Menu

Latest News

ATO - Targeted Areas of Focus 2024-25

Share this article:

Key risk areas the ATO intends to focus on for Private Wealth in 2024–25.

.

ATO focus for private wealth

Our key areas of focus are based on the risks and issues identified through our intelligence collection, risk detection and analysis and case work. While we are focused on improving tax performance across all tax and superannuation compliance obligations for the privately owned wealthy groups population, these are the foundational, emerging and evolving risks and targeted focus areas where we are investing more resources.

Foundational issues

Registration, lodgment and payment

Registration, lodgment and payment risks and issues include:

  • not registering for obligations where required, or being registered under the incorrect basis (accounting basis or reporting cycle)
  • failure to lodge tax returns, fringe benefits tax (FBT) returns or activity statements when required
  • not paying tax debts on time and not engaging with us.

Incorrect reporting

Incorrect reporting risks and issues include:

  • incomplete reporting of returns, activity statements and schedules (including information labels such as shareholder loans, assets and liabilities)
  • omitted income and sales (income tax and GST)
  • incorrectly claiming GST credits
  • ineligible research and development (R&D) expenditure being claimed
  • ineligible R&D activities being claimed
  • incorrectly claiming base rate entity status.

Tax advisers and professional firms

Risks and issues with tax advisers and professional firms include:

  • failure to lodge own tax returns or business activity statements (BAS)
  • failure to lodge partnership returns or statements of distributions
  • failure to pay own tax debts on time
  • inappropriate allocation of professional firm profits (PCG 2021/4)
  • intermediaries (including R&D consultants) encouraging aggressive tax arrangements or promoting tax avoidance or exploitation schemes.

Division 7A

Division 7A risks and issues include:

  • unreported shareholder loans
  • non-complying loan agreements
  • failure to make minimum yearly repayments or not applying the correct benchmark interest rate
  • inadequate record keeping
  • section 109R loan repayment arrangements including loans repaid just before the private company’s lodgment day with the intent to reborrow similar or larger amounts from the same company
  • requests for section 109RB discretions.

Capital gains tax (CGT)

CGT risks and issues include:

  • eligibility criteria when claiming small business CGT concessions
  • inappropriate calculations of the CGT discount
  • using the small business restructure rollover (Subdivision 328-G) incorrectly, including for reasons other than a genuine restructure of an ongoing business
  • capital losses from related party transactions (market value substitution rule)
  • incorrect application of Division 855 (non-resident access to concessions).

Property and construction

Risks and issues related to property and construction include:

  • capital versus revenue misclassification on disposal of real property
  • omission of income on disposal of real property
  • failure to lodge or report sales or GST on income tax returns or BAS as identified by the taxable payments reporting system
  • misreporting or underreporting of GST for real property
  • failure to meet GST reporting obligations for real property
  • failure to meet GST registration obligations for real property.

International transactions

Risks and issues related to international transactions include:

  • intangible migration arrangements
  • mischaracterisation of service transactions which results in mispricing and creates risk from a corporate residency and controlled foreign companies' perspective
  • withholding tax compliance
  • significant global entity compliance
  • related-party financing (including concerns with the use of non-commercial terms to push up financing costs in the property and construction industry).

Other domestic transactions

Risks and issues related to other domestic transactions include

  • non-arm’s length income in self-managed super funds
  • misinterpretation or disregard for family trust elections
  • residents not including distributions from foreign trusts (section 99B)
  • franking account balance discrepancies
  • 45 day holding rule (franking credit integrity rules).

Emerging or evolving risks and issues

Incorrect reporting

Emerging or evolving risks and issues with incorrect reporting include:

  • trusts over-claiming deductions that inappropriately reduce trust net income
  • increasing lodgments in industry sectors where R&D activities and expenditure may not be eligible
  • incorrectly claiming GST credits on employee allowances
  • incorrectly claiming GST refunds without sufficient evidence to substantiate claims.

