10 Years of Overdue Tax Returns

I want to share a story with you. A story about Julie. Recently we met with Julie (not her real name), Julie had a problem, the last tax return Julie lodged was in 2007. Julie was a full-time employee in the medical industry working as semi-professional.

The ATO had sent Julie several letters including "Warning Failure to Lodge", "Lodge Immediately to Avoid Penalties and Audit", "Final Warning - Lodge Now". Julie was very anxious as she had not lodged a tax return for 10 years. She was worried, she thought she may go to jail, She thought she may owe the ATO thousands of dollars, have penalties and interest to pay, and this was just the start of her worry. You see, Julie wanted to get her 10 years of tax returns lodged, but she didn't have all of Individual Payment Summaries plus she had changed employment a couple of times.

It was at this point Julie sought professional tax advice for her 10 years of overdue tax lodgements.

When we met with Julie, we assessed her situation and downloaded her ATO Pre-Filling Report file going back to 2007. ATO Pre-filling reports are the ATO's record of what income tax payers have earned from employment, investments and includes Private Health Insurance Details. What this meant for Julie was no need to request archived copies of payment summaries from her previous employers and we could get straight to work.

Our role as Tax Agents provides us the authority to represent Julie to the ATO. We immediately called the ATO and explained her situation and that she had put her hand up and has sought professional tax advice. We advised of an expected lodgement date and worked hard to make sure we met this deadline and filed the 10 years of overdue tax returns. Identifying opportunities to maximise her deductions.

When lodgement was made, the ATO applied Failure to Lodge Penalties totalling $8500. Due to our clear communication with the ATO, setting expectations and meeting those expectations we were successful in having the penalties remitted in full. $0.

Tax Result. Julie received a tax refund of $13,700.

This is a typical situation with a typical outcome we see when resolving the tax rescue jobs. Although we cannot guarantee your results without understanding all of your circumstances, we can professionally attend to the problem, take the worry away and probably achieve the best result for you from a bad situation. 

 

The result. Julie received a tax refund of $18,500. The ATO applied Failure To Lodge Penalties of   

Canny Warehouse Party 2016

Canny Warehouse Party 2016

I was pleased be involved in a fundraiser for cervical cancer at the annual Canny Warehouse party on the night we raised $1220 for cervical cancer research. 

 

 

Always-Up-To-Date Bookkeeping

Always-Up-To-Date Bookkeeping

Business owners for years have been frustrated with bookkeeping. One of their main reasons for their concern is that it is historical. Imagine sitting down at the end of the month and entering in all the historical transactions from the month just ended. Boring! No wonder, business owners are entrepreneurs they are the one's looking forward, bookkeeping by its very nature is the polar opposite to their values.

Surely there is a better way. At Next Level Accountants we have developed ways to automate keeping the books up to date. In 2016 there is no excuse for any business not be outsource and automate their book work.

At Next Level Accountants our proprietary 'Always-Up-To-Date' accounting platform uses technology so your business can make smarter decisions. Using optical recognition technology and Xero we can deliver accounts that are always up to date. Its bookkeeping in the cloud. Best of all your financial administration time can be reduced by around 80% plus the certainty of fixed price service.

In 2016 make your resolution this year to get this element of your business working - seamlessly. This is what the best businesses do they get things working. It's simple, straightforward and low cost.

Here are my 5 tips to streamline your bookkeeping:

  1. Connect all your business systems and have your file always up to date
  2. Do bank reconciliations as often as possible, we do it weekly - this will give you cashflow in real-time
  3. Make sure your accountant has access so they can provide real-time advice
  4. Use online invoicing to get paid faster
  5. Use Xero to connect to your bank account to eliminate errors and time consuming data entry

 

 

New Year Resolutions for Small Business

For most small business owners the end of year / new year break is the perfect opportunity to get some work done on your business - to improve it! Here are my top new year resolutions for your business...

Core Business Functions

Let's face it all businesses make money by delivering their core offering to customers. If your business is an RTO you make money by training people, if your enterprise is a real estate agency you make money on the rent role and by selling houses, if you are a in the medical profession it's the advice you provide. So it makes sense to invest in improving your core business functions and outsource the rest. Your non-core business functions are best handled by businesses that deliver a specialised service in your non-core areas.

