Late last year the Commissioner of Taxation’s Annual Report was released by the Australian Taxation Office (ATO). A few key themes were evident in the report including the refinement of deductions being claimed, ongoing targeting of privately owned and wealthy groups, as well as highlighting the continued focus on the black economy.
In the 2016-17 financial year the ATO undertook an impressive 762,000 compliance activities, including tailored letters, pre-issue reviews, audits, working with large employers, and personal visits to tax agents. These activities alone resulted in additional tax liabilities of $893.8 million being raised and also helped in refining the strategies to increase the number of compliance activities the ATO undertakes in 2017-18. A few highlights I have extracted from the ATO report are listed below.
- The value of all audit related compliance liabilities raised increased to $15.6 billion, up $1.8 billion from the previous financial year.
- The Black Economy Taskforce facilitated contact with in excess of 11,000 businesses, raising more than $190 million.
- Privately owned and wealthy groups remained on the hit list, with $3.3 billion raised by the ATO in
- More than 640 million records were received for review and cross-checking through the extensive data-matching
Setting our vision to further down the track, I suspect that a key area of interest for the next report would be cryptocurrency.
On page 6 of this newsletter Zowie Pateman from CA ANZ discusses the anti-money laundering legislation, which has been modified to allow for the current and anticipated implications of cryptocurrency. At the time of writing this article, the ATO was establishing a taskforce (yes, another one) to clarify and enforce tax treatment for transactions associated with cryptocurrencies, specifically bitcoin. The ATO considers cryptocurrency transactions such as bitcoin akin to bartering, which is dissimilar to many overseas revenue agencies that consider it as a form of foreign currency. Bitcoin is, however, an asset for capital gains tax (CGT) purposes. The waters are still murky, yet I am sure there is more to come on this front.
Despite the media whirlwind that has been cryptocurrency, the ATO has still kept a finger on the pulse in relation to other areas of interest. To kick off the New Year, the ATO announced in January 2018 that it would be visiting more clients over the next 12 months to check they are reporting cash payments. Just a few weeks later in February the ATO announced draft practical compliance guidelines in relation to fringe benefits tax and employer-owned vehicles. If the guidelines are enacted into policy, employers may find themselves exposed to FBT on certain types of vehicles despite a common belief that there is or was an exemption in certain circumstances.
The ATO’s 2018 hit list
- Undeclared income
- Unexplained wealth or lifestyle
- Private expenses incorrectly claimed
- Unpaid superannuation guarantee contributions
- Concentrations of cash-only business
In addition, Single Touch Payroll comes into effect as of 1st July 2018 for employers with 20 or more employees. Similarly, employers with under 20 employees will be affected by 1st July 2019.
It appears to be a hive of activity at the ATO, with no signs of slowing down. As usual, if you have any comments or questions please feel free to send me an email on rod@accountancyinsurance.com.au.
- Audit Shield claims activity across Australia Jul-Dec 2022 - 30 January 2023
- Predicted ATO audit activity trendsfor 2021 & 2022 - 17 August 2021
- Tax audit claim stats all accountants in Australia will want to know - 14 July 2021
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