MONTHLY TAX UPDATE – NOVEMBER 2017
What can hurt small business?
There are a number of things that cause small businesses to fold and high on that list is poor record keeping.
More than half of the businesses ATO visited in their Protecting honest business campaign need to improve their record keeping. Issues they found include businesses:
- estimating their sales and income
- using the ‘no sale’ and ‘void’ button on cash registers when taking cash payments
- not keeping cash register tapes and not reconciling at the end of the day
- paying their employees cash-in-hand.
ATO recommend to these businesses to attend one of their record keeping workshops. The workshops cover why good record keeping is important and how it will save them time.
ATO’s current action on overdue SMSF annual returns
ATO is taking a tougher stance on SMSFs that have overdue self-managed super fund (SMSF) annual returns, particularly those who have two or more returns overdue.
Their current actions include:
- cancelling approximately 9,000 ABNs of SMSFs that show no evidence of operating
- visiting selected tax agents to obtain feedback on why their SMSF clients’ lodgments are overdue
- contacting tax agents by phone to obtain an agreed date for lodgment of overdue SMSF annual returns
- writing to SMSF trustees who are in pension phase to remind them that they still have a lodgment obligation
- continuing ATO attention on SMSFs with high levels of income and/or high-value assets who also have overdue returns
- taking further compliance and audit action on selected SMSFs.
While trustees are responsible for their SMSF, tax agents also play a key role in supporting SMSFs to meet their obligations and avoid incurring penalties or the loss of tax concessions.
SMSFs that don’t meet the agreed lodgment timeframes will be subject to serious financial implications.
Don’t risk your retirement savings
If you’re planning for your retirement, don’t risk your nest egg by getting involved in arrangements that are at odds with tax and superannuation laws.
ATO have identified a range of new arrangements that are directed towards minimising or avoiding tax. They are designed to help individuals and other related entities to minimise their tax bill by channelling money inappropriately through self-managed super funds (SMSFs).
Often these arrangements are structured in a way so that they appear to satisfy regulatory rules while minimising tax or even providing a tax refund.
If you are involved in an illegal arrangement, you can face severe penalties under tax and super laws. You could lose your retirement savings or your rights, as a trustee, to manage your own super fund.
ATO want to make sure you don’t lose the savings you have worked so hard to earn. If you are concerned about your arrangement, or you have been approached by a scheme promoter, you should seek advice from a trusted advisor or contact us.
If it sounds too good to be true, it probably is.
Source: ATO website