Most business owners understand that, for the most part, anything that is a business-related expenditure is typically legally deductible, and personal expenses aren’t.
Yet, one of the most commonly used tax evasion strategies is to run personal expenses through the business – from dog food to kitchen renovations, we’ve seen it all!
Now, this might seem like a clever strategy to reduce your tax (or even funny to laugh about with friends and family)…
But the reality is, this is tax fraud.
You’re intentionally abusing and evading the taxation system for your own financial benefit… And in Australia, it’s against the law to do something purely for the purposes of avoiding tax!
And if the ATO does decide to audit you and they find out you’ve been fraudulent in your claims, then you’re going to be in serious trouble because there’s no lawful reason to claim personal expenditure as business expenditure.
They’re going to burn you with hefty fines AND a debt that you now owe them.
And if you can’t pay, then they’ll put you on a payment plan and you’ll end up on the ATO debt treadmill. And I don’t know about you, but the ATO isn’t exactly my lender of choice!
The ATO is the most powerful agency in the country – you’re dealing with the government’s money (and the government loves their money!).
So, don’t play around with them.
If you're an electrician, plumber, painter, carpenter, or any other tradie business owner who is looking for assistance with your tax, accounting, and bookkeeping - click here to learn more!
