Are you feeling paralysed, knowing you need to do something but not sure where to start? Do you shudder every time you get a letter from the tax office or dread the call?
There are many people that find themselves in this position, but instead of taking immediate action they begin to panic with a heavy feeling that doing nothing is only making the situation worse.
If this is you, the best course of action (and the biggest relief) is to remove yourself from this equation and engage a profession Tax Agent to get you up to date.
Here are the 2 most common outcomes after taking that step:
- If you are a wage and salary worker, you will likely be owed a refund.
- If you are a business, you may be pleasantly surprised that it’s “not as bad as you thought”.
Either way, you need to get on to it. The ATO have recently changed their audit activity profiling and are now focusing on tax payers who lodge and pay late as persons of interest.
Needless to say, it’s best to comply with your obligations and not become the focus of the ATO as someone who is not complying.
We can help. Our specialty is in assisting business owners.
As cloud and real time accountants with the technology available to us today, it is easy to get you up to date with the tax max and make sure that you stay up to date.
A few DO’s and 1 DON’T
- DO engage a Tax Agent to act on your behalf
- DO get the Tax Agent to Communicate with the ATO
- DON’T over commit or over promise – only commit to time frames and amounts that you know you can manage
- DO take the time to get the source data together and give it to your tax agent in the time frame promised
- DO ask your tax agent for a checklist so you are not looking for bits of paper that are available on the ATO Portal e.g. Dividend & Interest Income and Payment Summaries from 2007
- DO Take out a Xero or MYOB subscription and start bank feeds immediately
- DO Separate business and personal credit card and bank account usage to reduce bookkeeping e.g. Pay regular amount from the business account to the personal account and only use the business account for business transactions.
- DO the same with one of your credit cards if unable to get a debit card on the business account.
- DO enter into a payment plan with the ATO
- DO stick to the payment plan and make sure all future tax lodgments and payments are made on time
- DO take out Audit Insurance to cover the cost of professional fees for dealing with an audit
- DO get your tax agent to apply for a remission on interest and penalties when you are up to date with your lodgments and debt to the ATO.
How to make the problem go away in 4 action steps:
- Decide it is time to act
- Engage a Tax Agent
- Fully co-operate with you Tax Agent and supply all information requested in a timely manner
- Subscribe to Cloud accounting
In short, your best course of action in this situation is just that – Take Action. Don’t procrastinate, take control and let professionals take charge of the situation.
You need to remove the emotion out of this by engaging a tax professional. Continue dealing decisively with the situation by supplying the information requested in a prompt manner and this is the simple recipe that will make the problem go away.