ATO Flags Reporting Errors 

The Australian Taxation Office (ATO) has identified a trend of non-compliance among businesses with an annual turnover above $1 million, particularly in how income, deductions, and offsets are being reported. 

Common errors include:

  * Incorrect claims for the R&D tax incentive (R&DTI), especially for activities that don't meet the eligibility criteria

  * Omitting sales and income in the BAS and tax returns, including income from related entities

  * Overclaiming expenses and GST credits

  * Private expenses incorrectly reported as business-related, or not properly apportioned between business and personal use

  * Failure to register for GST when required

  * Not seeking independent advice from a registered tax agent, particularly in head contractor and subcontractor arrangements. 

The ATO has provided guidance to help businesses improve the accuracy of their financial reporting and avoid common compliance issues. 

While recent findings focus on businesses with an annual turnover above $1 million, all business owners should understand how to correctly report income, expenses, and deductions to stay compliant. 

Click here to find out more.