Small business accounting - voluntary disclosure
Carrying on from last week's blog about the cash economy, thanks to so many of our daily transactions and records being stored online, it is now much easier for the ATO to catch out taxpayers that are doing the wrong thing. Quite often, the ATO is looking to catch out individuals that are under-declaring their income through illegal means.
Data matching now allows the ATO to contact and utilise records from the Office of State Revenue, the Roads and Traffic Authority and many other Government bodies.
The ATO now has a specific program to data match nationwide new vehicle registrations back to individual taxpayers and in doing so, can scope out potential audit targets. If an individual has purchased and registered a new vehicle that does not seem to match up to their reported taxable income, then chances are that person is going to be contacted by the ATO.
As always, voluntary disclosure can help to minimise any potential fines and penalties that the ATO may be looking to impose, therefore if you are ever caught in such a situation, and I hope this does not happen to you, then I strongly suggest that you keep a close relationship with your small business accountant who will be in the best place to assist you through the process to achieve the best possible outcome for yourself.