Client Alert for November 2012

ATO benchmarking can be improved: report

The Inspector-General of Taxation's report into the ATO's use of performance benchmarks to target small businesses who may not be reporting all their income has been released by the Government and it says that improvements can be made.

The report was sparked by concerns raised by tax practitioners and their clients concerning the ATO's use of the benchmarks. The ATO uses the benchmarks to compare the performance of businesses with similar businesses in the same industry. One purpose of the benchmarking is to help identify potential cases for audits, with a particular focus on unreported cash transactions.

The report made 11 recommendations for the ATO to improve its use of the benchmarks, which the ATO has largely accepted. According to the Government, the recommendations should improve the ATO's risk identification and audit selection processes to further exclude compliant businesses from audits, thereby minimising unnecessary compliance costs in relation to the cash economy and GST obligations.

TIP: Reporting more net income than industry peers could be a sign that a business might have forgotten to claim a business deduction. However, reporting significantly lower income than industry peers would attract ATO attention.

Living-away-from-home concessions: new laws

TIP: The changes raise significant issues for affected employers and employees. If you have any questions, please contact our office.

Contractual promises can have GST implications

Contractor payments undergo ATO data-matching

TIP: The ATO says its matching capabilities have grown strongly over the years. This financial year, the ATO expects to match over 600 million transactions.

Property developers and GST under ATO spotlight

ATO warning on dodgy offshore emission unit schemes

Excess super contributions: once-only refund offer

TIP: The refund offer provides some relief, but is not without conditions and limitations. Please contact our office for further information.

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