9 mistakes private businesses should watch out for when doing their tax returns

SMEFringe Benefits TaxGST

20 July 2021

The Australian Tax Office (ATO) makes extensive use of data matching to identify incorrect claims made by private business taxpayers in their tax returns.

To help you falling foul of the ATO this financial year, here are nine of the most common actions private business taxpayers take that might attract the ATO’s attention.

  1. Failing to register for applicable taxes, keep records or not lodging your tax returns on a regular basis.

  2. Under reporting income that does not match the lifestyle of the business operators.

  3. Reporting income and expenses differently from how other similar businesses report their income and expenses.

  4. Failing to deduct PAYG withholding from employee wages or sending it to the ATO.

  5. Failing to pay superannuation.

  6. Failing to pay the correct amount of FBT or incorrectly accessing FBT concessions.

  7. Incorrectly registered for GST but is not carrying on an enterprise.

  8. Failing to report the income received from government grants.

  9. Failing to correctly manage their private loan or Division 7A obligations.

Working with an accountant can help you avoid mistakes when lodging your tax return as well provide you with opportunities to maximise the return available to you. For help with your business tax return, please speak to your adviser or contact the Findex Tax Advisory team today.

Author: Roelof van der Merwe

Roelof is the National Tax Director of Findex and has more than 15 years' experience in Australia delivering practical tax and consulting services. Roelof joined Findex after gaining experience in Big 4 and mid-tier firms. Roelof helps to ensure that Findex stays up-to-date with the latest developments by interpreting technical tax information in a practical and relevant manner. He has experience on a wide variety of complex tax related topics and has the ability to identify, understand and clearly communicate how the tax law may impact business transactions and taxpayers.