In the business and taxation domains, adherence to record-keeping rules and modifications to declaration requirements are integral aspects of effective corporate management. Accurate record-keeping not only facilitates smooth business operations but also provides robust support during tax audits. This article delves into record-keeping rules and intricately outlines the deadlines and requirements for modifying declaration forms, ensuring your company consistently maintains compliance in tax matters.
On this page:
What is a Record?
Five Rules for Record Keeping
The Amendment Period Requirement for Amending a Return.
The Amendment Requirement
Tax Return Time
Timeframe for Amending a Return
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I. What is a Record?
A record should elucidate transactions related to taxation and superannuation funds for the business. It must contain sufficient information for the Australian Taxation Office (ATO) to ascertain the essential features or purpose of the transactions, facilitating an understanding of their relevance to business income and expenses.
Records typically need to include basic information such as:
Transaction date, amount, and description (e.g., sales, purchases, wages, rent), along with Goods and Services Tax (GST) information.
Purpose of the transaction.
Relationships between parties involved in the transaction, if applicable.
II. Five Rules for Record Keeping
1. Keep all records related to starting, running, changing, and selling or closing your business: Ensure clear documents showing the business portion, especially expenses related to business and personal use.
2. Do not alter relevant information in records: Records must be stored in a way that protects information from changes or damage and allows reconstruction of original data if the record-keeping system changes.
3. Keep most records for 5 years: The 5-year retention period generally starts from the date of preparing or obtaining records or completing transactions or acts those records relate to.
Fringe Benefits Tax (FBT) Records:
Keep all records related to fringe benefits.
Show justification of claims for exemptions or concessions that reduce your FBT liability
Keep FBT records for five years from the date your FBT return was lodged
If you don't have to lodge, use the due date for lodgement of FBT returns, which is generally 21 May.
Employee Pension Contribution Records:
Factors that affect the amount of super you must contribute.
Salary sacrifice amounts.
If you fail to meet requirements, you must also keep details of how you worked out the amounts shown in your super guaranteed charge statement.
Records for Employee Choice of Superannuation Fund:
Salary and wages.
Bonuses.
Allowances or other kinds of payments, including tips and gratuities, termination payments, redundancy payments and leave payments.
Keep certain records for more than 5 years.
4. Be able to show records to the ATO as required: Ensure information about the record-keeping system is saved, meeting the ATO's record-keeping requirements.
5. Records must be in English or easily convertible to English.
III. The Amendment Period Requirement for Amending a Return.
Small businesses have a modification deadline of two years.
Medium businesses, for income years beginning on or after July 1, 2021, also have a two-year modification deadline.
Other taxpayers have a modification deadline of four years.
The calculation of this deadline starts from the day the ATO issues the taxation notice for the specific income year.
IV. The Amendment Requirement
Companies, Partnerships, Trusts, Superannuation Funds Other Than SMSF
SBR-enabled software.
Online services for business – lodge amendments.
Registered tax agents.
Letter.
Self-Managed Superannuation Funds (SMSFs):
Registered tax agents.
Online services for business – lodge amendments.
All amendments must be submitted as a new Self-managed superannuation fund annual return in full, not just cover the parts you want to change.
If your amendment is for the 2010–11 or earlier income years, you must use the paper return Self-managed superannuation fund annual return instructions (NAT 71606) form even if your agent lodged the original return online.
Registered Tax Agents on Behalf of Any Type of Taxpayer:
Online submission using SBR-enabled software – practitioner lodgement service
Online services for agents – mail function (excluding individuals)
Forms: Request for amendment of income tax return lodged by tax professionals
Letters.
V. Tax Return Time
Individuals and sole traders generally have a two-year window to submit tax return amendments, starting from the day of receiving the taxation notice.
VI. Timeframe for Amending a Return
While the deadline for filing modifications and objections is the same, in certain cases, an extension for filing objections can be requested. More than one modification application can be submitted within the review period.
Wis Australia
At Wis Australia, we are not just your accounting advisors but also professional navigators in financial management. We provide advanced consulting and accounting services, specializing in the intricate details of business record-keeping. Our professional team executes tasks efficiently, ensuring your financial data is meticulously organized. Choose Wis Australia for an outstanding financial partner and let us together lead your business to the pinnacle of success!