Top 5 ATO targets as $10 billion in refunds flow

 

BUSINESSES claiming private expenses, omitting income and failing to properly document purchases are in the crosshair of the Australian Tax Office.

Queenslanders have made more than 1.2 million electronic lodgements to the taxman since July 1.

More than 6.6 million returns have been lodged across Australia, totalling $10 billion in refunds.

The ATO is preparing to start its review and audit of Queensland small businesses.

Directors have been warned to properly review their tax returns or risk intervention by the ATO to correct mistakes.

"This tax time, the ATO is focused on supporting small businesses to get it right through a range of services and tools available to them," a spokeswoman said.

"We are also focusing on addressing common issues we see when small business lodge their returns and reinforcing our message around record-keeping and claiming of expenses."

The ATO has already adjusted more than 168,000 individual tax returns since July 1.

"Our strategies focus on claims that appear high, for example, claims that are high in comparison to other people in the same profession at the same income level," the spokeswoman said.

"For taxpayers who have a legitimate claim, the best approach is to ensure they keep records to support their claim."

The spokeswoman said businesses operating well usually had methods to "get the basics right".

"They keep good records, they run their business with the help of technology, such as point-of-sale software and accounting systems, and they seek advice from a tax professional when they need it," she said.

Businesses with a turnover between $10 million and $50 million can also take advantage of the $30,000 instant asset write-off.

COMMON BUSINESS ISSUES

- Claiming private expenses in the business

- Failing to properly attribute personal and business use

- Not understanding how tax applies for different and complex business structures

- Omitting income

- Not having the necessary records to substantiate small business expenses claims.

ATO'S 'GOLDEN RULES'

- The money must have been spent on your business

- If it is for a mix of business and private use, only claim the portion that is related to your business

- You must have records to prove it.



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