Monday morning tip time and again in this series for end of financial year preparation. This tip is about mistakes you can make and how to avoid them if you are in the building industry.
Now, you builders out there, you’re so busy organising trades, dealing with your customers, applying for permits & insurances, you might just be forgetting a few very important things that need to be taking care of for you to be compliant with the ATO and I am here to give you a couple of tips on what to do AND what not to do.
I’m not an expert in building trade however as a tradies’ daughter I have seen some pretty below par record keeping. My dad was a plumber and drainer, and he was magnificent at his trade, but on the record keeping not so much.
He kept a diary that lasted probably five years or so, he didn’t really ever write in the diary things that normally you write in a diary. He just write notes on his customers, so it just was a bit of a hot mess to be honest, but that was back in a day when tax compliance was simply their End of Year returns. In today’s world, he would be in trouble right now.
I think back in his day when he paid his subbies, there was not a lot of Tax Invoices handed around. Yes, that is what happened 20 or 30 years ago, however we are talking about today. And today’s rules are completely different. The ATO has specific rules for how to treat subcontractors in the building industry.
As your bookkeeper, it is my job to make sure that these specific reports are sent through the ATO in a timely fashion and all the information is provided as well. However, I can’t do that report if you don’t do your bit and what exactly is that “Bit”. RECORD KEEPING!!!
The tip today is take a record of whom you are paying, get the subbie’s ABN number, check it, ensure that they are registered or not for GST. You will need their phone number, and all other contact details. You might say, “we only have this guy working for me for one day and I don’t have his details.” GET THE DETAILS!!! The devil is in the details as they say.
Otherwise this can lead to big troubles with the ATO. Nobody wants big troubles, so avoiding a mistake like this save lots of time and money
We are happy to help you find out what are common mistakes, but especially how to avoid them.
Have a great day.