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  • Tax Update

    17 January at 10:40 from atlas

    Minimum record-keeping requirements for small business

    Poor record keeping by small businesses - in particular the failure to correctly retain records of all sales - is a common deficiency we identify during our cash economy audits.

    As part of a cash economy audit, we ask small business taxpayers to provide all business sales records to determine if they are accurate and complete.

    Why keep records

    It is a legal requirement for businesses to keep records. They must be kept:

    • in English or in a form that we can readily access and use to work out the correct amount of tax you are liable to pay
    • for five years after they are prepared, obtained or the transactions are completed - whichever occurs latest.

    Keeping good records assists businesses to:

    • complete activity statements, tax returns and fringe benefits tax returns
    • provide written evidence of tax related transactions
    • resolve issues relating to disputed assessments or adjustments.

    If your business fails to keep proper records, the risk of not being able to substantiate your reported income is greater.

    Failure to keep accurate records to support reported income can result in administrative penalties being imposed by auditors, court imposed fines and default assessments being raised using a range of information available to us such as our small business benchmarks.

    Find out more

    Law Administration Practice Statement PS LA 2005/2 Penalty for failure to keep or retain records 

 

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Address 3/70 JELLICOE STREET
LIDCOMBE NSW
Australia
2141
Phone 0415234242
Fax 0295646489
Mobile 0415234242
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