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For small to medium-sized business owners, the tax season can often bring about a sense of unease, particularly when terms like "ATO audit" start circulating. The anxiety often arises from a lack of familiarity with tax requirements and the potential risks linked to non-compliance. But fear not, the Attune Advisory team is here to steer you through the landscape of tax risks.
The world of business tax risks entails the possibility of financial penalties and reputational damage stemming from non-adherence to tax regulations. Businesses face risks when they fail to accurately pay taxes, meet return deadlines, or faithfully represent their financial situation.
High-risk strategies, such as aggressive tax planning, can lead to audits, fines, and even legal action. Common areas of concern include misreporting income, claiming ineligible expenses, and errors in GST reporting. However, armed with knowledge, you can minimise the odds of a time-consuming and costly ATO audit.
The Australian TaxOffice (ATO) conducts audits to verify businesses' compliance with tax obligations. An ATO audit is essentially a review of your business's financial information, ensuring that your declared income aligns with the taxes paid.
The ATO has four primary expectations of taxpayers:
Effectively managing tax risks involves identifying, assessing, and mitigating potential taxation-related hazards. This encompasses adherence to relevant tax laws, minimising tax liabilities, and maintaining open communication with tax authorities. Implementing robust tax risk management strategies can considerably reduce financial losses and enhance overall business efficiency.
The Tax Risk Management and Governance Review Guide serves as an essential tool for businesses to effectively manage tax-related risks. It provides a framework of principles and guidelines that promote transparency and good governance in tax affairs. This guide benefits both tax authorities and taxpayers by fostering improved tax compliance strategies and enhancing overall tax administration.
Proactively reviewing your tax risks offers several advantages. It enables you to identify areas of potential non-compliance before they escalate. Additionally, a thorough review can uncover opportunities to optimise your tax position within legal boundaries, potentially leading to significant cost savings. Moreover, the review process brings peace of mind, eliminating uncertainties about potential ATO audits. Working with your Attune taxation advisor for this review can provide fresh insights and efficient navigation of tax compliance complexities.
What triggers anATO Audit? The ATO may initiate an audit in response to unusual fluctuations in income or expenses, inaccurate reporting, late lodgement of returns, or consistent business losses.
How can I prepare for an ATO Audit? Maintain accurate financial records, regularly assess tax risks, and stay in touch with theAttune team if you require assistance or have questions.
How can I minimise tax risks? Prioritise diligent record-keeping, stay informed about tax laws, but most of all, access experienced and tailored planning and risk assessment help with the Attune accounting team.
Embrace Informed Decision-Making Understanding and managing tax risks is crucial for sustaining a thriving business. While it might seem daunting, with experts on your side, you can navigate these complexities with confidence. Remember, knowledge is power, and being well-informed can set the stage for business success.
If you're a small or medium-sized business owner grappling with tax risks and concerns about ATO audits or looking to ensure you’re processes and tax obligations are in the best shape, we’d love to chat.
Reach out to the Attune team today by calling 1300 866 113 or booking an appointment via our website.
As a business owner, you are well aware of the myriad decisions that demand your attention on a daily basis. Among these crucial choices is the potential sale of shares in your company or your interest in a trust. However, comprehending the taxation implications, particularly the Capital Gains Tax (CGT) concessions related to this kind of thing, can feel like a daunting task.
Fret not, the Attune Advisory team is here to assist you through this process with tailored guidance to provide complete clarity.
With that in mind, we thought we’d put together a top level overview of CGT concessions in this scenario to help you get a quick grasp if you’re in a situation where this could affect you or your business…
When you decide to sell shares in a company or interest in a trust, you may be eligible for SmallBusiness CGT Concessions, potentially resulting in significant tax savings during the transaction. While the rules and conditions can be intricate, understanding them ensures you make informed decisions and, potentially, maximise your financial outcomes.
Accessing theSmall Business CGT Concessions when selling shares or trust interest hinges on two tests:
+ The ActiveAsset Test:
In addition to the above tests, the company or trust must satisfy the active asset test. This test essentially requires that at least 80% of the assets in the company or trust(by market value) are used in the course of carrying on a business.
What if I don’t pass the Significant Individual Test? If you don't meet the criteria for the Significant Individual Test, there is still an alternative. You can satisfy the CGT concession stakeholder test. As a CGT concession stakeholder in the company or trust, you may be eligible for concessions if, together with other CGT concession stakeholders, you hold at least 90% of the shares or interest.
Do these rules apply to shares or trust interest held as an investment? Unfortunately, the Small Business CGT Concessions do not apply to passive investments. To qualify for the concessions, the shares or trust interest must be related to your active small business operations.
If you are contemplating selling shares in your company or your interest in a trust, it is crucial to understand the potential tax implications. The Attune Advisory team is here to help you navigate this complex area with tailored, strategic advice that ensures you benefit from all applicable tax concessions.
Book an appointment with us via email or call the Attune team on 1300 866 113 to discuss your situation in detail. Our team will provide tailored, strategic advice to help you make informed decisions based on your unique circumstances.