CGT

Emerging or evolving risks and issues with CGT include:

  • Division 149 (pre-CGT asset)
  • reduction in capital gains and losses arising from CGT events in relation to certain voting interests in active foreign companies (Subdivision 768-G).

Other emerging areas

Other emerging or evolving risks and issues are:

  • inappropriate use of income tax exempt vehicles, including ancillary funds, to access tax concessions and private benefits where there is no entitlement
  • trust loss trafficking (inappropriate generation and use of losses)
  • share buyback arrangements
  • thin capitalisation rules
  • cryptocurrency based business models
  • possible passage of the Better Targeted Superannuation Concessions measure (yet to be re-introduced post-election).

Targeted focus areas

Succession planning

We continue our focus on risks that are arising in relation to the ageing demographic and succession planning.

We have seen an increase in succession planning activities as private groups restructure, dispose of assets or transfer wealth. This may be through mature family-controlled businesses being sold or passed onto the next generation, or the accumulated wealth from those businesses being transferred.

Transactions we commonly see that facilitate succession planning can include:

  • assets being moved around the group
  • family member interests being restructured
  • concessions, exemptions and rollovers being accessed
  • loans to shareholders or associates settled (Division 7A loans)
  • trusts being used to transfer wealth.

For more information, see Succession planning tax risks.

Private equity

A targeted focus area is the risk across the life of the private equity investment, including all private equity participants (firms, funds, target entities and investors) at different stages of the private equity lifecycle (pre-acquisition, acquisition, holding, pre-exit and exit).

Retirement villages

Targeted focus areas for retirement villages include:

  • reviewing the GST and income tax through the retirement village cycle
  • incorrect application of GST-free provisions
  • incorrect application of Division 135 (supplies of going concern)
  • related-party transaction and incorrect valuations between related parties
  • contentious land-lease structure.

GST focus areas

From a GST perspective, we're focusing on our 2 largest industries, retail and construction.

Retail

Our retail focus includes:

  • transactions between entities within the same private group
  • errors arising from systems with poor controls
  • omission of income from sales
  • misclassification of vouchers sales and warranty payments
  • claiming input tax credits for non-creditable acquisitions
  • failure to meet GST reporting obligation
  • failure to meet GST registration obligations.

Construction

Our construction focus includes:

  • misclassification of commercial adjustments such as contract variations
  • omission of income from sales
  • transactions between entities within the same private group
  • failure to lodge or report sales or GST on BAS as identified by the taxable payments reporting system
  • misreporting or underreporting of GST for construction sales or payments to suppliers, employees or contractors
  • failure to meet GST reporting obligation
  • failure to meet GST registration obligations.

 

 

 

ato.gov.au

Share this article:

Poletto Accounting Logo

ABN: 34 649 360 378

Liability limited by a scheme approved under Professional Standards Legislation.

Lawrence Poletto

Lawrence Poletto, Principal of Poletto accounting is a Fellow of CPA Australia, holds a Bachelor of Commerce (JCU) and has over twenty years’ experience in Commercial and Public Practice.
With this experience, Lawrence can assist with all accounting and taxation needs to help clients start and grow their business. Lawrence deals with clients from all walks of life, working with diverse client base across a wide range of Industries. He builds strong trusted relationships and support clients in their times of need.

Lawrence can assist with all Tax and Accounting for small to medium business including assistance and guidance with setups, ongoing support including cloud-based accounting, budgeting, performance monitoring, support for loan applications and more.

Lawrence enjoys working with business owners who are seeking taxation, accounting, or business advice from a trusted professional. The more certainty he can provide his clients, the more they can focus on their business. Clients appreciate Lawrence’s professional and approachable manner.

At Poletto Accounting you will be one of only a limited group of equally important business clients and will always receive prompt, personal service.

We believe in Fixed price packages with easy payment option’s so you know exactly what you’ll be paying.

Contact Poletto Accounting to get a complimentary tax review, to see how we can help you and to get a second opinion on where you are with your business and taxes.

