ATO’s Audit Budget

In April 2015, the ATO set up a new page on their website, ‘Building confidence’, which discusses compliance activities, as well as the amounts of tax and penalties which were collected in the previous year.

In the upcoming year, the ATO have stated that they intend on adjusting the tax system to suit those individuals who do the right thing, not for those few people who do not. Some of the focus areas of the ATO’s Audit Budget for this financial year will be:

  • Work-related expenses:
    o Overnight travel;
    o Motor vehicle expenses for travelling between home and work; and
    o The work-related proportion of use for computers, phones, and other electronic devices.
  • Rental property expenses:
    o Excessive deductions being claimed for holiday homes will be examined more closely. Deductions should be limited to the amount of income earned, or to the number of days actually rented out at a commercial rate;
    o Spouses/partners inappropriately splitting rental income and deductions for jointly owned properties; and
    o Interest deductions being claimed for the private proportion of loans.
  • Tax professionals failing their own obligations, such as lodging returns and paying liabilities
  • Cash economy:
    o The building and construction industry; and
    o The restaurant, café and takeaway industry.
  • Contractors – employers misusing contracting arrangements with the intention of avoiding employment overheads.

Ref: ATO website “Building Confidence”

This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.