Business Activity Statements (BAS) are crucial business documents outlining tax obligations to the Australian Taxation Office (ATO). Completing BAS accurately and on time is not only a legal requirement but also vital for a business’s financial health and compliance. However, many companies, especially smaller ones, often cut costs by engaging unregistered and unqualified individuals to handle their BAS responsibilities. While this might seem like a cost-saving measure initially, the perils of using unregistered and unqualified personnel for BAS tasks can be severe and far-reaching.
One of the primary dangers is the risk of non-compliance. BAS preparation requires a deep understanding of tax laws, regulations, and compliance requirements set by the ATO. Unregistered people lack the necessary training, expertise, and legal authority to interpret and apply these regulations accurately. As a result, businesses risk submitting incorrect or incomplete BAS, potentially leading to penalties, fines, and legal consequences.
Unqualified individuals may lack the knowledge and experience to appropriately interpret the relationships between related transactions that impact whether a transaction is an expense or a capital item. If this is wrong, your profit and loss statement will be wrong. This could then affect the amount of net profit you are showing and, consequently, the amount of tax you are paying.
Another peril of relying on unregistered individuals for BAS tasks is the higher risk of errors and inconsistencies in financial reporting. BAS discrepancies can trigger ATO audits, leading to increased scrutiny, disruptions to business operations, and reputational damage. Moreover, inaccurate financial reporting can distort business performance metrics, making it difficult for stakeholders to assess the true financial health and viability of the business.
Registered BAS Agents must hold professional indemnity insurance should they make errors that have a financial impact on clients’ matters. There are also other requirements such as confidentiality, being a fit person to hold the registration, etc, and being able to complete many hours of professional education each year.
Partnering with registered and qualified BAS agents offers numerous benefits and safeguards for businesses. Registered BAS agents undergo rigorous training, certification, and ongoing professional development to stay abreast of evolving tax laws and regulations. They have the expertise and experience to accurately prepare and lodge BAS, reduce compliance risks, and optimise business tax outcomes.
Registered BAS agents adhere to strict ethical standards and professional codes of conduct, ensuring financial information’s integrity, confidentiality, and security. By outsourcing BAS tasks to registered agents, businesses can streamline their tax compliance processes, mitigate risks, and focus on core business activities without compromising regulatory compliance or financial integrity.
The perils of using unregistered and unqualified individuals to handle BAS tasks cannot be overstated. Ask Valerie, is currently taking on new clients, if you want to partner with a registered and qualified BAS agent.
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