The Australian Taxation Office (ATO) have recently unveiled their compliance strategies for the next financial year in the document, Compliance in focus 2013-14. What is new and what fits into the ‘same old, same old’ category? Lets start with the simple ‘same old same old’ categories.
The trend still remains that it is no longer ‘who’ is going to be audited or reviewed but rather ‘what’. The ATO continues to spend on and develop their computer systems to enhance and improve their data analysis and risk profiling capabilities. As a result, we will continue to see taxpayers receiving unnecessary or undeserving reviews or audits whilst the ATO hone their data mining skills with the ATO currently checking over 640 million transactions per year. Other than some of the Superannuation Guarantee Contributions (SGC) reviews that result from complaints raised by disgruntled employees and the ATO’s new pet project run by the Trusts Taskforce, the vast majority of the rest of the ATO’s targets are coming from some form of data matching.
In the ‘what’s new’ category it appears that this is the year that the ATO are going to flex their muscles with regards to trusts. Last year, as we know, they made noises and even sent out some ‘heads up’ letters, but the amount of activity that followed was relatively minor. Talking with people in the know, they warn that the ATO will increase their activities in this area. If you did not heed the warnings from last year, then take note this year to make sure all your trust arrangements and documentations are complete and in place.
Fringe Benefits Tax (FBT) has received a lot of press. With the July 2013 announcement of the proposed demise of our old friend ‘Statutory Formula’, the ATO also announced in their compliance plans that they are going to be looking at 5,000 employer obligation reviews which including FBT. They have declared their focus is going to be identifying employers that may have an FBT obligation but are not in the FBT system. Therefore, if your client has one or more cars registered in the business entity’s name, and the entity is not registered for FBT, and the entities return does not include an entry in the Employee Contribution field, then expect some attention.
There are various other client circumstances that may give rise to ATO attention such as being involved with the building and construction industry, using trusts and being a High Wealth Individual, to name just a few circumstances.
In light of the release of the ATO’s Compliance in focus 2013-14, it is paramount that your firm does not suffer as a result of the ATO’s targets. Accountancy Insurance’s tax audit insurance solution, Audit Shield, will ensure you remain protected against the perpetual increases in review and audit activity.
Contact the Accountancy Insurance team on 1300 650 758 or visit www.accountancyinsurance.com.au to find out more about Audit Shield.
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