Late lodging SMSFs to have contributions suspended

18 September 2019
Credit: SMSF Adviser

An update posted to the ATO website on Wednesday stated that from 1 October, funds whose annual returns were overdue by over two weeks would have their status on the Super Fund Look Up (SFLU) system changed to ‘regulation details removed’.

“Lodging your SMSF annual return on time is a fundamental part of your obligations as an SMSF trustee,” the ATO said.

2 weeks to go: ATO sounds warning on STP deadline

17 September 2019
Credit: Accountants Daily

The 30 September deadline for small businesses with 19 or fewer employees to become Single Touch Payroll compliant is now just two weeks away.

According to the ATO, there are 350,000 small businesses now reporting under STP, or just under 50 per cent of the estimated 750,000 small business population.

Could your Instagram profile get you audited by the ATO?

16 September 2019
Credit: My GC

It might sound far-fetched, but your social media accounts could just land you in trouble with the Australian Tax Office.

The ATO are always sharpening their data-gathering tools, and now they’re adding social media to the rich tapestry of information at their fingertips.

Translation: taxpayers could have their social media accounts monitored to see if claims are legitimate.

ATO diversification letters a ‘wake-up call’

13 September 2019
Credit: Accountants Daily

Close to 18,000 funds have now received letters from the Tax Office because records show these SMSFs hold 90 per cent or more of funds in a single asset class.

The Tax Institute’s senior tax counsel, Professor Robert Deutsch, believes the ATO is not trying to dictate the type of investments made, but is instead concerned over funds that have used limited recourse borrowing arrangements (LRBAs) to make a leveraged 90 to 100 per cent investment in one property.

Over 10% rise in dodgy tax agent tip-offs

12 September 2019
Credit: Accountants Daily

Last Friday, the Tax Office revealed that a one-year prison sentence had been given to a tax agent found to have deliberately underreported the earnings of eight clients in order to deliver higher tax refunds, pocketing the difference, in a scheme worth more than $90,000.

Asked to comment on the prevalence of community tip-offs about suspect behaviour on the part of tax agents, a spokesperson for the ATO told sister title My Business that it received 209 “dob-ins” in the 2018–19 financial year.

‘We don’t want businesses to fail’: ATO looks to equip practitioners with more advisory tools

10 September 2019
Credit: Accountants Daily

Speaking at Xerocon 2019, ATO second commissioner Jeremy Hirschhorn said the agency’s greater access to data has given it the opportunity to help practitioners deliver better insights to its business clients.

“If we can get you information into your systems, where you can see that your hairdressing client in this suburb is doing poorly compared to other hairdressing clients — well, that’s very useful information for…

“Nearly impossible”: As nations wade into cyber crime, how can businesses keep up?

6 September 2019
Credit: Smart Company

Entrepreneurs need to be sceptical about their interactions with other companies in a cyber security landscape that’s failed to protect small businesses and consumers.

That’s the view of information security expert Jaya Baloo, who yesterday delivered a stinging rebuke of lawmaker efforts to deal with a surge of cyber crime internationally in recent years.

Accounting network spots shifting behaviour towards work related expenses claims

4 September 2019
Credit: Accountants Daily

Over one out of two taxpayers said they have left out a claim in their tax return because of uncertainty and fears of being audited by the Tax Office, new research by H&R Block has shown.

The study comes after ATO data showed that close to $70 million in revenue was retained in 2017–18 thanks to risk messaging in tax agent pre-fill reports and “nudges” in myTax, warning agents and self-preparers that their work-related expense claims were higher than expected.

“We have to be better”: ATO overhauls culture to bolster business empathy

2 September 2019
Credit: Smart Company

The tax office has formed a dedicated team to oversee complex cases where businesses are intentionally shirking their obligations, a bid to better distinguish between black economy bandits and well-intentioned companies.

Australian Taxation Office (ATO) commissioner Chris Jordan says the tax office needs to be more empathetic to small businesses and will exercise more discretion in cases where firms have made mistakes or fallen behind, versus intentional lawbreaking.

