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How to Simplify Your Business’ Tax and Compliance

No matter what business you run, being an entrepreneur can be challenging, exciting, daunting, and even overwhelming at times – and that’s just in day-to-day operations, let alone the tax and compliance requirements required to keep everything above board. The shifting landscape of tax and compliance legislation can make it tricky to stay on top of things in your business, but there are a few ways to stay off the ATO’s radar without the headaches.

Understand Your Business’ Tax and Compliance Obligations

It makes sense that to be fully compliant with tax legislation, you’ll need to understand what’s required of your business. Here are a few key ones to look out for.

• TFNs and ABNs: All businesses, regardless of their structure, must have a Tax File Number (TFN). Sole traders use their individual TFN for their business; while those operating as a company, trust or partnership will need to register a separate TFN for the relevant entity. All businesses must also have an Australian Business Number (ABN) in order to undertake business operations.
• Paying Wages: Those paying wages or salaries must register for Pay as You Go (PAYG) withholding, and also understand their Superannuation Guarantee (SG) obligations. It is important to note that SG payment amounts have increased in the past few years (11.5% as of the 2024-25 financial year), increasing gradually each year until it reaches 12% in July 2025.
• GST: You must register your business for GST:
  • When it reaches a GST turnover (gross income from all businesses minus GST) of $75,000 or more (the GST threshold). Here’s how to calculate that.
  • When you start a new business and expect your turnover to reach the GST threshold (or more) in the first year of operation
  • If you’re already in business and have reached the GST threshold
  • If your non-profit organisation has a GST turnover of $150,000 per year or more
  • When you provide taxi or limousine travel for passengers (including ride-sourcing) regardless of your GST turnover – this applies to both owner-drivers and if you lease or rent a taxi
  • If you want to claim fuel tax credits for your business or enterprise.

Maintain Regular and Thorough Records

Getting lost in the busy daily routine means many business owners find it hard to maintain their records and paperwork that they’ll need come tax time. These can include invoices & receipts, statements, logbooks and more. Letting this slide can make tax time more stressful than it needs to be. Avoiding the hassle is easy to do if you maintain your records well throughout the year.

The development of logbook apps and services such as Dext make it easy to record and store your important business documents electronically, rather than needing to painstakingly sort through piles of paper. The integration of these apps with cloud accounting software further speeds up the processing of things like receipts so your deductions are not only easier to make, but also more accurate (more on that later).

Maintain a Separate Business Bank Account

Having a business bank account isn’t a requirement if you’re a sole trader – but it often makes life easier. Tracking and controlling income and expenses is where some great time savings can be found, and maintaining a separation between your business and personal finances makes the right financial records and information at tax time much more accessible. Also, with the increasing number of apps and software that can link directly to a bank account (e.g. Xero bank feeds), having a separate business account can substantially scale up efficiencies.

Know What Deductions You Can Claim

Like all taxpayers, business owners seek to legally minimise their tax obligations and maximise their deductions. However, many have come under scrutiny from the Australian Taxation Office (ATO) if they make dubious tax claims – irrespective of the intention. What’s more, the ATO’s increased data-matching programs and capabilities means it is even more likely that they will identify any non-compliance. This reinforces the importance of ensuring that records are up to date and the business is tax-compliant, and also highlights the need for business owners to stay on top of what they are legally allowed to claim a deduction for, and the various limits and conditions around those. The last thing you need in your business is for the ATO to conduct an audit – see more about how you can mitigate that in our latest Audit Insurance article.

See the Experts at McKinley Plowman

Perhaps the easiest way to simplify your business’ tax and compliance is to leave it to the experts. Working with an accountant or bookkeeper ensures that someone with up-to-date, practical knowledge of the complex Australian taxation system is taking care of your tax obligations. The CFO2Go and Accounting teams at McKinley Plowman have established a reputation for providing excellent service, offering industry-leading knowledge and advice, and transforming the operations of countless businesses.

If you’re ready to take your business to the next level, contact McKinley Plowman today on 08 9301 2200 (Joondalup), 9325 2411 (Perth), or book your free initial consultation via our website.

written by:

Mark Crowther