The ATO recently launched a data matching program focusing on individuals and businesses who have sold more than $20,000 in goods and services on the online selling sites, eBay and The Trading Post in any of the last three financial years. If you are running a business through online selling sites, or perhaps making sales as a hobby, or even if you have an existing business and are making additional sales through these sites, then you need to include this income in your activity statement and/or tax return. Seeing as this would understandably not have crossed some people’s minds, it is important to be aware of this new program now and declare any income to avoid potential fines and/or penalties.
The data match detects businesses that are under reporting or not reporting income generated from the online stores. The ATO is encouraging anyone who may have understated their taxable income in the last three years to make a voluntary disclosure. The people who do so can benefit from significantly lower penalties and will be treated fairly, since voluntary disclosure potentially entitles taxpayers to an 80 percent reduction in penalties that would otherwise apply.
The recent program is part of the ATO’s compliance focus for 2010-11 which aims to crack down on issues that are worrying the ATO and to encourage voluntary compliance instead of non-compliant behaviour. This is done by:
• Identifying the individuals and businesses that don’t report or under report their sales
• Identifying the individuals and businesses that operate “off the books” and avoid their obligations by not registering, lodging returns or making payments.
The data matching program which focuses on online selling sites allows information from a variety of sources to be brought together and compiled, identifying individuals and businesses that are avoiding their tax obligations. The records are then matched against different identifiers such as tax file numbers, ABN’s, addresses and date of births. The ATO expects that records relating to between 10,000 and 30,000 individuals will be matched.
If you are unsure whether you have undeclared income or need some help in order to be in compliance with the ATO and possibly avoid any penalties please contact our experienced team of Accountants, Lawyers and Tax Agents. Here at The Quinn Group we can help you with all of your tax needs, whether you need help with making a voluntary disclosure, declaring income or any other issues. Please submit an online enquiry for more information or contact us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.