Business Tax

Poletto Accounting provides a full range of business accounting services for small to medium-sized businesses. We work collaboratively with business owners to meet your reporting requirements and regulatory payments and to help you achieve your financial and business goals.

We can assist through:

  • Income Tax Planning & Strategies
  • Preparation of all Business Income Tax Returns and associate Reporting
  • Goods & Services Tax (GST) review
  • BAS compilation and lodgement
  • Small business concessions calculations and advice
  • Liaising and negotiating with the Australian Taxation Office (ATO)
  • Assistance in formation and set-up of companies, trusts and partnerships
  • Corporate secretarial services – ASIC requirements

All clients are provided with an Annual Tax Planning Meeting opportunity.

Contact Us

Business Start Up

We can assist in setting up your new business, provide business advice and planning to give your Business its best chance of success. We can guide you on the following:

  • Decide on the most suitable structure for your business – sole trader, partnership, trust or company
  • Prepare a business plan, cashflow projections, budgets, and trading forecasts
  • We take care of all your legally required registrations such as registering a business name and applying for an Australian Business Number and Tax File Number. You may also need to register for GST and PAYG withholding, workers compensation and more and we’ll let you know if these apply to you
  • Complete registration procedures with Australian Securities and Investments Commission
  • Set up your software and bookkeeping systems

We offer Fast and easy setup for your new business.

Contact Us

Cloud Accounting & Bookkeeping

Need help with your cloud accounting and Bookkeeping system? Not sure which program is best for your business? We can assist with all your cloud accounting needs, whether its Xero or other software.

Poletto Accounting is a Certified Xero Silver partner and can assist with:

  • Assistance with Cloud Software selection and implementation
  • Set-up and installation of XERO, MYOB, Quickbooks and other Accounting Packages
  • We can assist with recommending Bookkeeping Services that will suit your business
  • We also can work with your existing bookkeeper to ensure the most efficient and effective recording of your data and will improve the efficiency of the year-end compliance process

We can help give back time and resources you need to focus on growing and developing your business.

Contact Us

Fixed Price Guarantee

Poletto Accounting believe clients deserve certainty around their accounting services.

Fixed Fee accounting gives you the reassurance of no nasty surprises during the year and a clear understanding of the service.

We won’t charge “on the clock” and you won’t receive unexpected Invoices.

We'll determine your requirements upfront so that you have certainty of cost.

We don’t charge for basic support, emails and phone calls.

Contact Us

ASIC Corporate Compliance

We will make sure your business/company meets all its obligations to ASIC (Australian Securities & Investments Commission).

We can assist with:

  • Preparation of annual company statements
  • Attending to ASIC returns and regular filings on your behalf
  • Any company changes or change of directors
  • Business name registrations and maintenance
  • Renewal of business name/s and other registrations
  • Preparing meeting minutes and drafting resolutions
  • Provision of registered office services for service of notices
  • Preparing minutes and drafting resolutions
Contact Us

Company and Trust Establishment

We offer a personalised service in relation to the establishment of structures for new and existing businesses.

This includes Trusts & Companies to provide suitable asset protection whilst having the best possible tax outcomes.

Each new business is different and your individual circumstances needs to be considered.

If you need advice or help with your decision about your business structure, reach out to arrange a consultation.

Contact Us

Tax Diary

General Calculators

 

Accounting Videos

Secure File Transfer

Secure File Transfer is a facility that allows the safe and secure exchange of confidential files or documents between you and us.

Email is very convenient in our business world, there is no doubting that. However email messages and attachments can be intercepted by third parties, putting your privacy and identity at risk if used to send confidential files or documents. Secure File Transfer eliminates this risk.

Login to Secure File Transfer, or contact us if you require a username and password.

Disclaimer

Every effort has been made to offer the most current, correct and clearly expressed information possible within this site. Nonetheless, inadvertent errors can occur and applicable laws, rules and regulations may change.

