With $75 billion in contracts up for grabs last financial year, government tenders are a potentially lucrative source of new business.
Tenders range from simple supply contracts worth thousands of dollars to major multibillion-dollar infrastructure projects.
While the opportunities are great, getting your tender over the line has just become a little harder with the government this year introducing new measures designed to clamp down on the black economy.
As a result, businesses looking to tender for government contracts worth more than $4 million will have to plan ahead to get their tax affairs in order.
Specifically, under the new government procurement regime taking effect on July 1 this year, any business without a Statement of Tax Record (STR) will not be eligible to secure a new government tender.
A compliant STR should show that all registration requirements for the business are up to date and that it doesn’t have an outstanding tax debt of $10,000 or more to the Australian Taxation Office. The business is also required to have lodged at least 90 per cent of its income tax returns, fringe benefits tax returns and business activity statements that were due over the previous four years.
The ATO will take up to 4 days to turn around requests for STRs so it makes sense to plan ahead.
New businesses with a tax record of less than four years need to meet additional conditions, namely declarations around compliance of tax obligations.
The new procedure is designed to enable tenderers to present a clean bill of health to the government which is keen to support those businesses that are meeting their tax obligations.
What this means, of course, is that businesses need to work closely with their accountant to ensure that every entity within the group complies.
It starts with a complete review of the business to ensure compliance, and those businesses looking to apply for tenders in the new financial year need to act fast by contacting the team at MWM Advisory to get the ball rolling.
For further information, contact an MWM Advisory team member at distracted-hamilton.203-191-39-162.plesk.page/contact.