Too good to be true tax advice for your business - is it worth the risk?
All business decisions involve some form of risk; it’s par for the course. Although fast and easy tax or business restructuring advice might seem appealing, if your source doesn’t know your business inside and out, your potential for risk will grow. As a business owner, your focus should be on mitigating risks and ensuring the advice you act on is backed by people who truly understand your business. Whether you are looking to restructure your business, access company funds, or make a significant tax decision, it is essential that the advice comes from someone trusted and highly qualified.
Appealing or misguided?
Over the years, the Accounting Heart team has seen firsthand how well-meaning but uninformed advice can go wrong. This particular example involved a business owner client who was looking to withdraw funds from their company to help a family member with a personal investment. A friend recommended an advisor they had never worked with before, who suggested restructuring their business to avoid tax.
The advice sounded appealing to the owner, but they contacted us before taking any action. Had they acted without our review, they could have triggered unexpected tax, breached compliance rules, and attracted ATO scrutiny. What seemed like a quick win could have resulted in serious consequences.
Talk to your accountant first, they know your history, goals and risk profile. The importance of reaching out to a trusted expert could mean the difference between a rash decision and one that works best for you and your business.
Confidence vs substance
Although advice may come from a confident source, you need to do your due diligence and verify their experience and qualifications to ensure you receive accurate information specific to your case. If you get into the habit of vetting the expertise of those you accept knowledge from, your decisions are lower in risk.
When receiving advice from a new source, ask yourself the following questions:
Has this person done this before?
Do they have experience in my industry?
Do they understand the risks associated with my business decision?
Are they qualified to give this advice?
Can their claims be verified with real examples or outcomes?
If you’re unsure, your accountant can help vet the advice for you. As experts in their field, accountants have the ability to assess your financial landscape alongside the advice you’ve received, to provide detailed and beneficial outcomes for your business.
Where to begin: specialised advice for your business
If you are looking to make some moves when it comes to your business, start the conversation with your accountant.
A great advisor won’t pretend to have all the answers. They’ll be honest about what’s within their scope and bring in the right experts when needed. Accountants have a wide range of experienced specialists they’ve spent years working with who are able to take the reins and provide specific information for your case. Good advisors don’t try to do it all; they know when it’s time to bring in a trusted outside source to ensure the advice is accurate, compliant and truly in the client’s best interest.
Your financial future: bring your ideas to the table early
Strong partnerships are essential in creating high quality outcomes over time that allow you to gain more clarity about your business’s future, reduce your liabilities when it comes to making professional vs. personal choices, and ensure your decisions are water-tight and well informed.
If you’re looking to receive fresh business advice, change your goals, level-up your career plan, or reassess personal objectives, bring your intentions to the table as soon as you can. The team at Accounting Heart are more than tax advisors; we are your strategic partner who can help assess your business’s future and provide skilled advice when planning big decisions.
If you’ve been offered advice that seems too good to be true, talk to us first. We’ll help you assess whether it stacks up, provide the best advice for your business, and keep your goals in focus.