ATO issues lodgment tips for Next 5000 groups
The ATO has outlined tips and recommendations for Next 5,000 groups with company income tax returns following its recent review.
The Tax Office has highlighted important considerations for Next 5000 entities to think about when preparing their income tax return, following its Next 5000 findings report.
The ATO said entities should consider including a lodgment activities calendar as part of their income tax return procedures as a way of ensuring the lodgment of all their related entities is mapped out for the year and not forgotten.
“We also recommend undertaking a review of the draft return to identify any errors. To do this effectively, it's best to separate the duties of the preparer and the reviewer,” the ATO said.
For clients that prepare their return with a tax agent, the ATO said it recommends having an annual engagement letter or scope of work document.
“Include any out-of-scope items relevant to lodging the income tax return in your procedures,” it said.
“Our reviews have found that some Next 5000 groups who don’t use such a document often miss material items being reported, or sometimes they overlook lodging whole returns.”
The ATO said that entities should also implement processes and procedures such as checklists to ensure they can provide complete, accurate documentation, information and data to tax agents promptly.
“Remember the accountability for a late lodgment lies with you, not your agent,” the ATO warned.
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