In The Loop with PrimeAdvisory [November]
Are you a company director? If your business owes a tax debt, the Australian Taxation Office may well have you in its sights.
The ATO has also warned against redrawing on investment loans, while the federal government has put plans on hold to make deliberate wage theft a criminal offence.
ATO Sets Sights on Directors as It Aims to Claw Back Tax
The Australian Taxation Office has set its sights on company directors as it looks to claw back mounting tax debts.
With tax debts having blown out to more than $50 billion as of June 2023, the ATO has criticised some company directors for using the tax office “as a low-interest loan facility”.
The tax office responded by sending out a total of 23,246 Director Penalty Notices (DPNs) last year, and says directors who continue to accrue business tax debts run the risk of having company liabilities converted into personal ones.
The ATO announced it had clawed back “more than half a billion dollars” from clients who paid in full after it threatened to disclose their business tax debts.
Read more on why the ATO is cracking down on company directors.
Australians Owed Billions in Superannuation Guarantee
Australian workers are owed billions of dollars in superannuation guarantee (SG), forcing the federal government to take action.
Although the vast majority of employers are doing the right thing—as Australian Taxation Office data demonstrates—the issue is causing a major headache for the government.
Much of the owed SG is unlikely to ever be recovered, and the powers that be are instead turning their attention to preventing the debt spiralling further.
With hefty penalties in place for employers breaching SG laws, including those pertaining to the misclassification of independent contractors, it’s a topic that all business owners should make sure they’re up to speed on.
Read more about what you need to know regarding the superannuation guarantee.
Redrawing Your Investment Loan? You Need to Be Careful
The ATO says a significant number of taxpayers are redrawing on their investment loan and using the funds for personal use.
“If you’ve used any part of your original or refinanced investment property loan to cover private expenses, like buying a new car or renovating the home you live in, you can only claim an interest deduction for the portion relating to producing your rental income,” the ATO’s Assistant Commissioner Tim Loh said.
In a bid to crack down on what it claims is more than $1 billion in lost tax revenue each year, the ATO announced in May it was matching data from residential property loans to financial details from banks to ensure to account for any anomalies on tax returns.
Read more on why you need to be careful about redrawing on your investment loan.
Deliberate Wage Theft Could Land Employers in Jail
The federal government is aiming to make deliberate wage theft a criminal offence, with jail terms and mammoth fines on the cards for employers who engage in the act.
It headlines a host of workplace reforms proposed by the government as part of its Closing Loopholes Bill.
Some states already have wage theft laws in place, and there has been minimal detail about how these proposed changes would impact existing legislation.
The Bill has received plenty of criticism, leading to a delay in the inquiry’s reporting date.
Read more about the government’s proposed wage theft legislation and other workplace reforms.