What Is The ATO Targeting This Year?

by Ian Morella, Director of Accounting

With End of Financial Year behind us, and the new tax season now in full swing, we thought now was timely to advise you of the ATO’s Compliance Program for 2011/2012 and update you on their key focus areas.

The ATO has a range of measures in place to ensure they detect and deal with individuals who evade their tax obligations, including working across government agencies both in Australia and internationally.

Key focus areas for the Compliance Program 2011/12

Data Matching

Each year the ATO cross references information reported in tax returns against at least 500 million transactions reported by other parties.

They will contact over 400,000 individual taxpayers who have apparent discrepancies in the information they reported.

Last year the ATO identified more than 28,000 individual tax returns with total refunds greater than $129 million, which they believed to be potentially fraudulent or include overstated refund claims (including $27 million in claims that are potentially related to identity crime).

This year, the ATO plans to:

  • Use data matching to ensure taxpayers return all of their income and claim offsets they are entitled to
  • Use data matching and risk profiling to identify those who are using non-lodgment or partial lodgment to circumvent their responsibilities
  • Identify business that have received government payments and review those suspected of not returning income or not meeting their PAYG withholding and superannuation obligations

Cash Income

The ATO has increased its scrutiny of businesses deliberately not reporting their cash income, with over 1.4 million small businesses evaluated against their risk-detection systems, and over 16,000 businesses directly contacted through their compliance activities.

These compliance activities raised approximately $151 million in liabilities in the last financial year.

This Year the ATO Plan To:

  • Focus on those who fail to report some or all cash transactions to ensure a level playing field
  • Examine businesses operating outside the ATO’s small business benchmarks
  • Superannuation Compliance

In relation to superannuation, the ATO plans to:

  • Ensure employers are paying the correct amount of superannuation guarantee
  • Implement strategies to deal with concerns they have with trustees of SMSFs and act against illegal access or release of superannuation

Over the last five years, the ATO’s superannuation guarantee compliance activities have resulted in around $1.3 billion of additional superannuation being collected for the benefit of employees.

Superannuation: Common Mistakes Made by Employers

The ATO has reminded employers of their superannuation obligations, setting out common mistakes they are seeing, including:

  • Paying insufficient super contributions for eligible employees
  • Missing the quarterly cut-off dates (28 October, 28 January,28 April, 28 July)
  • Not understanding that in some circumstances super should be paid for contractors, even if the contractor quotes an ABN (super needs to be paid for contractors employed under a contract that is wholly or principally for the contractor’s labour)
  • Not keeping accurate records
  • Not lodging a Superannuation Guarantee Charge statement if they have not paid their employees’ super to the fund by the due date or don’t pay the correct amount
  • Not passing on an employee’s tax file number to their superannuation fund within 14 days of receiving it. If they don’t, the employees’ super contributions will be subject to extra tax and may not be accepted by the super fund (and the employer may also be penalised)

Work-Related Expenses

Deductions for work-related expenses have increased by about 16% since 2007 and are one of the largest categories of claims made in tax returns.

This year, the ATO will be paying particular attention to deductions made by people employed as earthmovers, flight attendants, carpenters and joiners (including apprentices and trainees) and real estate employees. The ATO has found people in these industries are at risk of getting their work-related expenses claims wrong due to the types of deductions they claim.

Ensuring you complete your tax return correctly is essential in not only ensuring your receive all the deductions you’re rightly entitled, but also to ensure you are meeting all the ATO’s obligations and are not in breach of any regulations.

For more information on any of these matters, or to speak with a John Hopkins Taxation Accountant, please contact our Client Liaison Officer on 1300 726 082.




   To book an appointment with a John Hopkins Taxation Accountant, please call our Client Liaison Officer on 1300 726 082 or click here. 

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