The rapidly evolving sharing economy, in the form of household names such as Uber and Airbnb, has the Australian Taxation Office (ATO) concerned that these entities are not paying their fair share of tax.
The list of target areas for the ATO continues to get longer each year, and as such the net widens for more scrupulous data matching efforts. In fact, the ATO cautioned that it has more than 600 million pieces of third-party data to track activity and income. With more refined data-matching technology at the hands of the ATO, it will mean that the sharing economy will not be the only target for the ATO and other government revenue agencies in their pursuit of increasing audit activity.
What the Claims Department at Accountancy Insurance can surmise from client claims statistics of audit activity over the past 12 months is:
- Full audits, including comprehensive risk reviews and High Wealth Individual (HWI) reviews, increased by 34% in the number of lodged claims, and 98.8% in the total claim value.
- The ATO has changed the focus regarding HWIs and how it deals with privately owned wealthy groups. This has resulted in increased audit activity, and in particular the total time and cost it takes to satisfy the instigation has increased.
As the Australian Federal Government aims to increase audit activity funding by 55% over the next four years, growth in audit activity will continue, as it remains a major source of revenue for the government.
The evidence of increasing audit activity is clear with the Accountancy Insurance Claims Department stating that more than $1,000,000* is paid per month in professional fees to Australian and New Zealand accountants for the costs that have been incurred by their clients as a result of audit activity.
More than 2500 accounting firms utilise Audit Shield to protect themselves and their clients against the ramifications of audit activity. If you would like to learn more about Audit Shield or current audit activity, please visit www.accountancyinsurance.com.au.
*This figure is based on an average monthly total, based on the data of more than 2500 accounting firms since July 2015.
Charlotte Gell, Marketing Executive, Accountancy Insurance