The ATO has warned businesses not staying up to date with their obligations that it may impact their eligibility for future stimulus measures, as the Tax Office readies to recommence its work to address key risks to the tax and super system.

While the Australian Taxation Office will continue to focus on implementing government stimulus measures, including those announced in the federal budget, it will shortly recommence its work to address key risks to the tax and super system.

Speaking at an event hosted by Chartered Accountants Australia and New Zealand, Deborah Jenkins, deputy commissioner of small business, said that businesses doing well need to resume their obligations, while those facing ongoing hardship are encouraged to get in contact with the ATO.

“Because it is hard for us to identify who is still impacted, we need to return to a normal setting for our work program. It’s not as simple as applying postcode logic — for obvious reasons. In bushfires, we can use this approach to support impacted businesses,” Ms Jenkins explained.

“We have recommenced and adapted our strategies to address compliance risks, being very conscious of the impacts still being faced by many businesses.”

Since 1 September, the ATO has stopped providing blanket extensions to small business audit cases and has recommenced activity where the business is either not adversely impacted by COVID or is now in a position to progress.

“I want to emphasise that we will continue to be empathetic to each client’s situation and provide additional time if they need it,” Ms Jenkins said.

Looking ahead, she said that the ATO will be resuming its review and audit programs addressing shadow economy behaviour. 

“We will be continuing our use of taxable payments reporting system data to check that contractors in a range of industries are lodging and meeting their income tax and GST obligations in full,” Ms Jenkins said.

“Taxable payments annual reports (TPAR) data allows us to match the payments reported by payers to contractors (payees) income tax returns to identify where contractors may have omitted income.

“We have also been piloting a nudge approach where we have contacted some contractors ahead of their 2020 tax return lodgement to remind them to include their TPRS reported income this year.”

Moreover, from November 2020, the ATO will be contacting tax agents and their clients who are contractors in the cleaning, courier and building and construction industries and may not have included all of their income in their 2019 tax return.

“We will be using a combination of emails and phone calls to contact tax agents in advance of their clients receiving letters,” Ms Jenkins continued.

In regard to the ATO’s shadow economy program more broadly, she revealed that some strategies are being reconsidered as some of the previous approaches, like visiting businesses in person, are unlikely to be possible in the coming year. 

She said: “We will continue to use a combination of review and audit programs, delivering help and education and building community awareness of our work to address the shadow economy — we will just need to do things a little differently.

“We are also applying agent-focused strategies to the black economy by taking the insights generated through our tax practitioner model and identifying agents with higher than normal levels of black economy risk in their client base.”

Other areas the ATO will be closely monitoring are loss claims and unreported fund extractions from small-business companies.

“We are currently overhauling our GST high-risk refund models to enable us to more effectively detect and action high-risk refunds before payment,” she said.

“Our broad focus now beyond the specific risks we are focused on is ensuring people are staying in the system. Businesses need to be lodging, and if they can pay, they should. Those who still need help just need to contact us and we will be here to support them. But we are conscious that many businesses are doing well, so we need to be reminding them to meet their obligations.”

Maja Garaca Djurdjevic
02 November 2020 2
mybusiness.com.au