21/06/2016

Just in time for the 2016 tax season, the ATO has given us a glimpse of the compliance areas it will be focussing on this year.

The ATO always keeps a close eye on work-related expense deductions, which have been on an upward trajectory, both in terms of numbers of claimants and dollars claimed for some time. This year, the ATO will be placing a particular focus on:

  • car expenses claims for transporting bulky tools
  • travel
  • internet and mobile phone
  • self-education.

We know that these are all areas where clients are prone to make mistakes. We prepare returns for over 750,000 Australians and there’s no doubt that the ATO is focusing this year on areas where there is a widespread lack of understanding about what can be claimed. Before making claims, it’s essential that you’re confident that you understand what you can and can’t claim and that you have the necessary proof that you actually incurred the expenditure.

The ATO has also flagged the increase use of third party data from sources as diverse as state property registers, share registers, overseas tax jurisdictions and other Australian government departments. The intent is to catch taxpayers who are failing to declare income in their returns, particularly:

  • capital gains tax from the disposal of shares and property
  • foreign source income including income from employment, business income, pensions, rent,  bank interest, dividends and capital gains
  • contractor income from payments made by government agencies.

The ATO will also be looking closely at those working in the shared economy to ensure that income and expenses are correctly reported.  Examples quoted by the ATO include services such as:

  • ride-sourcing – transporting passengers for a fare
  • renting out a room or house for accommodation
  • renting out parking spaces
  • providing skilled services – web or trade services etc
  • supplying equipment, tools etc
  • completing odd jobs, errands, deliveries etc
  • renting out equipment such as tools, musical instruments, sports equipment etc.

After putting out much needed guidance last year on how tax applies to those offering services through companies like Uber and Airbnb, it’s no surprise that this is going to be a focus area for compliance action this year. This represents a call to action to all those who offer goods or services through shared economy providers to look closely at their tax compliance and if necessary seek professional help to get up to date.

 

Book a tax return appointment

Let us lodge your tax return for you. Our tax accountants have the knowledge to walk you through the tax refund process with ease. We are committed to offering expert and personal service year-round at a location convenient to you.

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Book a tax return appointment

Let us lodge your tax return for you. Our tax accountants have the knowledge to walk you through the tax refund process with ease. We are committed to offering expert and personal service year-round at a location convenient to you.

Book now