This month, the Australian Tax Office (ATO) has published a warning to tax practitioners to ensure their reporting of client income to claim the small business income tax offset is entered correctly after mistakes have been found.

The small business income tax offset can help small business clients reduce the tax they pay on business income by up to $1,000 per year, per person. This offset has been available from the 2015-16 income year, and from the 2016-17 income year small businesses with an aggregated turnover less than $5 million were granted access to the concession.

The ATO has noted some common errors by tax practitioners and given guidance on the specific categories the differently types of income should be reported. It also includes a reminder that certain types of income are not eligible for the offset such as salary, wages, or directors fees; and dividend income of directors.

The ATO has been increasing its scrutiny of small businesses who claim excessive and incorrect deductions. A small mistake can and will attract the attention of the ATO so to avoid an audit it is advisable to engage with a professional tax accountant. As this warning highlights, even the tax professionals are under the ATO’s watchful eye so ensure your accountant is registered!

Taxpro’s accountants are members of the Institute of Public Accountants and hold a public practice certificate. With a combined 40 years of tax experience, we know the law and what you are entitled to. We also have many years’ experience working with small businesses, after all we are one! And importantly, we pride ourselves on the amount of referrals we have.

Taxpro accountants are friendly, approachable and explain even the trickiest tax lingo in plain Australian. Talk to us today and don’t get caught out by the ATO.

For more information on setting up a business for tax purposes click here.

For more information on what motor vehicle claims you can make click here.