Compliance Services
Carrick Ashmead provide a flexible range of compliance services, including:
- income tax return preparation and review
- compliance management, including monitoring deadlines, handling notices, payments and lodgements
- taxation dispute resolution and management of tax audits
- GST, FBT, and PAYG compliance
- compliance reviews and due diligence investigations
- ABN/GST registrations and advice on the New Tax System
- tax minimisation strategies and forward planning
- electronic solutions for taxation records, calculations and returns
- self managed superannuation fund administration and reporting
- advice on tax effective wills and estate planning
Voluntary compliance reviews and ATO self assessment
Self assessment means that income tax returns are accepted as being correct at the time of lodgement, and the onus of proof rests with the taxpayer. The taxpayer must satisfy two tests: the reasonable care test and the reasonably arguable position test.
If the taxpayer is found to not have exercised reasonable care in the preparation of the income tax return or maintenance of records, or does not have a reasonably arguable position, a penalty of at least 25% of the tax shortfall is payable. If the taxpayer is found to have been reckless, a minimum penalty of 50% of the shortfall will apply and if they are found guilty of intentional disregard, a minimum penalty of 75% of the shortfall will apply. In addition, a general interest charge will be applied to the outstanding amount, which is calculated daily on a compounding basis from the period when the tax was due until paid.
The ATO has advised that it aims to check taxpayer GST records at least once in a five year period, while income tax audits and investigations are less frequent, but much more involved.
It is possible to purchase insurance to cover the costs associated with an ATO audit or investigation, and Carrick Ashmead can arrange quotes for this cover.
A voluntary compliance review can identify and resolve any issues before any problem arises, so you will be well equipped to deal with any ATO enquiries. A voluntary compliance review can involve some or all of the following elements:
- systems and record keeping review
- data retrieval and storage issues
- staff training, knowledge and compliance issues
- identification of inefficiencies and cost savings, eliminating duplication
- determining whether the Simplified Tax System could reduce costs
- determining whether a change of structure could reduce overall tax payable
Voluntary compliance reviews can uncover common deficiencies, including:
- profit and expense ratios being out of line with ATO industry statistics
- data matching discrepancies, eg. omitted or understated investment income
- incorrect GST treatment of transactions
- incorrect classification between capital and revenue expenses underpaid superannuation guarantee obligations
- incorrect treatment of trading stockundisclosed capital gains
- incorrect claims for prior year losses
- poor GST recording and data retrieval systems
- out dated business structures that are no longer tax efficient
The following questions will help you to establish whether your business would benefit from a voluntary compliance review. Please contact us via the link below for further information and to arrange an appointment.
- if an ATO officer knocked on your door unannounced, would you know what to do?
- could you locate and produce your business records going back as far as six years?
- are you confident that all income has been disclosed in your income tax returns?
- do you hold a reasonably arguable position and supporting records for all deductions made in your income tax returns?
- have your staff been instructed on how to handle ATO enquiries?
- are you confident that you have paid the legally correct minimum amount of tax?
