✦ Be boring and potentially have the Tax Office subsidise the use of a boat*
Has Clarkie flipped his lid? Is this the result of tax returns and bookkeeping?
What do I mean?
A selection of examples I have come across recently in various forums include:
a. A company with 8 years of Business Activity Statements and Tax Returns outstanding used 3 accounting systems, did no bank reconciliations, ATO chasing lodgements. A very successful business, but management time now preoccupied with finding and getting the paperwork together.
b. A company which has paid its employees superannuation, but the company’s balance sheet is showing a very large outstanding liability which has built up over several years because the payments to the super funds have been incorrectly allocated. Accountant is not willing to do the 2022 tax return until this is sorted out.
c. A company which has its tax return overdue, but needs financial information produced urgently to a licensing authority in Queensland to be able to maintain its building licences.
In all these cases the businesses are successful, but they have let their administration slip.
What are the risks?
a. Non lodgement – ATO can issue directors’ penalty notices making the directors personally liable for tax debts and for non payment of superannuation
b. In the third case, the company might have to cease trading until its financials can get prepared
c. In all cases stress, anxiety, management time that would otherwise have been focussed on growing the business
Bungee Jumping
If you’re an adrenalin seeker, bungee jumping is much safer than putting your business at risk by avoiding the boring tasks that need to be done.
Compliance issues to focus on
* Company Directors (including directors of trustee companies of Self Managed Superannuation Funds) – make sure you have a Director’s ID. Email me john.clarke@stptax.com if you need to know the process.
* Am I paying my superannuation obligations on time?
* Am I lodging and paying the PAYG and BAS?
* Do I have adequate insurance?
Staying on track or getting back on track
Your accountant or bookkeeper can help you stay on track or get back onto track if you’ve become overwhelmed.
2023
Make 2023 the year to get on top of your business. A 1% improvement each day means your business will be 37 times better after 12 months.
Why wait until the beginning of 2023. Starting 14 days earlier will give you a 43 times improvement by the end of 2023.
What are the issues holding you back?
Is it being able to pay your bills when they are due for payment? Has the amount of money owing to you increased?
Rewards
* Depending on your business structure your extra profits might let your use of a boat be subsidised by the Taxation Office.
Ask John Clarke, Success Tax Professionals
a/ 5/124 Horton Street, Port Macquarie, NSW 2444, Australia
t/ 0481 039 851
As always, the advice given is general in nature and you should seek professional advice from your adviser relating to your circumstances.
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