The Tax Office’s benchmarks are becoming increasingly sophisticated, according to director at LMS Advisory Alexander Laureti.
This is due to the volume of data the ATO has access to, plus the sophistication of its data matching and analysis tools.
Straying from small business benchmarks is not problematic in itself, but for Mr Laureti, it means ensuring you’ve got solid evidence of why that’s the case.
“Normally, people are trading outside of the norms if they’re not doing everything above board,” Mr Laureti said.
“Most industries do have benchmarks that are reviewed on an annual basis and that happens at the time of lodging business activity statements, but also when you do lodge your annual tax return as well. It’s all compared and cross-checked.
“If your business activity statements don’t reflect your tax lodgements as well and there [are] discrepancies, that’s another reason for a red flag to be created.”
Mr Laureti discussed this and more on a podcast with sister title My Business which you can access here.
The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day