Tax time is a stressful period for the business owners, and so most of them end up burying their head in the sand. As much as one tries to avoid the impending tax payments, it is inevitable. In Australia, the Australian Taxation Office (ATO) is the principal revenue collection agency, and it administers most taxes at the federal level while few taxes are state-based. Tax obligations for business toward ATO varies from business to business based on the parameters like nature of the business, industry, business type, total number of employees and the fringe benefits offered to employees etc. Following are all the taxes that can be applicable to your business –
- Income tax for business
- Capital gains tax (CGT)
- Fringe benefits tax (FBT)
- Pay as you go (PAYG) withholding
- Pay as you go (PAYG) instalments
- Goods and Services Tax (GST)
- Fuel tax credits
- Wine equalisation tax
- Luxury car tax
- Payroll tax
- Land tax
It is the duty of your accountant or virtual accountant to see which taxes are applicable to your business and take provisions for the same to avoid a hefty tax penalty. Your accountant also must claim for tax deductions on expenses which can reduce your taxable income. Income tax is lodge annually, and some business even needs to lodge business activity statements (BAS). The good part is you can lodge and pay all your tax online as ATO provides a range of online services for tax lodgement and payments.
Here are some ways to make ATO payment easier for you –
- Make use of accounting software which track and prepare BAS and GST like MYOB and Quickbooks.
- Try to use either card or net banking for all your transaction as it helps you to maintain a backup or reference in case of mixup or loss of invoice.
- While claiming for the deduction, make a logbook where you record all your deductible expenses. Please note that if the cost was incurred for both personal and business purpose, you could only claim a deduction for the expense on business related portion.
- Either make a prepayment or set separate account for BAS, GST, superannuation and income tax payments.
- Always make provision for future tax payments so you can plan to pay the right amount at the right time.
- Always make your payment by the first instalment due date. No point pushing for later instalment as the payment is meant to pay sooner or later.
- In case you are scheduling a payment, make sure to schedule it a few days before the due date so that there is no confusion at last minute.
- In case you are unable to pay on time, you can contact the ATO, but you need to lodge your BAS and tax return on time as it makes ATO understand that you are aware of your obligations.
Now that we know how we can make ATO payments easier, let us talk in details about the payment plan allowed by the ATO. ATO is quite supportive when it comes to payment and is ready to offer payment plans. So, when you can’t pay by the due date, you can set up a payment plan in instalments, but interest may accrue on the unpaid debt. You can set a payment plan by using ATO’s payment plan estimator that will calculate a plan that fits your budget. You can propose a payment plan by way of –
- Online Business Portal
- Through a registered tax agent or BAS agent
- Telephonic conversation with ATO’s automated phone service
ATO payments do not have to be stressful if everything is planned out nicely ahead of the timeline, it may be challenging to keep up with new updates or if you are too occupied with your core business activity. We suggest you hire a virtual accountant for online accounting services who will be well aware of the process of lodging, returns and payment of tax, and ATO payments will be no longer be stressful and hectic for you.