A surprise ATO review or audit of your tax returns can rapidly become a frustrating, costly and time-consuming process. Even seemingly simple queries can result in hours of paperwork for yourself or a legal professional. It’s important to remember that all taxpayers can be audited. The ATO has several recent focus areas that could potentially impact you as an individual, a business owner, or someone with a Self-Managed Super Fund (SMSF).
Halkin Business Partners offers clients the Audit Shield service, underwritten by AAI Limited (trading as Vero Insurance), a subsidiary of Suncorp Group Limited, as a vital tool in protecting you against the potential costs (fees) if you are subject to audit activity. Here are a handful of the ATO’s focus areas that may impact your chances of a tax audit.
- Work Expenses: The ATO pays close attention to work expense claims, as many excessive claims have been identified in the recent past. Keep your receipts and make sure you’re not taking liberties on your work expenses.
- Rental Properties: Management of rental properties are closely scrutinised by the ATO, including declaration of income from services such as Airbnb. Your capital works, capital assets, and other related expenses may be flagged for review.
- Single Touch Payroll (STP) and Superannuation: With the rollout of STP, the ATO now has a view of all businesses not yet meeting their requirements. Increased ability for compliance checks translates to increased likelihood of audits.
- BAS Reviews: While the ATO is encouraging the use of their online BAS check tool, these BAS Reviews remain one of the most reviewed areas in last-fiscal for the ATO.
- JobKeeper: To better support their customers during COVID-19, Audit Shield has recently extended their coverage to include audit and review of JobKeeper payments; the JobKeeper application process is not included in this additional coverage.
- Black Economy or Cash Economy: Businesses that regularly accept a large portion of their payments in cash should be aware that the ATO has certain benchmarks they use to flag a business as potentially not declaring all income.
- WorkCover: Work Cover claims accounted for a portion of Audit Shield service claims in all states over the 2019-2020 financial year. With the paperwork already involved here, it’s best to be protected.
Self-Managed Superannuation Funds
- Managing your super fund can be a savvy way to work towards retirement goals, but beware of the complexities of compliance requirements. Your fund’s risk, return, and investment liquidity could be investigated.
Also noteworthy is the extent of coverage available. Audit Shield also covers other items such as Income Tax, Fringe Benefits Tax and Land Tax to Stamp Duty. It’s always safer to hold protection against unwanted financial surprises, and now that sort of forward-planning can also be applied to your tax relationship with the ATO.
How can Halkin Business Partners help?
Speak to our tax specialists to see if Audit Shield would be beneficial to your tax situation. Our tax experts can also assist in tax planning and returns and ensuring that your financial portfolio is best structured to optimise returns and minimise tax pitfalls.