Talking Cents

Data Matching and the ATO from Small Business Accountant Sydney

As a small business owner in Sydney who is registered for GST and is required to lodge quarterly BAS’s, you would know that the due date for the July – September 2015 quarter BAS is due in one month on the 25th of November. Rather than rushing the lodgement of the BAS’s which has the potential to contain errors and possibly require amendments at a later stage, we suggest speaking with your small business accountant in Sydney sooner rather than later to finalise these, as the ATO has now started using data matching as a law enforcement tool to determine where small business owners are missing out on their obligations.

Data matching allows the ATO to determine which businesses are not lodging their tax returns & BAS statements. It can also determine whether the business owners have correctly declared their total income and have included only those expenses that they are eligible to claim. Any businesses operating outside the tax system or engaging in fraudulent practices are quickly and efficiently picked up by the data matching system.

The ATO receives data from a wide variety of sources which they use to build their information database for matching. In fact, some banks and health insurers have a legal obligation to provide information as requested by the ATO. More than 600 million transactions are reported to the ATO annually from businesses in all industries. Before matching the data, the ATO conducts integrity checks so that a business owner is not mistakenly accused of fraudulent behaviour.

Data matching was introduced as a way of increasing small business owner confidence in that they are allowed to claim as much as they are entitled to in GST or tax refunds, as long as these are within the legal limit. Honest businesses are protected from unfair competition and voluntary compliance is promoted across all industries. In case you think you have made a mistake in reporting your quarterly accounts, it is best to make a voluntary disclosure or get your returns amended by your accountant as early as possible and not wait until the data matching system catches you out. Penalties of up to $11,000 can apply and in some cases you may also be sentenced to up to two years in jail as a result of not complying with the law.

Speak to your accountant for small business accounting in Sydney today to learn more about data matching and how you can avoid the common pitfalls of incorrect reporting.