The term “tax risk management” is usually used in reference to large corporations and simply refers to a deliberate strategy to minimize tax liabilities while complying with all relevant laws and procedures. But putting strategies in place to manage tax risk is a smart idea for small businesses and individuals as well.
In large enterprises, the board of directors, management and other key players must come together to develop the best tax risk management strategy. For smaller organizations or individuals, this could be a one-person assessment of issues and risks.
Risks examined involve uncertainties in tax laws and how to deal with them as well as financial reporting decisions, how acquisitions are handled, tracking sales properly and a host of other issues.
Since an ATO audit can be costly and time-consuming, the primary tax risk to consider is proper compliance with tax laws. A tax professional can’t accurately prepare a return for a company or individual without a complete understanding of how the numbers provided were reached.
Like so many other aspects of business, tax risk management simply comes down to making a plan, following it and constantly reassessing this plan to make sure it complies with all laws, takes into account all eventualities and adequately serves the needs of the person or the organization.
Without good planning, the person or organization is open to undesirable and unnecessary risk — and this kind of risk is a bad business decision.
For advice and strategy, get in touch with our team at Anne Street Partners today and speak to one of our friendly team on 134 977