Receiving a letter from the ATO advising you that they are going to audit your business can be daunting and a little overwhelming. But it doesn’t have to be panic stations! If you have received a letter it is an official request to review your accounts and confirm that you are paying the correct taxes. But whilst you shouldn't panic, you do need to prepare.
Not all audits are the same, and if you have been paying your taxes on time it might be that they are just wanting to complete a spot check. You need to respond to them promptly, and they may only request that you answer some questions and provide your receipts. So make it a priority to get back to them and find out exactly what they require from you and when.
1. Be Helpful
Make sure you are co-operative throughout the process. If you behave in a way that could be considered defensive or unprofessional then you may find that you are investigated further and more probing questions are asked. So make sure you are professional, friendly and helpful during the audit. Remember if you haven’t done anything wrong then you don’t have anything to worry about. The auditors are just doing their job and we need to make that as easy and painless as possible for them.
You don’t have to do this alone. We recommend that you get in contact with your accountant as soon as you have received a letter and an audit has been scheduled. Your accountant will be experienced in this area and will be able to offer advice and support. If you have been doing your own books then we recommend that you find a tax accountant to help you get things in order and to have a look over your books before the auditors do, that way if there is anything missing you can show the ATO that you have been proactive.
3. Be Organised
The ATO will want to see copies of receipts and proof of write offs against the business. So make sure you have all of your paperwork in order and have copies of all receipts ready at hand. This will make sure that on the day of the audit everything runs smoothly. If your papers are in good order and you have provided everything they have asked for then chances are they will wrap things up.
4. Only provide what they ask for
The ATO are specific in what they require you to provide. Read that carefully and only provide what they ask for - nothing more or less. It will assist in making sure that the questions being asked are dealt with efficiently.
5. Pay Promptly
Hopefully everything is in order and there will be nothing further required after the audit. However, if the ATO discover that there are some additional taxes that need to be paid make sure you pay it promptly. If you can do this you will avoid any further penalties, interest or fees.
We understand that an audit can be a stressful time, so make sure you don’t do it alone. Get in contact and we can help you through the process.