The Federal Government has provided the ATO with over a billion dollars in additional funding to undertake audit activity this year. It is anticipated that hundreds of thousands of Australian will receive letters from the ATO, requiring them to show extensive evidence of any deductions claimed.
The ATO will be targeting people who claim work related expenses, business deductions and rental property deductions.
The ATO have been encouraging people to abandon their registered tax agent and to prepare their income tax return by themselves. At the same time , the ATO has doubled down their audit activity targeted at “self-preparers”. There are a number of reasons for this.
By discouraging the use of a tax agent, the taxpayer cannot claim their tax agent’s fees and related deductions such as travel to their tax agent, phone calls and other costs related to using the services of your tax agent. This will result in billions of dollars in additional tax revenue for the ATO.
Additionally self-preparers are at a high-risk of making errors in their tax return, particularly given the complexity of taxation law. Many taxpayers will under claim what they are entitled to, or alternatively, will over claim, which exposes them to the risk of an audit and severe penalties.
Receiving an audit from the ATO can be an intimidating and stressful situation and taxpayers are regularly unaware of their rights or how to present evidence in support of their claims. Consequently self-preparers are often the target of any ATO audit activity. On numerous occasions, self-preparers have been denied thousands of dollars of legitimate tax deductions by the ATO, plus significant penalties and interest charges.
The best way to protect yourself or your business during tax time is to engage the services of a professional and reputable tax agent, such as those at Best Business Practice. For a modest and reasonable tax deductible fee, this will significantly lower your risk of an ATO audit, or if you are the subject of an audit, you will have the protection of a highly-experienced, CPA Accountant to provide you with support and defend your position against the ATO.
At Best Business Practice, we specialise in personalised business advice, self managed superannuation funds and individual tax returns. We are also able to provide financial strategies and wealth creation advice. We provide businesses with annual tax planning advice, business benchmarking and KPI analysis. Our energy and focus is spent helping individuals, families and small business owners from Brisbane to the Gold Coast build a better, more profitable and valuable business.
If you need help preparing your annual income tax return, responding to an audit or objecting to an ATO audit decision, contact our friendly accountants at Best Business Practice on (02) 6672 6700.