Fortuna Accountants & Business Advisors along with Fortuna Legal combined to successfully object to an amended assessment issued by the ATO which sought to impose additional tax, penalties and loss denials on a restaurant group of over $500,000.
The ATO issued amended assessments on various bases, including a claim that the restaurant group’s figures were outside the benchmark ratio for total expenses to turnover. The objection demonstrated that the group legitimately incurred several large expenses which were higher than average but, when adjusted to normal levels, left the group’s ratios within the target range.
Fortuna Advisory Group Managing Director Dinesh Aggarwal said: “This result highlights the benefits to clients of our one-stop-shop approach to professional service delivery. The Accounting and Legal divisions interacted seamlessly to prepare an objection combining financial analysis and principles of law.”
Fortuna Legal Director Stephen Gethin questioned the application of benchmarks without regard to legitimate reasons why any given business may be outside them: “Benchmarks are just statistics and every data-set has outliers. Some business owners are more skilled at cost control than others. A failure to meet benchmark cost ratios should not be grounds for the ATO to issue an amended assessment without actual evidence of the business inflating costs or hiding income.”