The recent boost in funding for the tax office is set to bring about increased review activity, more ATO guidance, and expanded education campaigns.

Understanding how the ATO plans to enhance tax revenue in the future is vital for your business’s readiness. Here are our insights on the strategies the ATO might employ:

  1. Stricter Enforcement of Existing Laws: Expect further crackdowns based on existing legislation, such as ATO guidance on Division 7A and unpaid present entitlements. These changes will significantly impact SME businesses and their owners.
  2. Targeting Specific Taxpayer Groups: While large corporates remain a focus, private groups and high-wealth individuals will also face continued scrutiny through programs like the Top 500 and Next 5000.
  3. Bridging the Tax Gap: The ATO aims to address the largest tax gap segments, especially individual taxpayers and small businesses. Enhanced data-matching processes and education efforts will play a role.

What Can You Do to Prepare for an ATO Review?

  1. Record Keeping: Maintain excellent record-keeping systems to support your income reporting and expense documentation.
  2. Audit Insurance: Consider Tax Audit Insurance to cover professional fees during an ATO audit, reducing financial stress.
  3. Tax Governance: Review your tax governance processes to manage tax risks effectively, ensuring compliance with obligations.
  4. Assess Risk Frameworks:  Study ATO’s risk assessment frameworks related to your business to be well-prepared.

In Conclusion:

With potential tax reforms on the horizon, being prepared for increased ATO scrutiny is your best defence. Contact Holzworth Partners Accounting Team for advice on ATO reviews and Audit Insurance.