Preparing for the second half of the financial year

Businesses should start reviewing whether their accounting systems are keeping track of all revenue and expenses, together with any private use of business assets.

Planning ahead can save significant tax penalties, which start at 25 per cent of the unpaid tax to as high as 75 per cent.

There are a few key areas business owners should focus on.

–       Go through each employee and check whether contractors are actually employees, as the ATO has flagged this as an issue they will be cracking down on.

–       Look at whether any new business equipment needs to be bought in order to take advantage of the new $6,500 instant write off.

–       Review quarterly PAYG instalments. If profit is down considerably from last year businesses may wish to reduce their instalments.

–       Businesses may also wish to review personal loan agreements and trust deeds to make sure they comply with the law and that company distributions to owners are properly treated for tax purposes.