Morrows has extensive experience in dealing with the ATO. Here are some valuable pointers on how to stay on the straight and narrow with the Taxman:
1. If you’re unsure about the tax consequences of a transaction, get advice before proceeding
Selling significant assets or engaging in new types of business transactions can have significant and unforeseen tax consequences. Understanding these consequences is an essential step in your personal or business planning.
2. Understand the implications of your withdrawals from your business
You can be heavily penalised by the ATO for drawing money from your business inappropriately. Let Morrows steer you in the right direction and advise you on managing these drawings.
3. Make sure your lodgements are up to date
The squeaky wheel gets the oil, and so taxpayers that are behind in their lodgements are frequently targeted for ATO audits. Stay off the radar by getting up to date.
4. Ensure your trust resolutions have the intended effect
Ineffective trust resolutions can have disastrous tax consequences, including 47% tax rates. It is crucial to get these right.
5. Only collect and pay GST when you need to, not when you don’t
This is especially important for anyone planning to develop, subdivide and sell land due to the large sums involved.
6. Don’t claim deductions for entertainment expenditure
This applies to business lunches as well, even if there is a chance of winning a client.
7. Comply with your superannuation obligations as an employer
You need to pay at least 9.5% of your workers’ wages each quarter. This may include contractors if you use them principally for their labour.
8. Get advice before you acquire assets in your SMSF
Only certain assets can be acquired from parties related to your SMSF. Morrows is experienced in providing superannuation advice and can ensure you stay on the right side of these rules.
9. Monitor your super contribution caps for the year
Many people inadvertently exceed their superannuation caps, especially if they have more than one super fund. Historically, the ATO quickly follows up any excess contributions with penalty tax.
10. Substantiate motor vehicle expenses
If you use a car for both business and personal purposes, you generally need to be able to substantiate the business use (for example, you can record this in a log book).