Every year, the ATO publishes a summary of the areas that they will focus on when reviewing your tax lodgements. While some of these are similar issues each year, they often have specific areas that are sure to get attention in your lodgements if you fall within the ATO’s scrutiny. This year, their focus ranges from foundational issues to emerging risks and targeted areas.
In recent discussions with William Buck, the ATO have also reinforced that they are transitioning from the supportive role with business during the COVID years back to what they see as their key role of being a revenue collection agency for the Government. As such, we have been told to expect it to become much harder to get extensions of time to lodge and interest on late payments remitted. This will be a shock to some businesses who have become used to the more relaxed approach.
If you are unable to pay, the ATO advises you to contact them as early as possible.
In 2024, the Australian Taxation Office (ATO) has also outlined several key focus areas for businesses and individuals to ensure compliance and accuracy in their tax obligations. Here are the main areas of attention:
1. Registration, lodgment and payment
Ensuring businesses are correctly registered for all required obligations. In particular, the ATO is looking at FBT registrations and timely lodgement of Business Activity Statements.
2. Incorrect reporting
Addressing incomplete reporting of returns, activity statements and schedules, ensuring all income and sales are reported accurately for income tax and GST purposes.
As in previous years, the ATO is also focused on ensuring the validity and integrity of the R&D lodgements.
3. Work-Related expenses
Verifying claims for work-related expenses, especially those related to working from home, with the rules relating to substantiation of working from home hours increased in recent years and the limitations of other expenses that you can claim also limited.
4. Rental property income and deductions
Every year the ATO continues to monitor claims for rental property expenses to ensure they are not inflated. In the current year, the ATO is concentrating on making sure landlords correctly differentiate between repairs and maintenance and capital improvements. We cover the ATO’s stricter stance on landlords in our article here.
5. Capital Gains Tax (CGT)
As the small business CGT concessions are complex, the ATO will review the eligibility criteria that are met when claiming the concessions.
6. Cryptocurrency transactions
With the continued growth in Crypto investments, the ATO is continuing to build its dataset of crypto trades, which means it will be increasing its data matching capabilities to ensure that taxpayers include the gains made on the sale of cryptocurrencies.
7. Debt collection and Fraud prevention
As noted above, the ATO will strengthen its debt collection efforts and enhance its measures to counter fraud. Our article on the ATO’s stricter stance on compliance dives deeper into its debt collection focus.
8. Sharing economy income
As with cryptocurrency, the ATO has confirmed to William Buck that they are continuing to build their dataset of information from online apps, including ride-sharing, delivery and rental apps. They will focus their reviews on omitted income compared to the activities completed on the apps.
The ATO has noted that by focusing on these areas, they aim to improve tax compliance and ensure businesses meet their tax obligations accurately and timely.
If you would like support in considering and addressing any of the areas outlined above, please contact your local William Buck advisor.
