ATO Returning to Regular Compliance Activities
Business owners should be aware that the Australian Tax Office recently announced a return to regular compliance activities. The ATO’s focus had shifted from compliance work to stimulus payment processing throughout the COVID-19 economic downturn. Few businesses have been left unscathed by the pandemic recession and although the ATO has made it clear that they will continue to provide support, they are now recommencing audits. So, what specifically do businesses need to know and do?
Recent implementations of the expanded instant asset write-off scheme and other support measures will provide much needed financial support to many businesses. But the ATO has outlined that it must also prioritise oversight and maintenance of the Australian taxation and superannuation systems.
Recommencing Audits
Small businesses who were in the process of audit when COVID-19 became a severe concern had those engagements with the ATO suspended. Initially this was only until the end of May, but deferment continued along with the impact of the pandemic. Now that we are returning to normality, suspended audits will resume for businesses that haven’t been adversely impacted by the pandemic or are in a position to quickly recover. New audits are also beginning to take place, so businesses must ensure that they comply with regulations. They should also make payments wherever possible.
Support Measures
Businesses in the process of economic recovery should strive to keep informed about any support measures which they may be entitled to. As we recently discussed, the instant asset write-off scheme’s expansion will allow eligible businesses to write off certain assets throughout the 2021 and 2022 financial years. Please refer to that article for more details on the expansion. Businesses may also be interested in the full expensing of depreciable assets and loss carry back provisions which were included in the Treasury Laws Amendment. Businesses that can use these measures in conjunction with one another may find themselves with a significant cashflow boost at the end of the 2021 tax season.
Implications
The ATO is now following-up businesses that have outstanding payments or lodgements to make. As the focus has been on stimulus payment processing for a number of months, there is now a drive to address individuals and businesses who’ve made unintentional mistakes and hold those who are intentionally doing the wrong thing to account. Businesses that can afford to pay their dues should prioritise doing so, so as to not invoke penalties. Many that are trying to do the right thing but cannot afford to at this time should still ensure their business’s diligent reporting and making of lodgements.
Although business resuming in Victoria is very exciting, the news of regular tax office activities will present stress to many. The key to continuing throughout this challenging time will be to ensure reporting compliance, even if certain amounts owed are still unable to be paid. If you are seeking more information on the recommencement of regular ATO activities or wish to discuss how this relates to your specific circumstances, please get in touch with the team at Lockwood Partners.