Source: The Australian

As we usher in a new year, it’s crucial for businesses to stay informed about the Australian Taxation Office’s (ATO) latest focus areas. Recently, the ATO has shed light on five key types of business debts that are under intense scrutiny. This marks a shift from the more lenient approach adopted during the pandemic, signaling a return to stringent pre-COVID compliance measures.

1. Unpaid Superannuation Guarantee Charge (SGC): 

Topping the list is the unpaid SGC. Many small businesses contribute to the staggering $1.8 billion in overdue superannuation guarantees. The ATO is not holding back, employing a range of measures like garnishee notices and Director Penalty Notices to recover these debts. Remember, non-compliance can have severe implications.

2. Self-Assessed Debts by Employers: 

The ATO is keeping a close eye on newly reported debts by employers. Delaying payments until nudged by the tax office isn’t a wise strategy. It’s vital to proactively manage your debts and ensure compliance without waiting for a prompt from the ATO.

3. Refund Fraud: 

Alarmingly, fraudulent GST refund claims have siphoned billions from the tax system. The ATO is ramping up its efforts to thwart such activities with advanced detection tools. It’s a stern reminder to stay clear of such fraudulent practices.

4. Major, Longstanding Debts: 

Debts exceeding $100,000 and older than two years are under the microscope. This focus underscores the ATO’s determination to resolve long-standing, substantial liabilities.

5. Debts from Audit Actions: 

Lastly, debts resulting from ATO audits are a focal point. Whether arising from genuine mistakes or deliberate evasion, the expectation for timely resolution is high.

With the ATO moving away from its pandemic-era leniency, it’s more important than ever for businesses to embrace a culture of timely tax payments and adherence to compliance norms. The ATO’s sharpened focus on these areas signals a return to normalcy in tax administration.

These ATO focus areas can be complex and challenging. So reach out if you need guidance to ensure your business stays compliance. 

Book a consultation with us today, and let’s work together to keep your business on the right side of the ATO’s regulations.