This year we have had a record number of clients being audited. Our clients are not specifically being targeted, this is a trend that all Accountant’s Australia wide are noticing.
In particular we have seen a large volume of audits in relation to Self Managed Super Funds and Cash Based Businesses.
The tax office is now heavily reliant on the use of benchmarking. This is where the ATO compare your businesses income and expenses to the industry averages. If your cost of sales are 40% of sales and the industry average is 30% you will most likely be targeted for an ATO review. The ATO in some cases are asking for an explanation of why your costs are high and in some cases they are just assuming your income must be understated and are issuing amended assessments to include more taxable income.
To have any chance of disputing the tax office you must have accurate records. If your record keeping has been poor in the past now is the time to address this. Our staff can help you with advice on what records you need to keep. We can also assist you with all your book keeping needs.