ATO Update 2018

ATO READY, AIM, FIRE.

The new year brings businesses the opportunity to review past performance, set new targets and make action plans for the year ahead. The Australian Tax Office (ATO) is no different and Australian Tax Commissioner Chris Jordan has given the Chartered Accountants publication, Acuity, a first-hand account of the targets and action plans the ATO has in its sights for 2018.

We’ve taken the time to summarise the key details that you need to take away from this ATO update.

Read the full Acuity article here.

ATO Update 2018

SUMMARY:

NEW TARGETS

After several years of focusing their efforts on the tax failings of large businesses and multinationals, the Australian Tax Office (ATO) is turning its attention to small businesses and individuals.

This is to include:

– undeclared business income

– wrongly-claimed non-business-expenses and;

– unpaid superannuation guarantee contributions

WHY THIS TARGET SHIFT?

The ATO has chosen to shift its focus from larger to smaller businesses and individuals in the belief that there is more to gain from the smaller targets.

Jordan told Acuity about how the ‘tax gap’ – the estimated gap between tax theoretical tax payable and the amount actually paid – is bigger for small taxpayers as a group than for its “larger market” group of big businesses. The ATO estimate the large market tax gap at A$2.5 billion.

So let’s take a closer look at the specific targets the ATO identified in more detail.

ATO Update 2018

THE DETAILS:

UNDECLARED INCOME

Jordan tells Acuity how “if we look at cash businesses, for example, why today do people want to have a cash-only business? People say to me: ‘it’s terrible – people steal the money, you’ve got to count it, you’ve got to reconcile it, you’ve got to have security around it, you’ve got to take it to the bank’ … There’s no compelling business reason to have cash only.”

The ATO’s data intelligence and analytics will be utilized to identify undeclared income, more on this and the full Acuity article here.

WRONGLY CLAIMED EXPENSES

This is a long-standing issue for the ATO and one that they are reigniting their focus on. Individuals claiming expenses they can’t prove and businesses mixing private with business expenses will be in the spotlight. The ATO wants you to know that they are watching and checking.

Keep your expense claims clean, more on what Jordan had to say on this here.

UNPAID SUPERANNUATION GUARANTEE CONTRIBUTIONS

A new single Touch Payroll is being introduced from 1st July 2018, a reporting change businesses with 20+ employees, that will aid the ATO in receiving direct information on the employee’s tax and super and therefore, be able to monitor any unpaid contributions.

Read more on the Single Touch Payroll here.

If you have any questions on this ATO update and what it could mean for you, please contact Pam on 3883 8999.

 

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