ATO Assistant Commissioner Andrew Watson has expressed that the ATO understands salon owners are facing uncertain times and may be feeling anxious about meeting their tax commitments.
“We understand your tax obligations may not be at the top of your list of things to do. So if you need some extra help with your tax and super affairs, I urge you to contact your registered tax professional or the ATO. We’re here to help,” Mr Watson said.
He encouraged salon owners not to delay contacting the ATO if they find themselves inn a difficult position. “If you’re feeling overwhelmed or getting behind with your tax, let us know as early as possible so we can work with you to find a solution. No matter what your situation is, it’s never too late to ask for help.”
The ATO predicts that in 2019–20 and 2020–21, a number of businesses that would ordinarily be turning a profit may be making a loss due to COVID-19, possibly for the first time.
“If you find yourself in this boat, you may be able to claim a deduction for the loss. It’s crucial that you keep proper records to ensure you can claim the deduction you’re entitled to,” Mr Watson said.
“You’ll need to keep records for five years for most transactions. However, if you fully deduct a tax loss in a single income year, you only need to keep records for four years from that income year,” Mr Watson said.
Mr Watson also acknowledged that some salon owners may need to close their doors – either temporarily or permanently – due to COVID-19, predominantly in Victoria.
“If you have to close your business permanently as a result of COVID19 or for any other reason, there’s a few things you’ll need to do, like lodge any outstanding activity statements and instalment notices, make GST adjustments on your final activity statement and lodge final tax returns – so we can finalise your account and issue any refunds that might be owed to you. After you’ve finalised your tax affairs, don’t forget to cancel your ABN, and GST registration if you have one. If you need help doing this, ask your registered tax professional or call us,” Mr Watson said.
Businesses that are closing temporarily are encouraged to do their best to keep up with tax and super obligations, and to reach out to the ATO on 1800 806 218 or contact their registered tax professional if they need additional time or support.
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