would have to pay. I tried doing some research, but I soon discovered that tax is a very complicated business. One day, I got a letter from the tax office asking me why I had not filed a tax return for the previous year. I panicked and contacted a tax service. The tax service was great. The staff looked at my accounts and calculated exactly how much tax I would need to pay. This blog is all about the benefits of using a tax service.
Do you feel as if you pay more than your fair share of taxes? In Australian society, there certainly seems to be a tax for everything, and you may feel as if you are constantly contributing to the public pot. If you're a small business owner, then you will have your work cut out to account for your taxation and may even consider yourself to be an unpaid collector. Yet you can still overlook a particular return if you're not careful, and this is related to benefits that you may provide 'in-kind'. Could you be affected?
Piece of the Action
While tax is typically levied as a percentage of a certain cash amount, the ATO is keen to get their fair share of any benefits that may be paid in kind. There are many different types of transaction involved and the benefits may often be more theoretical than actual, but nevertheless, they are written into the tax code and must be accounted for.
Transportation is a more well-known example here, as some employees may receive a vehicle as part of their working tool kit. They may use this car or truck for sales or delivery calls, which is certainly a valid expense in its own right, but their personal use may be seen as a fringe benefit and should be accounted for independently.
If you are a grateful employer, you may throw a party for your staff at Christmas time. You may give them presents in tangible or intangible form, and the ATO may consider these to be fringe benefits as well.
It may be tempting to 'forget' about these fringe benefits and hope that the tax people will simply be unaware. Don't forget that the authorities can crosscheck data using a variety of different tools, and they have algorithms that may highlight something that appears to be incomplete. In the worst-case scenario, they may send you a notice and schedule a full audit, so it's best to be open and up-front about everything instead.
Keeping Up With It All
The tax authority has a long list of what they consider to be fringe benefits, and they expect you to account for these, come what may. As it can be difficult to keep up with all of this terminology, it makes sense to employ a tax consultant instead. They will help ensure that you keep on top of the paperwork and avoid penalties.Share
14 June 2019