Common Tax Return Challenges for Small Businesses in Perth and How to Avoid Them

Mon, 22 Sep 2025

Tax season in Perth has two very different faces.

The first one? You’ve probably lived it. Receipts everywhere, deadlines breathing down your neck, and that moment of hesitation before opening the mail, just in case it’s the ATO. Suddenly, sleep feels harder, weekends disappear, and tax talk manages to sneak into every chat.

The second face looks nothing like the first. The books are in order, the tax return lodged on time, and deductions claimed properly. The business owner finally breathes easy, knowing there are no nasty surprises waiting. Nights are calmer, focus returns to growing the business, and tax time becomes just another item ticked off the list.

This blog is about moving from the first picture to the second. It’s about the common tax return challenges small businesses in Perth run into, and the practical steps to avoid them.

1. Keeping Accurate and Organised Records

For many business owners, the trouble starts with the records. A shoebox full of receipts, an invoice you swear was there yesterday, and expenses that somehow got tangled between personal and business accounts. It’s a common mess, and it turns tax season into a frantic rush.

Common challenges:

Losing receipts and invoices
Inconsistent bookkeeping
Mixing personal and business expenses

How to avoid it:
Using cloud-based accounting software can change the game. Everything gets stored in one place, easy to access, and automatically backed up. Make sure your business has a separate bank account to keep personal spending out of the mix. And check your accounts regularly because reconciling monthly can save a last-minute headache when your small business tax return in Perth is due.

2. Understanding Deductions and Tax Credits

Tax deductions sound straightforward, but they’re often confusing. What counts as deductible? Is that expense capital or operational? Small mistakes here can either leave money on the table or trigger questions you don’t want from the ATO.

Confusion over deductible expenses
Overlooking small or irregular deductions
Misclassifying capital versus operational expenses

How to avoid it:
A quick chat with a tax return agent in Perth can save you a lot of headaches. Jot down details for every purchase, big or small, and keep an eye on ATO updates. When you’re organised, even the tiny expenses work in your favour.

3. Managing GST and BAS Reporting

GST can be a real source of headaches if it’s not handled properly. Small errors in calculation or late Business Activity Statements can create penalties or compliance problems.

Common challenges:

Incorrect GST calculation
Late or inaccurate BAS submission
Confusion over input tax credits

How to avoid it:
Set aside time each month or quarter to review your GST obligations. Automating calculations through accounting software helps reduce errors. If you’re unsure about BAS lodgement, consult a professional. Tax accountants in Perth can save you time and keep everything compliant.

4. Cash Flow Issues Affecting Tax Payments

Even if your books are perfect, cash flow problems can make tax payments tricky. Tax bills are often based on income rather than cash on hand, which can surprise business owners.

Common challenges:

Inability to pay tax liabilities on time
Misestimating quarterly tax obligations
Relying on projected income instead of actual cash flow

How to avoid it:

Set up a separate account just for tax and add to it regularly. Plan your tax payments the same way you plan your cash flow, and if things get tight, speak with a professional about installment options. A little planning now can make your tax return for small businesses in Perth much smoother.

5. Choosing the Right Business Structure

Your business structure isn’t just a formality. It affects how much tax you pay and how you report it. Using the wrong structure can cost more than you expect.

Common challenges:

Paying more tax than necessary due to incorrect structure
Not updating the structure as the business grows
Missing out on tax benefits from trusts, partnerships, or companies

How to avoid it:

Review your business structure at least once a year with a tax specialists. Understanding the difference between a sole trader, company, or trust is important. If your current setup isn’t efficient, restructuring may save money and simplify your small business tax return.

6. Dealing with ATO Audits and Compliance Checks

Nobody likes the idea of an audit, but being prepared makes it manageable. Keeping incomplete records or submitting late returns increases the likelihood of ATO checks.

Common challenges:

Fear of ATO scrutiny
Incomplete or inaccurate documentation
Penalties for late or incorrect submissions

How to avoid it:

Keep records for at least five years and respond quickly to ATO queries. A professional tax return agent in Perth can guide you through audits and ensure all documentation is in order. Proper preparation makes this process much less stressful.

7. Avoiding Common Mistakes During Lodgement

Even simple errors can create big problems. Missing deadlines, incorrect expense claims, or data entry errors can cost time and money.

Common challenges:

Filing late or missing deadlines
Confusing personal and business expenses
Arithmetic or software input errors

How to avoid it:

Prepare your returns well before deadlines. Use accounting software with error-checking features and consider a professional review before submission. A skilled tax accountant can double-check everything, so you avoid penalties and maximise your refund.

Wrap Up

Tax season often feels like a mountain, but it doesn’t have to. For small businesses in Perth, staying organised, understanding deductions, keeping GST in check, managing cash flow, choosing the right structure, and avoiding lodgement mistakes all become manageable with the right planning.

Having WMK Accounting by your side takes the pressure off tax season. Our tax accountants know how to keep you compliant, cut down mistakes, and make sure you claim everything you’re entitled to. So, don’t wait for the deadline rush. Get in touch with us today and make your small business tax return stress-free.