The information contained in this site is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Users should not act or fail to act on the basis of information contained herein. Users are encouraged to contact Poletto Accounting or their own Advisor for Advice concerning a specific matter before making any decision.

Terms & Conditions

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nullam velit nisi, rutrum sed tristique vel, congue nec dui. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Etiam non ante eu augue finibus gravida ac vel risus. Aenean fringilla cursus ipsum, mattis posuere enim dignissim vitae. Nulla facilisi.

Donec ac varius tellus. Integer ultricies placerat augue, vel cursus lorem euismod eget. In ex tellus, egestas eu dui eu, lobortis hendrerit est. Donec libero est, placerat et blandit non, fermentum a risus. Morbi aliquam lobortis mauris ut tincidunt. Aenean sollicitudin metus nec nulla lobortis consectetur.

Privacy Policy

Poletto Accounting is committed to providing quality services to you and this policy outlines our ongoing obligations to you in respect of how we manage your Personal Information.

We have adopted the Australian Privacy Principles (APPs) contained in the Privacy Act 1988 (Cth) (the Privacy Act). The NPPs govern the way in which we collect, use, disclose, store, secure and dispose of your Personal Information.

A copy of the Australian Privacy Principles may be obtained from the website of The Office of the Australian Information Commissioner at https://www.oaic.gov.au/.

What is Personal Information and why do we collect it?

Personal Information is information or an opinion that identifies an individual. Examples of Personal Information we collect includes names, addresses, email addresses, phone and facsimile numbers.

This Personal Information is obtained in many ways including correspondence, by telephone and facsimile, by email, via our website www.polettoaccounting.com.au, from your website, from media and publications, from other publicly available sources, from cookies and from third parties. We don't guarantee website links or policy of authorised third parties.

We collect your Personal Information for the primary purpose of providing our services to you, providing information to our clients and marketing. We may also use your Personal Information for secondary purposes closely related to the primary purpose, in circumstances where you would reasonably expect such use or disclosure. You may unsubscribe from our mailing/marketing lists at any time by contacting us in writing.

When we collect Personal Information we will, where appropriate and where possible, explain to you why we are collecting the information and how we plan to use it.

Sensitive Information

Sensitive information is defined in the Privacy Act to include information or opinion about such things as an individual's racial or ethnic origin, political opinions, membership of a political association, religious or philosophical beliefs, membership of a trade union or other professional body, criminal record or health information.

Sensitive information will be used by us only:

Third Parties

Where reasonable and practicable to do so, we will collect your Personal Information only from you. However, in some circumstances we may be provided with information by third parties. In such a case we will take reasonable steps to ensure that you are made aware of the information provided to us by the third party.

Disclosure of Personal Information

Your Personal Information may be disclosed in a number of circumstances including the following:

Security of Personal Information

Your Personal Information is stored in a manner that reasonably protects it from misuse and loss and from unauthorized access, modification or disclosure.

When your Personal Information is no longer needed for the purpose for which it was obtained, we will take reasonable steps to destroy or permanently de-identify your Personal Information. However, most of the Personal Information is or will be stored in client files which will be kept by us for a minimum of 7 years.

Access to your Personal Information

You may access the Personal Information we hold about you and to update and/or correct it, subject to certain exceptions. If you wish to access your Personal Information, please contact us in writing.

Poletto Accounting will not charge any fee for your access request, but may charge an administrative fee for providing a copy of your Personal Information.

In order to protect your Personal Information we may require identification from you before releasing the requested information.

Maintaining the Quality of your Personal Information

It is an important to us that your Personal Information is up to date. We will take reasonable steps to make sure that your Personal Information is accurate, complete and up-to-date. If you find that the information we have is not up to date or is inaccurate, please advise us as soon as practicable so we can update our records and ensure we can continue to provide quality services to you.

Policy Updates

This Policy may change from time to time and is available on our website.

Privacy Policy Complaints and Enquiries

If you have any queries or complaints about our Privacy Policy please contact us at:

enquiries@polettoaccounting.com.au

0417 913 544