12 Apr Keeping correct tax records
By the end of this financial year, the number of ATO auditors working on cash economy cases will have almost doubled and more than 200,000 businesses would have been audited or reviewed. The main issue that is uncovered during these audits continues to be inadequate record keeping practices. Many businesses do not record all their sale transactions and the ATO wants to reinforce that these types of practices are unacceptable and that businesses are legally required to keep records explaining all their transactions. Where businesses do not keep records to support their reported income, the ATO may use small business benchmarks to calculate default assessments. Businesses may also incur penalties for failing to either maintain correct records or keeping them for five years.