Audit activity set to intensify in the wake of small biz tax gap revelation

28 August 2019
Credit: Accountants Daily

The small business tax gap is 12.5 per cent, or $11.1 billion, making it significantly larger than the corporate tax gap at $1.8 billion, or 4.4 per cent, and the individuals not in business tax gap at $8.7 billion, or 6.4 per cent.

However, of the $11.1 billion tax gap, 64 per cent, or $7.7 billion, is estimated to be due to the black economy, where businesses deliberately hide or under-report their income, and deliberately overclaim business expenses.

What to do if you get this letter from the ATO

14 August 2019

Australian taxpayers unlucky enough to receive one of the ATO’s ominous “data matching” letters this year are being urged to act quickly or face being thousands of dollars worse off.

The tax man uses sophisticated technology to sift through mountains of data from third-party institutions such as banks to sniff out whether any information, such as sales of shares or property, has been left off a tax return — and the number of Aussies receiving these “please explain” letters is growing every year.

ATO flashes reminder ahead of TPAR deadline

13 August 2019
Credit: Accountants Daily

Taxable payments annual reports (TPAR) are due by 28 August this year, with businesses that provide cleaning or courier services set to lodge for the first time, joining businesses in the building and construction industry that have been doing so since 2012.

As of early August, over 30,000 businesses have already lodged a TPAR for 2018–19 or told the ATO that they are not required to lodge.

myGov tax-time scams set to surge amid STP changes

8 August 2019
Credit: Accountants Daily

With tax time now in full swing, the Australian Cyber Security Centre is warning tax practitioners and their clients to expect a surge in scammers impersonating trusted brands like myGov or the ATO.

According to the ACSC, the ATO received 6,444 reports of tax-time scams that impersonated the ATO in June 2019, with emails with links to fake myGov login pages being the biggest email scam in that month.

STP regime sees increase in ATO ‘please explain’ letters

5 August 2019
Credit: Accountants Daily

Speaking with Accountants Daily, Carbon Group partner Michelle Maynard said the firm has seen a rise in clients receiving letters from the ATO asking if they have met all their superannuation guarantee obligations.

“I’ve had three or four letters in the past two weeks saying, ‘We don’t think you’ve met your super obligations for a certain period…

Australian business ‘completely unprepared’ for cyber hacks, up 700%

1 August 2019
Credit: The Sydney Morning Herald

Australian businesses are “completely unprepared” for cyber attacks or data breaches, with reported incidents increasing by more than 700 per cent since February last year, costing the nation $7.8 billion, a report has revealed.

Solitary hackers, organised crime groups and “bad actors” working on behalf of foreign governments, such as China…

‘No industry is immune’: What accountants should know about the underpayments saga

1 August 2019
Credit: Accountants Daily

As the government moves to criminalise wage theft in the wake of a number of high-profile wage underpayment cases, including the latest example of celebrity chef George Calombaris’ MAdE Establishment group of companies backpaying $7.8 million, BDO partner Ben Renshaw believes more cases are set to get featured as Fair Work continues its crackdown and employees become more self-aware.

Up to 9 in 10 ‘other’ expenses adjusted as ATO reveals dodgy claims

31 July 2019
Credit: Accountants Daily

ATO assistant commissioner Karen Foat has revealed that nearly 700,000 taxpayers claimed almost $2 billion of ‘other’ expenses last year.

Accountants Daily understands that a random sample of 400 of those ‘other’ expenses claims saw adjustments made to 88 per cent of them.

Are you claiming all you are entitled to this tax time?

30 July 2019
Credit: Nestegg

“Good things come to those who wait” is the catchcry of the Australian Taxation Office this tax time, so ASIC’s MoneySmart has provided an updated guide for what can and can’t be claimed in 2019 for those yet to prepare their return.

When completing your tax return, you’re entitled to claim deductions for some expenses, most of which are directly related to earning your income, the guide stated.

Business tax debts set to be disclosed under new law

26 July 2019
Credit: Accountants Daily

With the introduction of Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019, a measure seeking to allow the ATO to disclose business tax debts to credit reporting bureaus has been revived.

The measure, which lapsed with the calling of the election earlier this year, has been slightly tweaked from its original proposal.

ATO set to visit almost 500 businesses in cash crackdown

24 July 2019
Credit: Accountants Daily

In a public update, the ATO said it is planning to visit close to 500 businesses in or around Port Macquarie and Wauchope in late July and early August as part of ongoing efforts to combat the black economy.

