Contractors omitting income, small businesses misunderstanding major ‘bonus’ deductions, and dodgy GST make up the latest “hit list” for the Australian Taxation Office.
In its latest quarterly announcement, the ATO acknowledges most businesses are trying to do the right thing, but issued a warning to those who are skirting the rules.
“These are areas where we are concerned small businesses are getting it wrong, being opportunistic or deliberate on an ongoing basis,” ATO deputy commissioner Will Day said.
“Small business is serious business and by sharing these concerns with you early, we want to help you set up good habits to get it right and stay on track.”
According to the announcement, the tax office will focus on data matching to ensure contractors do not misrepresent their income, especially through using cash to hide some of the business’s income.
It is also pushing some small businesses from quarterly BAS reporting to monthly, which it said “will help build good business habits and improve cashflow”.
In a prior statement, the ATO said about 3500 small businesses with a history of non-payment, late or non-lodgement, or incorrect reporting, would be moved from quarterly to monthly GST reporting from April 1 to improve their compliance.
ATO was “encouraging self-amendment to correct errors and omissions” by small businesses who incorrectly made boost measure errors.
To help build these good habits, the ATO said businesses could use digital tools and business software, keep good records and get advice when needed.
The issues announced by the ATO are just a subsection of what they are currently cracking down on.
The tax office said it is also looking into small business capital gains tax concessions, mixing business and personal income, and GST reporting.
“We will also continue our focus on non-commercial business losses, small business capital gains tax concessions, business income is not personal income and GST registration and income of taxi, limousine and ride-sourcing services,” Mr Day said.