August 29, 2005 - Leading franchise Brumby’s and the Australian Tax Office have agreed to trial an arrangement which delivers administrative tax concessions for franchisees and may set the model for future arrangements with other franchise chains.
The arrangement requires Brumby’s 300 franchisees to meet their existing reporting obligations of weekly shop reports and monthly profit and loss statements as well as lodging and paying their tax on time.
In return the Tax Office will reduce the period in which people need to keep business records for tax purposes from five to three years; be less likely to conduct intrusive reviews or audits; and provide potential concessional treatment in relation to penalties for any tax shortfall amounts where people have made a genuine attempt to comply.
The arrangement was developed to recognise businesses that have reliable business controls and meet their tax obligations.
Brumby’s managing director Michael Sherlock said the arrangement recognised businesses with good compliance behaviours and reliable internal controls.
“In return the Tax Office provides them with administrative concessions,” Mr Sherlock said.
Brumby’s and the Tax Office will evaluate the trial in six months to ensure the arrangement is working effectively.
Under the arrangement, Brumby’s would conduct assurance reviews to ensure integrity of the records and reports by franchisees.
“By giving this assurance to the Tax Office that franchisees are observing all their record keeping and reporting obligations, we have achieved significant concessions for our franchisees in meeting their administrative tax obligations,” Mr Sherlock said.
“With Australia having an estimated 850 franchise chains and more than 50,000 franchisees, this arrangement with the Tax Office is a major breakthrough that will hopefully be able to be duplicated beyond Brumby’s.”
Media enquires to:
Michael Sherlock Mb.0412 747 111
View Company Website: http://www.brumbys.com.au