When running a small business, it can be easy to misplace documents and leave your self-assessment tax return to the very last second. Typically, this wouldn't cause many problems. However, the Australian tax authorities occasionally carry out audits on a random selection of tax returns. If you receive notification that your accounts are going to be audited by a tax inspection, it is likely that you worry about what they might find. Below is a guide to the steps you should take if you discover that the tax man will be visiting you.
Locate Any Paperwork
Under Australian law, you are required to keep any tax records for five years so that it is available in the event of an audit. If you have not done this, or if you discover that some of the documentation is missing it is important that your try to locate any copies you may have. If you are unable to provide the documentation, the tax office may instead use an estimate of your earnings which could result in you having to pay more tax than you need to. If you use a business accountancy service, you should check if the office holds any of the relevant paperwork.
Organise Your Office
When the tax auditors visit your office, they will primarily be interested in the financial figures you present to them and the associated paperwork. However, they will also be making a note of how well organised your office is and what systems you have in place. By getting organised before they arrive, you can create a good impression while will help to demonstrate that you have taken steps to deal with any problems.
Contact a Business Accountant
Your next job is to contact a business accountant. The accountant will be able to inspect your accounts and your tax returns to try and pre-empt any problems. If the tax accountant discovers that you have omitted certain things by mistake or under reported your earnings, this will give you the chance to confess this to the tax man before he sends in his auditors. Even if you come clean about any errors, it is unlikely that the audit will be cancelled. However, raising any issues in advance can help to mitigate the level of punishment you receive.
If your business is about to undergo a tax audit, you should get in touch with a qualified business accountant today for further help and assistance.
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