Don’t get caught out by the ATO.
ATO’s data matching technology shining light on undeclared income. Here’s what you need to know.
The progression of technology has seen many changes, both good and bad. This progression in technology is now assisting the ATO to ensure that people and businesses comply with their tax and super obligations and is also assisting in detecting fraud.
- Your employers
- Bank and financial institutions (including overseas banks)
- Health insurance funds
- BAS statements
- Superannuation accounts
- Property information from the state
Armed with this data, comparisons are made to the information provided in your tax return. The intention of this technology implementation is to identify taxpayers with any omission of income or fraudulent deductions. The ATO can reassess previous year’s tax returns with the power to issue fines and penalties, even interest in some cases for non-compliance.
The technology is especially advantageous in ensuring all income from secondary jobs such as rent from Airbnb, Uber and Cryptocurrency are declared. As written about last month, the gig economy is taking on the economy.
Further, “Crypto transactions, in particular, will undergo greater scrutiny than ever before, with the ATO estimating that records relating to between 500,000 and 1 million individuals, who have or may be engaged in buying, selling or transferring cryptocurrency, will be analysed by the ATO this tax time.” Mark Chapman explains.
Similarly, tradespeople and sole traders who may have been working ‘off the books’ are now at risk with the ATO checking bank accounts and cross referencing to any ABNs.
Remember that data matching is here to stay and it’s not too late to rectify with the ATO offering “voluntary disclosures”.
For further information call your Prime Accountant today on 9415 1511 or email email@example.com.