Navigating the complex world of small business CGT concessions doesn’t have to be a solo journey. With expert guidance from Attune Advisory, you can confidently move forward, knowing you are minimising your tax liability while maximising your financial position. As you embark on the path of selling shares or trust interest, our dedicated team is here to support you every step of the way. Trust in our expertise to make the most of your financial opportunities and secure a prosperous future for your business.
As a small or medium business owner, your responsibilities can be overwhelming, especially when it comes to managing employee payroll tax and Pay As You Go (PAYG) withholding. These areas can be complex and demanding, with various obligations, calculations, and deadlines.
At Attune Advisory, we understand the challenges you face, which is why we've created the below guide to help demystify these topics and provide guidance based on state and territory government revenue authorities and Australian Tax Office (ATO) requirements.
Pay As You Go (PAYG) withholding is a system where employers withhold tax amounts from their employees' payments and remit them to theAustralian Taxation Office (ATO). This system ensures that employees meet their annual tax liabilities. As you’re likely aware, the amount of tax to be withheld depends on the employee's earnings and the information provided in their Tax file number declaration but if you have any uncertainty around this, definitely reach out to the Attune team.
As an employer, you have several tax obligations related to PAYG withholding. These include registering for PAYG withholding, withholding the appropriate amounts from employee wages, reporting and remitting these amounts to the ATO, providing payment summaries to employees, and submitting an annual report to the ATO.
Setting up your employees for tax and super involves collecting Tax file number declarations, using tax tables to determine the amount to withhold, and making superannuation guarantee contributions for eligible employees. If you have multiple staff members, you’re probably across this, but if you’re hiring your first employee, give the Attune team a call and we can help you through the process.
Payroll tax is a state and territory tax imposed on employers based on the wages they pay. The tax amount varies across states and territories, and specific thresholds determine when employers become liable for payroll tax.
Payroll tax applies to all employers whose total wages exceed the specific threshold set by their jurisdiction. If your totalAustralian wages surpass the threshold, you must register for payroll tax. Once again, if you’re looking for advice on your Payroll Tax requirements, we’re here for you.
Note there’s specific thresholds to be aware of when it comes to where your business operates and is located, so it’s worth chatting to the Attune team to ensure you’re covered with your Payroll Tax obligations.
Certain components of termination payments are subject toPAYG withholding, such as unused leave, redundancy payments, and payments in lieu of notice. Additionally, employers have an obligation to make superannuation contributions for eligible employees.
Pay rates and conditions for employees vary based on their industry, job, and any applicable awards or agreements. Fair Work Australia provides resources to help employers understand their obligations in this regard.
Employing casual workers may involve different tax and super obligations. It's crucial to understand these distinctions and ensure compliance with the relevant requirements, and we can offer you tailored advice that suits your needs when looking to employ a casual worker.
At Attune Advisory, we offer expert advice tailored to your business needs. Book an appointment online or give us a call to receive tailored, strategic advice that will ensure your business is operating at its optimum level.
If you’d like some help navigating your Payroll Tax and PAYG, reach out to the Attune team on 1300 866 113 or send us an email to book an appointment.
As part of the Australian Government's commitment to supporting small businesses and promoting energy efficiency, a new tax incentive known as the Small Business Energy Incentive was announced on 30 April 2023.
This incentive aims to assist small businesses in their energy transformation efforts, helping them save on energy costs while contributing to a more sustainable future. The Attune Advisory team is here to provide you with all the essential information you need to take advantage of this incentive, starting with some of the details as outlined below…
The Small Business Energy Incentive offers businesses with an annual turnover of less than $50 million an additional 20% tax deduction on expenditures that support electrification and more efficient energy usage. This means eligible small businesses can invest in assets or upgrades that promote energy efficiency and sustainability.
The incentive allows small businesses to make investments in various areas, including:
Small businesses can claim a maximum bonus tax deduction of$20,000 through this incentive. The total expenditure eligible for the incentive is capped at $100,000. By leveraging this incentive, you can not only save on energy costs but also enhance the financial health of your business!
To be eligible for the Small Business Energy Incentive,assets or upgrades must be first used or installed ready for use between 1 July2023 and 30 June 2024. It is important to note that this measure is not yetlaw. Stay updated on the latest developments and consult with the AttuneAdvisory team for personalised guidance based on your specific circumstances.
Small businesses play a vital role in our communities, and the Small Business Energy Incentive ensures they can actively participate in the ongoing energy transition. By making investments that lead to energy savings, small businesses can lower their operational costs and contribute to reducing emissions. The incentive aligns with the government's efforts to build a stronger, sustainable, and resilient economy, creating more opportunities for all Australians.
The Small Business Energy Incentive, with an expected cost of $314 million over the forward estimates, has been strategically introduced to support small businesses in laying the foundations for future growth. It positions them to bounce back after a challenging period for the economy, allowing them to embrace energy efficiency and sustainability, leading to long-term success.
Contact Attune Advisory today to learn more about how this incentive can benefit your business and ensure compliance with the evolving legislation. We’re here to offer you tailored, strategic advice to set you up for success. Call the team on 1300 866 113 or send us an email to start the conversation.
The information provided in this blog post isbased on the available information as of the date of writing. Please consultwith us for the latest updates and personalised advice related to the SmallBusiness Energy Incentive.
