The Australian Taxation Office (ATO) recently released its Compliance Focus for the new financial year. The Compliance program expresses the ATO’s particular concerns and their plans to combat them, with a focus on tax and superannuation compliance. Small business owners may potentially be implicated in a number of these concerns which are listed below.

Cash Economy
Concerns have been raised regarding the deliberate under-reporting or non-reporting of income, such as businesses using cash transactions in an effort to hide income and evade their tax obligations. The next four years will see an increase in the use of data matching and benchmarking to identify these businesses and an extra 31,500 audits and reviews will take place. Non-compliant businesses may become subject to penalties, sanctions, default assessments , prosecution or be reported to the Tax Practitioners Board.

Business Activity Statement (BAS) Refund Activity
The ATO has significantly improved technique for recognizing compliance issues with regards to BASs. The government has provided extra funding for that ATO to increase their focus on fraudulent and incorrect BAS refund claims.

Employer Obligations
The ATO has developed an online support tool to help business owners check to see if they are treating their workers fairly and in accordance with the tax and superannuation laws . Businesses may be monitored and even visited to ensure that the correct amounts of PAYG and appropriate superannuation payments are being remunerated. All complaints will investigated under the new compliance program and the ATO expect to take action on over 17,500 employee complaints about underpaid super. A planned 800 compliance reviews will also take place to target industries and employers showing a pattern of non compliance.

Property, Assets and Investments
The ATO will also be focusing their review and audit activities on small business’ Capital Gains Tax (CGT) concessions claims, CGT and GST reporting, as well as non lodgment of tax returns and activity statements where a CGT event has occurred.

Some micro businesses (a micro business is any business with a turnover under $2 million dollars annually) may be claiming losses which they are not entitled to use. The ATO will be contacting these businesses and providing them with information about incurring and using losses as well as reviewing the tax affairs of these businesses. This will be done to make sure that the tax is payable is not reduced incorrectly.

International Dealings
There will be a focus on tax have related transactions though the use of information matching, monitoring online transactions and money transfers and supplied information from overseas revenue agencies.

Self Managed Super Funds (SMSFs)
The ATO will audit or review approximately 10,800 funds. There will be a focus on loans to related parties, whether trustees have properly met their income tax obligations and examining deduction claimed for exempt current pension income and the treatment of losses.

Here at The Quinn Group our experienced team of accountants can assist your business with all of its taxation needs as well as ensuring that you are compliant with all of the ATO concerns mentioned above. Please submit an online enquiry or call us on 1300 QUINNS to book an appointment.