How does your small business compare with those like yours?

The ATO can see from your Industry Benchmarks if you might be participating in the Black Economy, and there is no time limit on how far they can go back if they suspect tax fraud or tax evasion. The ATO can audit you at any time. For example, the ATO can audit your tax affairs for the 2010 financial year in the 2020 financial year.

If you are not running all your income legitimately through your business BUT claiming for the expense, it will put your ratios out. On the sale of a business, a buyer may need a bank loan, the bank needs to see if the business can make the loan repayments before they will provide the lender money. You decide you want to sell your business, you start declaring income legitimately to help obtain the best possible sale price, usually by a buyer requiring a loan. Now you are providing the ATO information to compare prior year trading, and your figures ring alarm bells of internal audit inside the ATO. Be honest from the beginning; you lie, you lie to yourself. There are legitimate ways to increase your net income without being part of the Black Economy.

The Australian Taxation Office provides small business benchmarks which are financial ranges to help compare your business’s performance against other businesses in your industry in just 3 steps.

Check out the ATO Small Business Benchmarks on:

The ATO’s Small Business Benchmarks A-Z

If you find yourself in a position where you require the expertise of a great bookkeeper to ensure your financial records are accurately managed and compliant, don’t hesitate to reach out to us without delay. Our team is dedicated to providing top-notch bookkeeping services tailored to meet your specific needs and help you maintain financial clarity and peace of mind. Get in touch with us today to discuss how we can assist you in keeping your financial affairs in order and on track for success.