When dealing with the tax office, it’s vitally important that they know what type of business you are.
To help make this process easier, the Australian Tax Office issues five digit codes that relate specifically to your industry type.
The tax office has based the codes on the Australian and New Zealand Standard Industry Classification range as provided by the Australian Bureau of Statistics. While many businesses do cross into a variety of different codes, you should use the code that best suits your main business activity.
Once you identify the correct code from the Australian Tax Office’s list, this is the key code to use when dealing with the tax office and filling out any required tax returns.
The list of industries is wide and varied, so you will need to spend some time initially to carefully select the code that best suits your company’s situation.
For example, there’s five separate codes for the awning industry – installation or repair, fibreglass manufacturing, metal manufacturing, textile manufacturing and retailing. All five have different codes, so selecting the right one is important.
Your code is usually all numbers and will look something like this – 92420. In this case, that’s the industry code for authors.
Using the right code is not only important as far as meeting your day to day requirements with the tax office. It’s also important when it comes to the tax office providing industry statistics to the Australian Bureau of Statistics and other providers.
Accurate statistics and information helps determine a range of things such as funding, assistance and general public information – so your assistance in this process is important.
So what happens when you do use an incorrect code? An incorrect code could result in clients not receiving the necessary service or material from the tax office, or could lead to incorrect targeting of compliance activities.
While it does take a bit of time to set up initially, there’s really no reason why you shouldn’t find the right industry code – you’re only hurting yourself and your business if you don’t take it seriously.
Still have questions about tax codes? Why not take advantage of the knowledge and expertise that we at i3 Group are able to offer by giving us a call today on 1300 725 647.