ATO assistant commissioner Peter Holt said there are a number of businesses in this region who are not registered for GST or pay as you go withholding which can be a sign of the black economy.

Early lodgement spike sparks tax assessment fears

19 July 2019
Credit: Accountants Daily

Accountants Daily understands the ATO has now received 2.4 million lodgements this tax time, around 24 per cent up over last year’s figures at the same time.

To date, over 935,000 individual tax refunds have been processed, with a total value of over $2.2 billion. The average refund amount is $2,360.

ATO releases new toolkit amid rental property scrutiny

18 July 2019
Credit: Accountants Daily

Earlier this year, commissioner of taxation Chris Jordan singled out rental deduction claims as a priority for his agency this tax time, after a random audit sample of returns with rental deductions found that nine out of 10 contained an error.

Over 50,000 SMSFs contacted in late-lodgement crackdown

17 July 2019
Credit: Accountants Daily

As part of its compliance action on overdue SMSF annual returns over the past year, the ATO has written to 50,000 SMSF trustees, advising them that their lodgement is overdue and that the fund’s details have been removed from Super Fund Lookup (SFLU).

The ATO said super funds and employers should not roll over benefits or pay super guarantee payments to funds that aren’t on SFLU.

Seven easy cyber security checks all business owners should do

15 July 2019
Credit: Smart Company

Running virtually any business these days leads to cyber exposure. From how you take payments and storing customer data to managing files in the cloud, businesses have new and evolving cyber exposures they need to be aware of and manage.

Keeping across all of this can be daunting, but alongside ensuring you have good cyber insurance protection, below are a few key points to consider.

Risky behaviours with cryptocurrency and SMSFs on ATO’s radar

9 July 2019
Credit: SMSF Adviser

With the ATO requiring SMSFs to fill out additional data about their cryptocurrency investments in their tax return, this could be a sign that the regulator will be checking to see that trustees are undertaking proper record keeping and that there is clear separation of ownership, warns an auditor.

Speaking to SMSF Adviser, Hayes Knight director of SMSF services Ray Itaoui said that, as part of the 2019 tax return, SMSFs are required to record if they have any cyrptocurrency investments in their fund.

Reserve Bank resilient and ASC sails through, but Australia Post has work to do

5 July 2019
Credit: The Mandarin

The Reserve Bank and naval vessel manufacturer ASC have “effectively managed cyber security risks” but Australia Post has not, according to the latest report on public sector cyber resilience from federal auditor-general Grant Hehir.

“Australia Post has not effectively managed cyber security risks, and should continue to implement its cyber security improvement program and key controls across all its critical assets to enable cyber risks to be within its tolerance level,” says this week’s installment in the series, which is all about corporate entities.

Expert reveals pros and cons of paper versus online tax lodgement

25 June 2019

Many Aussies consider tax time to be a bit of a chore at best – but it doesn’t have to be so stressful.

According to Ben Johnston from leading Sydney accounting firm Willett Johnston Partners, taxpayers need to arm themselves with as much information as possible to avoid being stung by the Australian Taxation Office (ATO) and to increase their chances of scoring a tax refund.

ATO to use new tax return label for SMSF risk profiling

19 June 2019
Credit: SMSF Adviser

As previously reported by SMSF Adviser, the 2019 SMSF annual return contains a new label requiring tax agents or trustees to indicate whether Part A of the fund’s audit report was qualified.

While SMSFs were asked in previous years whether Part B of the audit report had been qualified, which is the section relating to the fund’s compliance, this is the first year funds will also need to answer if Part A was qualified.

Unreported ‘cash in hand’ payments to workers no longer tax deductible

18 June 2019
Credit: ATO

The Australian Taxation Office (ATO) today reminded employers that any unreported ‘cash in hand’ payments made to workers from 1 July 2019 will not be tax deductible.

‘Cash in hand’ refers to cash payments to employees that do not comply with pay as you go (PAYG) withholding obligations. Payments made to contractors where the contractor does not provide an ABN and the business does not withhold any tax will also not be tax deductible from 1 July.

