Tax Alert December 2023

The ATO is getting back to business.

The lenient approach taken by the ATO during the pandemic is over, with its focus now returning to traditional debt collection. With several key areas under the spotlight, some small businesses should consider taking advantage of the current amnesty to get their reporting in order. Here are some of the latest developments in the world of tax.

Reminder on late lodgement amnesty

If your small business is not up to date with its tax lodgements, it’s worth noting that the government’s current Lodgement Penalty Amnesty ends on 31 December 2023.

The amnesty allows small businesses to lodge any outstanding income tax and FBT returns or business activity statements (BAS) due between 1 December 2019 and 28 February 2022 without lodgement penalties being applied (general interest charges still apply).

Businesses with an annual turnover under $10 million when the original lodgement was due are eligible for the amnesty.

Warning on ATO’s ‘back to business’ focus

In recent speeches, the ATO has put small businesses on notice, stating that its lenient attitude during the pandemic is being replaced with a much tougher approach designed to re‑establish its traditional culture of ensuring taxpayers pay on time.

With collectable debt rising dramatically over the past four years, the ATO is returning to its normal debt collection stance and is taking firmer action with taxpayers.

Five areas the ATO is particularly focusing on are unpaid Super Guarantee Charge, debt arising from ATO audit adjustments, refund fraud, aged and high-value debts, and employers with new self-assessed debt.

Employer SG compliance under the microscope

The ATO is expanding its use of the information reported by employers through the Single Touch Payroll (STP) system in relation to the payment of employees’ Super Guarantee (SG).

Employers are required to make SG payments quarterly, and the ATO is now using STP and Member Account Transaction Service information to check whether an employer has paid on time.

The new checks will help the ATO follow up on non-compliant employers and prepare for the introduction of the new rules requiring employers to make SG payments at the same time as wages, which commence on 1 July 2026.

Sharing economy reporting expands

Businesses connecting customers with people who provide services or hiring personal assets through a website or app are increasingly being added to the Sharing Economy Reporting Regime (SERR).

Platforms providing taxi services (including ride-sourcing) and short-term accommodation were required to start collecting seller transaction information from 1 July 2023.

From 1 July 2024, all other sharing economy platforms will be required to start collecting and reporting personal and contact details, business information, and financial identifiers related to transactions twice a year to the ATO.

Tax residency test updates

A new one-stop-shop tax ruling to help people self-assess their residency for tax purposes has been released by the ATO to aid individuals working overseas or moving to Australia.

Taxation Ruling TR 2023/1 replaces older tax rulings with more contemporary guidance reflecting modern global work practices and recent court decisions. It also contains information on the 183-day residency test for people arriving on short-term work and holiday visas.

The tax office uses different rules than the Department of Home Affairs, meaning it is possible to be an Australian resident for tax purposes without being a citizen or permanent resident.

SMSF promoter scheme warning

The ATO is once again reminding trustees of self-managed super funds (SMSFs) to be wary of individuals promoting illegal schemes for early access to super.

Warning signs of an illegal scheme can include claims that you can access your super and use it for anything you want, charging high fees and commissions, and requesting your identity documents.

Anyone approached about these types of schemes should not sign any documents or provide any personal details and should immediately report the interaction to the ATO.

Keep your ABN details updated

Ensuring your ABN details are up to date on the Australian Business Register is an important requirement of being in business.

Without it, you could also miss out on valuable financial assistance or government information.

Emergency services and government agencies also use ABN details to identify businesses in areas affected by emergencies, so it’s important to keep your physical business and postal address current.