Tax Alert // ATO's 'hitlist' for Tax Time 2019

10 areas to watch out for…

  For employees and individuals

  1. Work related expense claims meet the ‘golden rules’
    – you must have spent the money
    – it must be for earning your income
    – you must have a record
    Focus areas for the ATO:

    – false clothing and laundry claims
    – home based business expenses
    – car expense claims current and up to date logbooks
  2. If working for a Personal Services Entity, income is reported as salary, deductions are correctly claimed and superannuation is paid by the entity
  3. Income from sharing platforms (eg. airbnb’s) is fully disclosed and any expenses claimed relate to the income earning activity
  4. Rental properties – ATO target areas:
    – over claiming deductions for interest
    – capital works claimed as repairs
    – incorrect apportionment of expenses for holiday homes used by friends/family
    – omitting income from sharing platforms

    For small/medium business

  5. ATO target areas for income tax:
    – not reporting all income – cash sales or recording income in business bank accounts
    – poor records validating expense deductions
    – claiming private expenses as business expenses
    – mistakes in PAYG withholding and reporting – from 1 July 2019 these errors may mean no tax deduction!
  6. ATO target areas for GST:
    – no tax invoices for claiming GST credit
    – incorrect classification of transactions
    – calculation errors

    For trustees

  7. Family discretionary trusts – ATO target areas:
    – Tax File Number (TFN) reporting is up to date for closely held trusts to avoid 47% withholding on distributions
    – Family trus telections are valid and uptodate, sent to the ATO, and distributions and use of trust assets are within the family group

    For superannuation:

  8. Quarterly reporting of transfer balance account events for SMSF balances of $1million or more
  9. Crypto-currency transactions have been identified and reported by SMSF trustees
  10. Non or late lodgement of annual returns

If you have any queries regarding this information please do not hesitate to contact our office.