Many small businesses fail each year simply because they don’t plan or dedicate enough time to taking care of their taxation responsibilities.
Bad habits, such as putting obligations like GST, payroll tax and super guarantee contributions on hold are often the biggest contributors to a business’s financial downfall.
Below are three common tax mistakes that can limit a business’s chance of success that should be avoided at all costs:
Failing to keep good records
Keeping good records increases the chances of maintaining good business. Neglecting to record or keep track of business costs and therefore, relying on estimations means it is more likely a business will miss out on valuable tax claims.
Not paying the superannuation guarantee
Businesses who want to avoid harsh penalties from the ATO must ensure that their employees are paid superannuation when it needs to be paid. Unfortunately, many businesses put off making superannuation guarantee payments when cash flow becomes an issue.
Not keeping track of tax law changes
Not following tax law closely means a business is more than likely to miss important changes that affect them. Changes to payroll tax rates, for example, are important for business owners to be aware of since they may need to withhold more to cover any rate increases. Failure to keep correct books usually results in hefty tax fines.