In the current environment where Government expenditure and revenue collection is being challenged, it is clear the ATO will be the weapon of choice used to help balance the books.
Trusts, profit shifting and e-commerce are some of the areas targeted by the ATO for review in this financial year.
With the release today of “Compliance in focus 2013-14”, the ATO has highlighted areas which it will focus on in its review and audit activity. As a result, business should brace itself to spend more time and money in dealing with ATO compliance activities.
“What this means is that business should prepare itself for increased contact with the ATO,” said Vince Tropiano, Tax partner with Grant Thornton.
“Today we have heard changes to FBT on cars announced that will increase compliance and administration costs. At the same time, business is told it really has no choice but to spend even more time reviewing and confirming all its tax obligations to ensure that it has mitigated all its potential tax risks.”
Mr Tropiano says no area of business is spared from this examination.
“There are approximately 1,300 large or multinational businesses, each with over $250 million turnover. This group will be subject to some 250 risk reviews (plus up to another 125 in the area of profit shifting), 70 audits and 50 pre lodgement compliance reviews.
“And it’s not just the big end of town. 1,000 reviews and audits will be targeted at medium enterprises (those up to $250million turnover), while a further 2,500 will be contacted to verify information or provide advice. Some 30,000 GST registration checks will take place, and almost 18,000 PAYG withholding reviews will be conducted. In addition, compliance activity in the areas of individuals, FBT and superannuation are also highlighted.”
Furthermore, the ATO has established a new taskforce to examine the use or misuse of trusts as a business vehicle. While in many cases, trusts are used by small business or family groups as a legitimate business vehicle, they now have some 5,000 data matching reviews to look forward to, as well as some 700 income tax reviews and audits over the next four years.
“Regardless of the size of organisation, we are encouraging all taxpayers to get on the front foot and ensure that their tax risk and exposure is low. If any issues exist, it’s best to find them and fix them before getting a call from the ATO. The prudent course of action for any board or business owner is to conduct a regular examination of your tax profile."
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To speak with Vince or for more information, please contact:
Helina Lilley
National Public Relations Manager
T +61 2 8297 2421
M 0437 725 520
E helina.lilley@au.gt.com
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