During the height of COVID-19 last year, the Australian Taxation Office (ATO) decided to pause its debt recovery, resulting in a $1.3 billion shortfall when compared to its compliance revenue target. Business accountants and their clients can expect to see this change over the coming months, as a restart to compliance-related activities took place at the end of last year. Already, the ATO has started to increase contact, with more robust enforcement set to follow the finalisation of JobKeeper in late March.
Last week’s Self Managed Super Fund (SMSF) Association national conference 2021 also noted a shift in the ATO’s approach, with its new ‘three strikes and you’re out’ compliance campaign set to encourage 80,000 funds to lodge their late returns.
According to The Institute of Public Accountants’ general manager of technical policy, Tony Greco, businesses and their business accountants should be ready to hear from the ATO more. “The GFC [Global Financial Crisis] effectively told the ATO that they can’t stop everything for too long because the debt problems become more sizeable down the track,” Mr Greco said.
“Government assistance is still ongoing, and we’ve all told [the ATO] it has to be a tailored approach and if someone is still receiving JobKeeper, for example, you know it is going to be pointless pushing them on debt. The issue is how they identify which business isn’t struggling and which one is once JobKeeper ends, and obviously, we encourage them to go to their intermediaries like tax agents to ascertain what the situation is before they go full-on re-engaging.”
The ATO would have to assess things on a case-by-case basis once JobKeeper comes to an end. We urge business owners to get their books in order ahead of this increased ATO activity.
The information in this article is general in nature and might not be right for your circumstances. Please arrange a meeting with one of our Accountants to discuss your particular needs. Accountants 2 Business Ph (07) 3823 2344