Completely Overhaul your Bookkeeping

Its 2016 people! We are not living in the 90's. There is absolutely no excuse not to streamline and automate you bookkeeping processes. Make this part of you business hum. The technologies in 2016 mean that the days of time spent entering data and reconciling supplier statements is over. Bookkeeping can be easy and it can almost run itself. Find a progressive firm and talk to them about their solution for your business.

Document a 12 Month Plan

Take the time to plan your financial budget for the calendar year. Look at your revenue for each month and plan your major expenses such as occupancy, staffing, motor vehicles, telephones and IT. Enter your budget into your Xero software and each month end review budget to actual. The other thing about having a business budget is that it tightens the purse strings on discretionary business expenditure and makes you focus on getting a good ROI on any expense items.

Understand Your Cashflow

Many business owners make the mistake of assuming success is on the profit and loss. Earth to Tom reality check here, strip the P&L back to a cash P&L and that's the cold hard cash that your business has earned or lost. A Virtual CFO service backed up by automated and up to date bookkeeping can highlight your business cash flow trends and allow you to better plan major expense items and keep control of the most precious resource - cash.

Hire Quality Talent

Face facts the best businesses have the best people. Make sure your business gets the best people. Hire a quality manager, the best sales people, the best designers, the best chefs. They don't all have to be expensive hires they could be graduates who are smart, intelligent and demonstrate initiative. Look at their academic results and attitude as key indicators of their potential. Just make sure you have the right mix of experience in the firm to develop them.

Training your People

Invest in the development of you staff. Train them properly in both the hard technical skills and the softer people skills. This will be a benefit to both your staff and your customers and as a business owner you get 10 points for good karma.

Upgrade your CRM System

Every small business needs a CRM system. They keep you connected with you customers and allow you to communicate to customers about new products and services. Many of the cloud based CRM systems link in with Xero accounting software which means that it seamlessly syncs and helps your business improve its marketing sales and service.

Stay Focussed

Ignore the noise and keep to the plan. Having a clear plan of what you are trying to achieve means that you are less likely to get distracted, anything that's not on plan is ignored or minimised.

What About Me

Schedule the important things in your life into your diary, whether its a lesson in golf or swimming or being there for the key events to your family, such as the dance recital or school swimming carnival. You need to keep investing in the things that are important so that you can keep showing up and leading your organisation.


 

 

 

The Australian Taxation Office Can Garnishee Business Bank Accounts

An application to reduce debt is a legal procedure by which a creditor can collect what a debtor owes by reaching the debtor’s property when it is in the hands of someone other than the debtor, such as rental bond’s refunds or financial institution accounts. The Commissioner of Taxation can recover outstanding debts through the issuing of a garnishee.

The Australian Taxation Office (ATO) can issue a garnishee notice to any financial institution that holds money for a business, and banks are legally required to make payments directly to the ATO. Mr. Cliff Sanderson, at Dissolve Company, says that between January and November 2012, 9,178 companies went into bankruptcy and the driver of a lot of small liquidations is the Australian tax office. He added that the situation was going to continue.

Before the Global Financial Crisis, the ATO was lenient to businesses, but now they are demanding payments. In 2009, the Australian Taxation Office helped businesses with deferred payments, interest-free payments and more flexible repayment schemes. According to ATO data, as of the end of June 2012, 41,830 payment arrangements were in place. The ATO schemes ended, and smaller businesses may find it hard to make tax payments.

Businesses are expected to pay tax, or action will be taken by the commissioner. The commissioner can issue a garnishment to the bank and also prevent the business owner from leaving the country. A freezing order can be placed on a business bank account. The ATO can also force a business to sell certain assets by a warrant of execution. The tax office closed 1,066 cases during the last financial year. The ATO said it is important to prevent further debt being incurred to the tax office and other parties.

The Commissioner of Taxation can recover outstanding debts on business bank accounts through the issuing of a garnishment, and banks are legally required to make payments directly to the ATO. The debt may be recovered from a business bank account by legal proceedings, or a further garnishee order with penalty interest added.

A transaction account is very advantageous because it can just be used or withdrawn by the owner at any given time, so this is great in terms of finance management. http://www.ratechoice.net/transaction-accounts.html