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Inactive ABNs will be cancelled
To maintain accurate data, the Australian Business Register (ABR) periodically checks its records for Australian business numbers (ABNs) and automatically cancels those that appear inactive. The ABR checks are happening throughout 2018.
Your sole trader, partnership or trust ABN’s cancelled if you have:
- told ATO that you have stopped your business activity
- declared no business income for the last two years
- not lodged business activity statement or income tax returns for more than two years.
To avoid ABN cancellation, your outstanding ATO lodgments need to bring up to date.
Sometimes sole traders have forms outstanding because they think they don’t need to lodge if their income is below the tax-free threshold. Please keep in mind that regardless of your income you need to lodge the:
- individual tax return including the supplementary section
- business and professional items schedule for individuals.
It is important ABR information remains current, as the public uses ABN Lookup data to verify business and GST status. If you are no longer operating a business, you can updateExternal Link your business structure and cancelExternal Link your ABN. If you are deciding to start running your business again, you can easily reapply
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ATO focus on fringe benefits tax
When it comes to fringe benefits tax (FBT), a simple mistake or omission can attract ATO’s attention. To help you with FBT reporting this year, ATO has highlighted some common errors to avoid. These include:
- failing to report an employee’s private use of a company car
- claiming exempt food and accommodation in living-away-from-home allowance benefits
- undervaluing employee car park benefits
- incorrectly claiming employer exemptions and rebates.
Keep in mind ATO focus areas, as these will help you to be clear on obligations and entitlements when reporting FBT
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· Nothing to report on your activity statement?
Even if you have nothing to report this quarter, you still have to lodge a nil activity statement.
If you can’t lodge or pay by the due date, contact ATO or your tax agent as soon as you can so that we can reduce the likelihood of any penalties.
Remember, registered tax agents and BAS agents can help you with your tax.
· Making compliance happen
From 1 July 2018 Australian goods and services tax (GST) will apply to sales of low value goods sold to consumers in Australia. Businesses that meet the A$75,000 registration threshold will need to register for GST, charge GST on relevant sales and remit the GST to us by lodging returns.
ATO will take action against businesses who do not meet their GST obligations.
ATO expectations of you
ATO expect that you will:
- comply with your obligations under the law
- contact ATO or your registered tax agent as soon as possible if you have difficulty in complying.
What you can expect from ATO
ATO will:
- treat you fairly, reasonably and consistently
- consider your circumstances
- work with you to find solutions to issues you are having.
Businesses that don’t do the right thing
Serious consequences, such as interest, penalties and potential prosecution can apply if you:
- deliberately fail to register for GST when you need to
- intentionally fail to report, or consistently under-report, your tax obligations
- conspire with others to evade or avoid tax obligations
- intentionally do not meet your tax obligations.
Consequences for non-compliance
The compliance treatments ATO use vary according to the type of behaviour you exhibit. ATO group business behaviours into categories and apply an appropriate approach to each of those categories.
If you choose not to comply with the law, the Commissioner of Taxation can take actions including:
- registering you for GST
- imposing an additional 75% administrative penalty, which then becomes legally payable
- intercepting funds from Australia that are destined for you
- registering the debt in a court in your country
- requesting the taxation authority in your country to recover the debt on ATO behalf.
Source: ATO website