ATO sounds deductions warning ahead of tax time

17 June 2019
Credit: Accountants Daily

Last year, the ATO released its first ever Individuals not in the business gap tax report, revealing an $8.7 billion gap caused primarily by incorrect claims for deductions for work-related expenses and omitted income.

With that in mind, the Tax Office has sounded a warning that it will be taking a closer focus on such deductions this year, particularly clothing and motor vehicle expenses.

ATO movement sparks audit, reviews concern

17 June 2019
Credit: My Business

RMS senior manager Tracey Dunn (pictured) told My Business’s sister publication Accountants Daily that recent Tax Office activity and the introduction of new regulatory measures point towards a spike in enforcement activity over the next few months.

Earlier this year, the government announced a fresh $1 billion funding boost to the ATO to extend the operation of the Tax Avoidance Taskforce and to expand the Taskforce’s programs and market coverage.

Don’t risk your integrity at the expense of client relationships

11 June 2019
Credit: Accountants Daily

Responding to an official enquiry instigated by the Australian Taxation Office (ATO) on behalf of your client can be time consuming. It is a frustrating time for your client and as their accountant, they look to you to help them respond to their situation. Having a proven tax audit insurance offering in place not only ensures that you are compensated for your time, it ensures that you will not need to pass on additional fees to your client – so you can put the needs of your client at first and foremost. 

Global collaboration needed to mitigate cyber threats

17 May 2019
Credit: Mortgage Business

The Australian Taxation Office (ATO) is ramping up its enforcement activities and will undertake 4,500 audits of taxpayers it considers are “high risk” because they overclaim or don’t declare income relating to rental properties.

ATO assistant commissioner Adam Kendrick said it would audit 2017-2018 financial year tax returns relating to rental investments that its data analytics systems had flagged as potentially problematic.

Employers hit with rolling SG audits as ATO toughens stance

28 March 2019
Credit: Accountants Daily

Employers are increasingly being subjected to a rolling series of audits by the ATO where they slip behind on their SG obligations as the Tax Office now taking a harder line on non-compliance, warns a technical expert.

Insyt chief executive Darren Wynen said the focus by the federal government on SG non-compliance has seen the ATO taking a much tougher approach towards non-compliant employers.

ATO ramps up its focus on rental properties and hosts on platforms such as Airbnb

21 March 2019
Credit: ABC News Australia

The Australian Taxation Office (ATO) is ramping up its enforcement activities and will undertake 4,500 audits of taxpayers it considers are “high risk” because they overclaim or don’t declare income relating to rental properties.

ATO assistant commissioner Adam Kendrick said it would audit 2017-2018 financial year tax returns relating to rental investments that its data analytics systems had flagged as potentially problematic.

Errors in 9 our of 10 rental claims prompt new compliance blitz


14 March 2019
Credit: Accountants Daily

ATO Commissioner Chris Jordan has signalled his agency’s intent to crackdown on rental property deductions after seeing dividends in their enforcement of work-related expenses.

Speaking at the Tax Institute’s National Convention in Hobart, ATO Commissioner Chris Jordan said the Tax Office’s audits of over 300 rental property claims found errors in almost nine out of 10 returns reviewed. According to Mr Jordan, 85 per cent of taxpayers with rental properties are represented by a tax agent.

ATO to knock on small business doors as benchmarks updated

5 March 2019
Credit: Sydney Morning Herald

The tax office has urged small businesses to use new small business benchmarks to track their performance against competitors, warning it will be knocking on the doors of 4000 companies between now and July to chase black economy activities.

The Australian Taxation Office’s updated benchmarks published on Tuesday draw information from 1.5 million small business tax returns to paint a picture of the typical margins and costs of sale for smaller operators.

An insurance solution that isn’t a gamble

27 September 2018
Credit: Accountants Daily

As the impact of government agency initiated action increases, the right insurance solution can safeguard accounting professionals against the increased risk of audits and stronger government scrutiny of their clients.

Government data matching across Australia has become very sophisticated. The amount of data readily accessible to the government is not only more than ever before, it is also more current and updated. With the introduction of One Touch Payroll and Super Stream, it would be fair to predict an explosion of government reviews of the Superannuation Guarantee Charge and compliance required with other accounting obligations for companies in the future.