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Using Dodgy Sales Software Could Cost You $1 Million

Using Dodgy Sales Software Could Cost You $1 Million – ATO Warning

In late September, a new bill was passed making it illegal to manufacture, distribute, possess, use or sell electronic sales suppression tools (ESSTs).

Now that this new bill has passed, the ATO will be going after what they call “dodgy” businesses.

So, what does this mean for you?

How to Avoid Receiving a Penalty from the ATO

If you are currently using an ESST on your software, you will need to remove it.

Businesses that acquired the ESST before the legislation was first announced on 9 May 2017 will be awarded a six-month transitional period until 3 April 2019.

Failing to comply with the new bill could see you receive financial penalties of up to 5,000 penalty units, equating to over $1 million depending on the offence and severity.

If the ATO believes you might be using an ESST in your POS system, they will send you a letter informing you to take action.

The ATO has urged all businesses to keep detailed records of every transaction, so you can explain any adjustments or calculations to your sales for tax purposes.

Is My Business At Risk of a Penalty?

Businesses using legitimate POS do not need to be concerned. The ATO states that it can tell the difference between a salesperson correcting an error when ringing up a sale and a deliberate manipulation of sales records for tax evasion.

If you have inadvertently purchased software with an ESST function and don’t use it to falsify sales, you aren’t fully in the clear.

It is still important to remove the ESST function and make sure you have detailed sales records to avoid unnecessary dealings with the ATO and keep yourself out of trouble.

These tools are designed for intentional tax evasion, with the purpose of deleting, changing or falsifying electronic sales records. You may also know them as ‘phantomware’ or ‘zappers’.

If you are knowingly using an ESST, you will need to resolve the issue to avoid receiving this penalty. We suggest taking care of this as soon as possible, even if you have been granted the transitional period.

If you are worried about unknowingly using an ESST, or you need help to resolve the situation, you can give us a call on 08 9371 8844 or book a free consultation.