By Patrick Sargent – CEO Pop Business
Are you a little bit behind on your tax returns?
Except for the crunch time around June and July, keeping your tax obligations squared away is usually the last thing on your mind when you’re building a client’s house or fixing a drain pipe. Unfortunately, keeping your bookkeeping, tax, superannuation and BAS up to date is just as important as securing the scaffolding.
The team at Pop Business regularly work with SME operators who’ve missed a year’s lodgement or are trying to get an overdue tax return sorted. Don’t feel bad, it’s a problem that pops up across a wide range of industries but particularly with trade professions.
There’s some simple advice below for reducing the stress that comes with tidying up your tax affairs After all, who wants to spend their downtime crunching numbers on a tax return from two years ago?
Getting clear about the terms
First off, let’s clarify a few things. When we are talking about:
Overdue tax returns — We’re talking about your latest tax return and it’s overdue.
Missed lodgements — We mean a tax return from a previous year, or years, that didn’t get lodged.
Non-lodgement year — A year where your business revenue was under the threshold (currently $18,200) and you weren’t required to lodge a tax return — BUT you still need to send in a non-lodgement advice form.
Overdue tax returns
If your latest tax return is overdue, you need to get it lodged and confirmed as soon as possible. Depending on the size of your business, your tax liability and returns history, you could be liable for penalties from the ATO even if it’s only a few days late.
There’s a ton of reasons why you may have fallen behind on your returns but it’s important to remember that every situation can be sorted out with the taxation office.
Missed year lodgements
When a return is overdue for a few years, your reporting options change. You can submit a missed tax return or non-lodgement advice form by:
Online lodgement — From tax years 2016 onwards via the myGov portal.
Paper lodgement — For returns prior to 2016, you’ll need to fill out a paper form and post it to the ATO. The documents are available from the ATO website or you can make a phone call and have them post it to you.
Registered Tax Agent — Contact a Registered Tax Agent to review your financials, organise the correct forms and lodge any outstanding returns. They can also negotiate with the tax office and arrange payment plans or penalty reductions.
Registered Tax Agents are a great option as they can deal with the ATO more efficiently and make sure you are claiming all your deductions.
Overcoming late tax return stress
Overdue tax returns can cause a lot of stress which often perpetuates the problem of avoiding the paperwork.
Avoiding the accumulated penalties and interest is about finding a way forward. Because there’s always a way forward.
The most frequent problems we encounter with our clients are:
Problem: Bookkeeping overwhelm
Key causes: Your bookkeeping has fallen behind due to being time poor from work and family commitments.
The way forward: Reconcile your bank accounts, outstanding BAS and prepare your tax returns. Plus claim you ALL your deductions.
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Problem: Lost receipts and missing bank statements
What’s happening now: Paperwork has gone missing, has faded beyond legibility or is badly disorganised.
The way forward: Get a registered BAS Agent or Tax Accountant to examine your business expenses and help you retrieve those missing documents.
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Problem: Cash flow problems
What’s happening now: Unexpected expenses stacked up and tax money was used to pay them.
The way forward: Use a registered Tax Agent to negotiate a payment plan with the ATO to reduce your liability.
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Problem: Personal hardship
What’s happening now: Your business or personal affairs have been affected by bushfires, COVID-19, illness or injury.
The way forward: Use a registered Tax Agent to negotiate a reduction in penalties and payment plan with the ATO.
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Don’t leave it any longer
Take a step forward and get your books and tax returns up to date.
You can also get in touch with POP. We’re experienced tax professionals who assist SME operators overdue tax return with their accounting.
DID YOU KNOW?
POP offers a bulk discount when doing multiple years of tax at once? Enquire today to get affordable and quality tax services for your business.
Contact POP Business by clicking here.