As a business owner, it’s essential to stay on top of your compliance management and the relevant requirements you have with the Australian Taxation Office (ATO) to avoid costly penalties and legal consequences.
In this post, we’ll cover the elements of annual compliance, how to ensure that you’re compliant, and what happens if you’re not.
Elements Of Annual Compliance
The elements of annual compliance can vary depending on your business’s size, structure, and industry. Generally, they include lodging business activity statements (BAS), annual tax returns, PAYG withholding summaries, superannuation guarantee information, and other documents.
Compliance Management Best Practices
To ensure that you’re compliant with the ATO’s requirements, your business must keep accurate and up-to-date records of all your financial transactions. It’s also crucial to stay informed about any changes to tax laws and regulations that may affect your business.
To make compliance management easier, consider seeking the help of a professional accountant like Allevi8HQ, who can guide you through the process and ensure that you’re meeting all your obligations.
Certificates, Lodging & Dates
You should start by obtaining a tax file number (TFN) and Australian Business Number (ABN) if applicable. To remain compliant, the ATO needs to be notified of any changes to your business that affect these certificates.
You should ensure that you lodge all necessary documents on time and are aware of key dates, such as tax return due dates and other compliance deadlines.
Businesses and individuals must submit their tax returns to the ATO between 1 July to 31 October. Extensions apply if you lodge via your accountant or registered tax agent.
Financial Records & Audits
A key component of compliance is maintaining accurate and up-to-date financial records that correctly reflect your company’s financial position. Larger companies have additional obligations to lodge financial reports with ASIC, which must be kept for at least seven years.
The financial records that a company must maintain include the statement of profit or loss, statement of financial position (balance sheet), statement of changes in equity, and statement of cash flow.
For larger proprietary companies, annual financial reports must also be prepared in accordance with Chapter 2M of the Corporations Act 2001, audited, and lodged with ASIC within four months of the financial year-end. These reports must also be sent to members within four months of the financial year-end. In Australia, the financial year begins on 1 July and ends on 30 June of the following year.
Does My Business Need To Lodge An Annual Tax Return In Australia?
Yes, in Australia, most businesses are required to lodge an annual tax return with the Australian Taxation Office (ATO). The lodgment date and requirements may vary depending on the legal structure and size of the business. Small businesses with a turnover of less than $10 million may be eligible for simplified reporting options.
Directors of a proprietary company may appoint an auditor if the company has not appointed one in a general meeting. Public companies, on the other hand, must appoint an auditor within one month of registration unless an auditor has already been appointed in a general meeting.
What Does The ATO Look For In Their Annual Compliance Review?
The ATO conducts an annual compliance review (ACR) to ensure that businesses are meeting their tax obligations and complying with Australian tax laws.
During the review, the ATO may look at various aspects of a taxpayer’s business, such as income, expenses, deductions, and tax payments. They may also examine the taxpayer’s record-keeping practices, including how they store and maintain financial records.
The ATO may also check that the taxpayer has reported all their income and claimed only legitimate expenses and deductions.
What Are The Implications Of Non Compliance?
Non compliance with ATO requirements can result in serious consequences for your business, including penalties, fines, and legal action. The ATO has the power to impose harsh penalties for non compliance, so it’s essential to take your compliance obligations seriously.
In summary, maintaining compliance with the ATO is crucial for the long-term success of your business. By staying up-to-date with your obligations, maintaining accurate records, and seeking expert guidance when necessary, you can avoid the negative outcomes associated with non compliance.
Partnering with a trusted professional like Allevi8HQ can provide you with peace of mind, knowing that your business is in good hands. Get in touch with us today to ensure that your business stays compliant.
