Lowering tax audit compliance risk for small businesses

Are you running a small business, and have a Point of Sales System or POS and always rely on it to record the sale? Please read on, as the law has changed for the point of sales system, and if you are not careful, your business might be caught with a potential serious tax audit from ATO.

tax audit ato

We can help you with the tax audit

It has been illegal from 03 October 2018 to produce, supply, use, and possess electronic sales suppression tools (ESSTs) since the first introduction of the Treasury Laws Amendment (Black Economy Taskforce Measures No.1) Bill 2018 on 7 February 2018 (ATO), finally had passed on 18 September 2018 (Act 121, 2018).

The proposal is to “clean business” and “promote good tax behaviors” from the establishment of the Black Economy Taskforce development by the Turnbull Government (The Treasury) to commit $32 billion in funding from ATO to extend audit and compliance it the Budget 2017.

The Government is giving the small business people a concessional date of 3 April 2019 to come forward and disclose to ATO if they use such sales suppression POS machines, if you do that, you only need to pay the shortfall tax, and not pay the penalty. However, there are some conditions you need to meet for that concession to apply, hence please talk to one of the most trusted professional and responsive accountants and tax agents in Ashfield Sydney at 0410-829-900, or email John at Jc@endurego.com.

Schedule 1 of the Amendment in Subdivision BAA states that ESSTs means a device, software program, or anything, a part of such thing, or a combination of any such things or parts, that meet the following conditions:

(a) It is capable of falsifying, manipulating, hiding, obfuscating, destroying, or preventing the creation of a record that: (i) an entity is required by a taxation law to keep or make; and (ii) is, or would be, created by a system that includes an electronic point of sale system; (b) a reasonable person would conclude that one of its principal functions is to falsify, hide, obfuscate, destroy, or prevent the creations of, such records.

The offenses imposed on sales suppression technology and software that allow businesses to manipulate and destroy selected transactions to understate their income can be capped at 5000 penalty units ($1 million) for producing, supplying, possessing, using, or selling EESTs.

This amendment raises a serious concern for taxpayers who are using POS in daily business transactions and wonder if they are at risk relating to these changes.

As one of the most trusted accountants and tax agents in Ashfield Sydney, we are here to help you to review your business in terms of the potential audit risk and how is your business dealing with the risks.

To protect your business from Audit risk from the ATO, please come and talk to one of the most trusted accountants and tax agents in Ashfield Sydney, we will help you with the audit risk by providing a free 20minutes initial consultation to look at your past tax return and financial statement to give you an overview of your position in term of the audit risk and we will also during these 15minutes provide some recommendation to mitigate the risks. Please give us a call at 0410-829-900 or email me at jc@endurego.com. Please remember not to leave it too late.