ATO Compliance – Back on the Agenda
During the height of COVID-19 and its dramatic impact on everyone and everything, including the business community, the ATO particularly relaxed its compliance and auditing activities to give businesses a chance to “weather the storm”.
Now that things are slowly getting back on track, authorities have made it clear that they are focusing on ensuring compliance and specifically targeting non-compliance across various taxation areas.
Specifically, the budget has provided funding for a number of ATO programs targeted at taxation compliance.
These include:
• Personal Income Taxation Compliance Program
focusing on areas such as over claiming of deductions and incorrect reporting of income.
• Shadow Economy Compliance Program
targeted at shadow economy activities such as cash transactions that take place outside the tax and regulatory system, protecting revenue and level the playing field for those businesses that are following the rules through the expansion and improvement of the taxable payments reporting system.
• Tax Avoidance Taskforce
this is the largest allocation of the Government’s funding in relation to targeting tax compliance and so you can expect to see a lot of activity in this area.
Funding of the Tax Avoidance Taskforce will support the ATO to target the priority areas of observed business tax risks, together with its ongoing focus on multinational enterprises and large public and private businesses.
As a result we expect to see increased scrutiny in relation to areas such as:
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Determining the allocation of sale proceeds as capital or revenue.
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Managing all aspects of Capital Gains Tax (CGT) disposals and assisting with small business CGT concessions.
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Advising on Division 7A loans.
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Handling trust distributions, including those under section 100A.
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Guiding related-party transactions to ensure compliance and efficiency.
As is always good business practice, it is important to seek professional advice to ensure ongoing tax compliance in your business. If you are doing the right thing, you should have nothing to worry about if the ATO decides to look into your business a little further.
Always keep good business records and maintain all supporting documentation for your transactions so you can readily provide the ATO with substantiating evidence if requested.
Extension of Small Business Debt Helpline and NewAccess for Small Business Owners Programs
The government has committed $15.1 million over two years (1 January 2023 to 31 December 2024) to extend the Small Business Debt Helpline and NewAccess for Small Business Owners programs.
The provision of these programs provides much needed mental health coaching and financial counselling for small business owners free of charge. They are a valuable service for business and business owners who are in need of additional support and guidance in these challenging times.
