Money
Issue No. 19 - October/November 2004
Taxing Times
Tax Matters - keeping you up to date
by John Rawson
ATO compliance blitz zeroes in on business
Businesses should be on alert following the unveiling in August of the Commissioner of Taxation‘s compliance plan for the 2004-5 year.
Under the ATO‘s compliance program, there will be a particular concentration on employers who fail to meet their tax obligations, medium-sized businesses whose tax performance is out of kilter with their economic performance and self-managed superannuation funds. The ATO‘s focus will differ depending on the market segment.
There are around 10.2 million taxpayers in the Individual category, who contributed 45 percent of tax revenue in the 2003-04 year.
In this financial year, one area of focus will be in ensuring all dividend, interest and employment income is included. In 2002-03, the ATO investigated 265,547 discrepancies.
Rental income and deductions will also come under scrutiny, with the ATO this year intending to send letters to 37,000 taxpayers prior to lodgment and to audit 4600 taxpayers.
The ATO is also taking aim at work-related expenses. The road transport, real estate, entertainment, airline, financial advice and travel industries will be targeted and the ATO plans to write to more than 200,000 taxpayers, ask 35,000 taxpayers to provide more information and conduct 12,000 audits.
The Commissioner of Taxation noted that, last year, the average deduction claimed for work-related expenses was $1500.
Capital gains compliance will be beefed up, with increased data matching in the CGT area as part of 3800 reviews and 2500 audits.
In addition, the ATO expects to conduct 37,000 reviews in the area of high risk refunds, eg resulting from high levels of tax withheld from salary and wage income.
International tax issues of individuals are in the ATO‘s sights, for example non-disclosure of offshore income and the use of offshore self-managed superannuation funds and aggressive tax planning. The AT...
