The ATO is due release its annual compliance program, detailing its targets for the 2014 financial year for all taxpayers including individuals, business and superannuation funds, taking special interest at the rich as part of its crackdown on undeclared overseas bank accounts and income:
- For individuals, experts expect a Tax Office focus on property investment, armed with significant reams of data from state tax authorities who have come online through ATO’s property data matching initiative. The focus will be to catch out deliberate or inadvertent misreporting of property ownership and earnings, and flagging capital gains elsewhere.
- Private company loans could be a target with The Board of Taxation reviewing laws relating to private company loans, which are notoriously complex. This is touted to remain in place for years to come with litigation and cases coming out of it. It’s an area that affects family businesses in particular. As most small businesses are unincorporated, they are commonly hit.
- The benchmarking of various industries in order to catch those trading in cash to continue.
- A new focus could be agriculture and farming, as the Australian dollar begins to fall and businesses look to use losses accumulated during the rough financial crisis and following years.
- Multinational businesses are a key audit and review target in a bid to combat tax minimisation, with ATO pledging to check operations on the ground to ensure they match the tax effective structures set down on paper and cracking down on offshore marketing hubs that are used to slash tax bills.
What should taxpayers do?
- Maintain proper records, particularly regarding cash transactions
- Keep detailed records on large transactions that are not taxable e.g. transfers from overseas or sale of the family home
- Consider audit insurance to insure you against the cost of accountants, tax agents, bookkeepers and solicitors putting together a case to support your position
- To minimise the likelihood of you being the target of an ATO audit or review this year call our friendly team at OBT on 5462 2277 for a preventative review of your tax affairs.