Complying with tax laws - it's good business!
A recent Decision Impact Statement issued by the ATO on 1st November involves the case of a taxpayer who claimed not to be involved in the business of share trading for the financial year ended 30 June 2008. The ATO turned down the taxpayers claim that the taxpayer was not involved in the business of share trading based on the facts of the case.
The decision of the tribunal was based on a number of points of evidence including the fact that the applicant regarded the share trading as a serious business, the amount of capital involved, the regularity of share trades and the fact that a clear system was used by the taxpayer to make this operation profitable.
What this case demonstrates is that it is much better to comply with the tax laws and then deal with the taxation implications rather than trying to hide or manipulate information for personal gain. The ATO now has serious resources at its disposal thanks to several recent budget increases, and it simply does not pay to take this path, and never has!
The essence of a good accountant, focusing on small or big business, is that they will always advise you to take the proper path when dealing with the ATO and I strongly advise all small business owners as well as those involved in investment activities to ensure that your business accountant has strong ethics and knows as much detail as possible about you and your business so that they can dispense proper advise to you.