The Australian Taxation Office (ATO) is responsible to the government and the community for collecting the revenue and ensuring that everyone pays the correct amount of tax. A tax enquiry or audit is an examination of your tax affairs by the ATO to see if you have done what you are required to do under the tax laws, including:
• declaring all the assessable income you receive
• if you are entitled to the deductions and tax offsets you have claimed on your tax return.
The ATO assumes that the taxpayer has honestly declared all their earnings in their Tax Return.
The enquiries or audits the ATO conducts vary in their complexity. At times the audits only involve a phone call or a letter asking the taxpayer to provide further information or verify their claims. In some cases a tax officer may visit the taxpayer. In some cases the taxpayer may be asked to bring all their records for examination.
The ATO sometimes decides to look more closely at tax returns making similar claims, or from within the same industry and can request the records and paperwork taxpayers use to complete their tax return.
Tax Audits that a business may be subjected to include:
• CGT Audit
Capital Gains Tax (CGT) is a tax paid on any capital gain that is made in a given financial year. This can include the sale of property, shares or managed fund investments. It is not a separate tax, but rather forms part of your income tax liability.
• Goods and Services Tax (GST) Audit
Goods and Services Tax (GST) is payable on the supply of most goods and services in Australia (as well as some other specific items). Due to its complex nature, the tax office often conducts GST Audits to ensure that taxpayers and business owners are adhering to their legal obligations and operating fairly within the system.
• PAYG Audit
PAYG witholdings is a system for paying amounts towards your expected end of year income tax liability. The tax office often conducts PAYG Audits to ensure that taxpayers are compliant with their legal obligations and are conducting their business fairly within the tax system.
• Company Tax (PAYG I) Audit
Company Tax is payable by businesses on the amount of income it has generated in a given financial year. The tax office conducts Company Tax Audits to ensure that business owners are compliant with their legal obligations and are conducting their business fairly within the tax system.
• Payroll Tax Audits
A businesses liability for payroll tax is outlined in the Payroll Tax Act 2007 (NSW). As it is a state tax it is regulated and collected by the NSW Office of State Revenue (OSR) and not the Australian Tax Office (ATO).
• Land Tax Audits
Land Tax is a State based tax payable on land owned in NSW. Generally this does not apply to a principle place of residence so is more for things such as investment properties and holiday houses.
Here at the Quinn Group, our dedicated team of Tax Accountants and Tax Agents can assist you with all your auditing needs. Call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment, alternatively you can submit an online enquiry.