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Avoid these small business tax errors

Unwanted attention and penalties from the ATO can jeopardise your small business.

Protect your business by avoiding these common small business tax errors.

Not using an accountant
Tax laws frequently change, and compliance requirements can be time-consuming and demanding. A registered tax agent will streamline your financial processes, provide advice on maximising your finances and keep you compliant.

Inaccurate tax returns
Small businesses that do not declare their income and deductions accurately will attract the ATO’s attention and financial penalties. All foreign income, capital gains tax, business sales and bank interest must be declared. You must also have legitimate evidence supporting your tax deduction claims.

Poor record keeping
Businesses that fail to keep accurate records will struggle to remain compliant. It is vital to keep:

Incorrect superannuation payments
The ATO will sanction employers that fail to pay their employees’ superannuation correctly and on time. Make your mandatory quarterly payments are paid at the correct rate of 9.5 per cent of your employee’s pay. The cash-flow benefits of delaying super payments and missing deadlines are not worth the financial and criminal punishments incurred by frequent breaches.

Posted on 14 December '18 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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