Starting a business in Brisbane offers numerous opportunities, but one needs to bear in mind the responsibility to fulfil tax requirements according to Australian laws. Dealing with taxes in Australia may prove challenging even for local entrepreneurs, who need to remain compliant in order not to offend the Australian Taxation Office.

However, one should understand the most common mistakes that can occur in this process in order to secure their finances for the future. Let us look into frequent tax mistakes made by Brisbane businesses and learn how to avoid them.

GST Issues

A lot of entrepreneurs in the process of growing their businesses do not consider themselves obliged to register for the Goods and Services Tax (GST). One needs to register for the GST tax upon reaching certain levels of annual turnover in Brisbane. Failure to register is punished heavily. In addition, incorrect reporting of this type of tax in Business Activity Statements (BAS) is a common problem that can occur to those who wrongly claim credits on their purchases. Therefore, you should pay attention to the correct calculation of this tax with the help of a local tax accountant in Brisbane.

Misclassification of Employees

Nowadays, people work differently, including through independent contractors. Many Brisbane employers misclassify workers to avoid paying superannuation and payroll tax. Such a misclassification can lead to serious penalties since the Australian Taxation Office takes such actions very seriously. This misclassification is based on control that an employer has over employees, ways of payment, and whether the equipment is provided or not. Therefore, you should regularly classify workers as per government rules.

Poor Record Keeping

Shoeboxes with receipts will not be enough during an audit. This practice makes a serious challenge for local businesses, as poor record keeping will not allow you to declare certain deductions or show their income. Under the laws of Australia, entrepreneurs need to store specific documents for at least five years. In order to stay within this law, you need to switch to modern and reliable accounting software. This program will automatically record all income and expenses for each tax year.

Lack of Knowledge about Deductions

You might be paying too much if you are too wary and neglect to declare certain expenses. On the other hand, you can be charged if you try to deduct unnecessary things for business. It is important to be well acquainted with the list of items that one can and cannot deduce. You should log all possible expenditures, particularly vehicle-related expenses, because this information will be needed during an audit.

Late Lodgements and Payments

You should pay close attention to tax periods and avoid missing the deadlines as far as possible. You can face penalties for not lodging and not making tax payment on time. The inability to pay due to cash flow problems can bring even greater problems if one postpones the matter for later. Instead, submit relevant papers on time and arrange a payment schedule.

Financial Security for Entrepreneurs

As we see, you can take care of one’s financial situation by learning some basic facts. Making some simple calculations and consulting a local specialist regarding the issues of tax declaration and payment, Brisbane businesspeople will be able to run their business without any fear of financial losses. Contact a professional now!