How the ATO identifies wealthy individuals and their businesses

May 15th, 2019

The ATO uses sophisticated data matching and analytic models, drawing on tax returns and referrals from other government agencies or the community, to identify wealthy and high wealth individuals and link them to associated businesses. Given the importance of this group to community confidence in the tax and super systems, the ATO says it has [...]

Shortfall penalties reduced under new ATO initiative

May 14th, 2019

The ATO has heard from community and tax professionals that people should have a chance to correct their mistakes when they get their tax wrong, provided there isn’t dishonest intent behind their errors, and is taking a new approach that seems to be having positive effects. Under this new approach, if the ATO finds an [...]

Rental deductions: ATO audits to double

May 13th, 2019

The ATO has warned that it will increase its scrutiny of rental-related deductions this year. It says some people are still claiming travel to residential rental properties, but from 1 July 2017 taxpayers (aside from excluded entities) have no longer been permitted to claim tax deductions for travel expenses related to inspecting, maintaining or collecting [...]

Instant asset write-off with Budget changes now law

May 10th, 2019

Changes to the instant asset write-off rules have now become law, including measures recently announced in the government’s Federal Budget. The write-off has been extended to medium sized businesses (with aggregated annual turnover of $10 million or more, but less than $50 million), where it previously only applied to small business entities (with aggregated annual [...]

Super guarantee amnesty not yet law, but $100 million recovered

May 9th, 2019

The ATO has recovered around $100 million in unpaid superannuation from employers since the 12-month super guarantee amnesty was proposed on 24 May 2018, even though the law hasn’t yet changed to put the amnesty in place. At a Senate Economics Legislation Committee hearing in April, ATO Deputy Commissioner, Superannuation Mr James O’Halloran estimated that [...]

Guidance on when a company carries on a business

May 8th, 2019

With reduced company tax rates available for some businesses in recent years, and changes in eligibility for capital gains tax (CGT) small business concessions, it’s become increasingly important for us to understand how the law and the ATO deal with concepts like “small business entity” and “carrying on a business”. New guidance is now available [...]

Fringe benefits tax: rates, thresholds and ATO focus for 2019–2020

May 7th, 2019

The ATO has issued its annual rulings about rates and thresholds that apply for the new FBT year (1 April 2019 to 31 March 2020), including the benchmark interest rate, the cents-per-kilometre amounts for calculating the value of a fringe benefit from private use of a motor vehicle other than a car, the threshold for [...]

ATO to ramp up ABN investigations and cancellations

May 6th, 2019

As part of the ATO’s work to ensure the integrity of the Australian Business Register, it investigates the business activities of Australian Business Number (ABN) holders when it seems their ABN is no longer being used – for example, if business income isn’t being reported, or where the Australian Securities and Investments Commission (ASIC) deregisters [...]

Property used for storage an active asset for small business CGT concession purposes

April 17th, 2019

The Administrative Appeals Tribunal (AAT) has decided that a property a small business owner used to store materials, tools and other equipment was an active asset for the purpose of the small business capital gains tax (CGT) concessions. The taxpayer carried on a business of building, bricklaying and paving through a family trust. He owned [...]

ATO finds 90% error rate in sample of rental property claims

April 16th, 2019

ATO Commissioner Chris Jordan has advised that as part of the ATO’s broad random enquiry program, its auditors have recently completed over 300 audits on rental property tax deduction claims and “found errors in almost nine out of 10 returns reviewed”. The ATO is seeing incorrect interest claims for entire investment loans where the loan [...]

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