The costs associated with an ATO (or other government body) audit can be substantial depending on the volume of information required to be provided and the level of subsequent follow up demanded.
ATO has advised that audit activity will increase and significant additional government funds have been allocated for this purpose. We have certainly seen indications of more random reviews and audits over the last year in our business for both individuals and small business.
The ATO target areas are:
- Employee work related deductions including vehicle, travel, internet and mobile phone, clothing and laundry.
- The cash economy, particularly unreported income – a risk for businesses that fall outside the ATO industry benchmarks and for individuals whose lifestyles appear to be beyond their reported earnings.
- Employer obligations including payment of PAYG withholding and superannuation from information gathered from Superstream and Single Touch Payroll.
- SMSF Trustees
It’s also much easier now to compare individual taxpayers with others in similar occupations and income brackets to identify higher-than-expected work related expense claims.
Nortons offers Audit Shield insurance to combat the costs of unplanned professional fees which can arise as a result of initiatives instigated by the ATO and other government revenue agencies.
The major benefit of this service is it offers a cost effective way to alleviate the cash flow stress that can be imposed by audit activity. The payment for this service is tax deductible and the cover is retrospective, so previously lodged returns are covered automatically.
Contact Edward George, our Practice Manager on 6372 6444 to find out more.