Author: Scott Harrington, Partner Business Advisory

Every year, the ATO publishes a summary of key areas it will focus on when reviewing tax lodgements. While some issues remain consistent year after year, there are always specific areas that attract closer scrutiny. This year, ATO’s focus ranges from foundational compliance issues to emerging risks and targeted areas of concern.

In recent discussions with William Buck, the ATO reinforced that it is shifting from the supportive role with businesses during the COVID years, back to their key role as a revenue collection agency for the Government. Businesses should expect greater difficulty in obtaining lodgement extensions and having interest on late payments waived. This may be a surprise for those used to a more lenient approach in the past.

If you are unable to pay, the ATO advises contacting them as early as possible.

Here are the main areas of attention for businesses and individuals to ensure compliance and accuracy in their tax obligation:

1. Registration, Lodgement, and Payment

Ensuring businesses are correctly registered for all obligations, particularly FBT registrations and timely lodgement of BAS.

2. Incorrect Reporting

Addressing incomplete reporting of returns, activity statements, and schedules to ensure all income and sales are accurately declared for income tax and GST.

As in previous years, the ATO remains focused on the validity and integrity of R&D lodgements.

3. Work-Related Expenses

Verifying claims, especially those related to working from home, with increased substantiation requirements and stricter limitations on other deductible expenses.

4. Rental Property Income and Deductions

Ensuring landlords correctly differentiate between repairs and maintenance versus capital improvements to prevent inflated claims.

5. Capital Gains Tax (CGT)

Given the complexity of small business CGT concessions, the ATO will review eligibility criteria for these claims.

6. Cryptocurrency Transactions

With continued growth in crypto investments, the ATO is expanding its dataset of crypto trades and enhancing data matching to ensure taxpayers report capital gains correctly.

7. Debt Collection and Fraud Prevention

The ATO is strengthening its debt collection efforts and reinforcing measures to counter fraud.

8. Sharing Economy Income

Similar to cryptocurrency, the ATO is expanding its dataset of online platform transactions, including ridesharing, delivery, and rental services, to detect omitted income.

If you would like support in considering and addressing any of the areas outlined above, please contact your local William Buck advisor.

Author: Scott Harrington, Partner Business Advisory