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Managing business cash flow

The ATO has issued a reminder to businesses that paying regular attention to their record-keeping and reporting tasks will help them better manage their cash flow and allow them to plan for the future.

The best way to make sure a business has enough cash available to meet its tax and other obligations is to do a cash flow budget or projection.  This information will help the business to:

  • see its likely cash position at any time;
  • identify any fluctuations that may lead to potential cash shortages;
  • plan for tax payments;
  • plan for any major expenses; and
  • provide lenders with information.

Accounting for income and expenses can help keep a business running smoothly — by giving it an overview of when it can expect money to come in and when it may go out, and highlighting where the business may need to direct its money.

The ATO provides resources about record keeping for business, and there is also information on business.gov.au regarding how to create a budget, and how to improve a business’s financial position.

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Beware of scams

Scamwatch is warning that scams cost Australian consumers, businesses and the economy hundreds of millions of dollars each year and cause serious emotional harm to victims and their families.

Cryptocurrency scams are the most ‘popular’ type of investment scams, representing over 50% of losses.  Often the initial investment amount is low (between $250 and $500), but the scammers pressure the person to invest more over time before claiming the money is gone or ceasing communication and blocking access to the funds.

All age groups are losing money to investment scams, but the over-65s have lost the most, with $24 million lost this year.

Some simple steps individuals can take to protect themselves (and their businesses) are:

  • Never give any personal information to someone who has contacted you.
  • Hang up and verify the identity of the person contacting you by calling the relevant organisation directly — find them through an independent source such as a phone book, past bill or online search.
  • Do not click on hyperlinks in text/social media messages or emails, even if it appears to come from a trusted source.
  • Go directly to a website through a browser (e.g., to reach the MyGov website, type ‘my.gov.au’ into the browser).
  • Search for reviews before purchasing from unfamiliar online traders.
  • Be wary of sellers requesting unusual payment methods.
  • Verify any request to change bank details by contacting the supplier directly.
  • Consider a multi-factor approval process for transactions over a certain dollar amount.
  • Never provide a stranger remote access to your computer, even if they claim to be from a telco company such as Telstra.

Editor: Feel free to contact our office if you need any help at all with this or anything else.

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Lost, damaged or destroyed tax records

The ATO knows that many taxpayers are facing lasting impacts left in the wake of natural disasters, so if they find their records have been lost or destroyed, whether in cyclones, floods or bushfires, the ATO can help.  According to ATO Assistant Commissioner Tim Loh:

“If you have a myGov account linked to the ATO, you’ll be able to view some of your records, including income tax returns, income statements and previous notices of assessments.  If you lodge through a registered tax agent, they can also access these documents on your behalf.”

Government agencies, private health funds, financial institutions and businesses provide information to the ATO which is available to tax agents and automatically included in returns by the end of July.

If taxpayers have lost receipts due to a natural disaster, the ATO can accept reasonable claims without evidence, so long as it’s not reasonably possible to access the original documents (although the taxpayer may be required to tell the ATO how they calculated the claim).

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Scammers impersonating tax agents

The ATO has received increasing reports of a new take on the ‘fake tax debt’ scam, whereby scammers are now impersonating registered tax agents to lend legitimacy to their phone call.

The fraudsters do this by coercing the victim into revealing their agent’s name and then initiating a three-way phone conversation between the scammer, the victim, and another scammer impersonating the victim’s registered tax agent or someone from the agent’s practice.

As the phone conversations with the scammers appeared legitimate and the victims trusted the advice of the scammer ‘tax agent’, victims have been falling for this new approach.

In a recent example, a victim withdrew thousands of dollars in cash and deposited it into a Bitcoin ATM, fearing that police had a warrant out for their arrest.

The ATO is reminding taxpayers that they will never:

  • demand immediate payments;
  • threaten them with arrest; or
  • request payment by unusual means, such as iTunes vouchers, store gift cards or Bitcoin cryptocurrency.

 

Taxpayers are advised that if they are suspicious about a phone call from someone claiming to be the ATO, then they should disconnect and call the ATO or their tax agent to confirm the status of their tax affairs and verify the call.

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