ATO’s Audit Targets

ATO’s Audit Targets

Data Matching is one of the main methods the ATO uses in detecting risks areas and cases of errors in tax returns. Where a Tax File Number (TFN) is reported – for bank accounts, employment and superannuation funds – the ATO can match the data received from banks, employers and super funds against the amounts reported in the taxpayer’s tax return.

Benchmarking is another method that the ATO uses based on information taken from the millions of tax returns lodged every year. This information is categorised by business type and occupation codes reported in the tax return. Benchmark data is then compiled such as expense ratios, profit margins, and expected turnovers. Where the data does not match the expectations of the ATO, this shows a risk factor that may cause the ATO to investigate further.

Risk factors include:

Individuals

• Incorrect or fraudulent refunds for over-claims and deliberate fraud
• Review of work-related expenses for occupations with high levels of claims
• People getting caught up in tax avoidance schemes
• Omitted income, including dividends and interest, capital gains and foreign source income.

Micro businesses (turnover under $2 million annually)

• Unrecorded and unreported cash transactions
• Employer obligations
• GST refund integrity and GST evasion
• Not correctly registered in the tax and superannuation systems

Small and Medium Enterprises (SME) (turnover $2 million to $250 million)

• Participation of wealthy individuals in the tax and superannuation systems
• Use of trusts to inappropriately minimise tax
• Division 7A – treatment of private company profits
• Capital gains – non-disclosure and incorrect reporting
• Employer compliance with fringe benefits tax rules
• Integrity of business systems for GST and excise obligations
• GST and property transactions.

The industries which the ATO have identified as being under review in the 2013 financial year include:

• Plastering
• Cafes
• Defence force personnel
• Information Technology managers
• Plumbers

Be prepared by:

• Keep your records up to date, including having invoices/receipts and financial statements prepared
• Ensuring all tax registrations and lodgements are up to date and completed on time
• Periodically reviewing your situation to ensure that if circumstances have changed, your tax position matches those changes
• Get advice for any issue which is complex or may have some risk which needs to be resolved.

Interested in joining our team? Why not apply today? 

About Our  Traineeships:-

Join the Market Leader in 2016 – Accounting Traineeships

Looking to study a B.Com at University of Newcastle in 2016?

Bottrell Business Consultants are a Multi Award Winning Firm

We have 2016 Traineeships available – work 3 days Study part-time 2 days

Apply now to Tara Skippen on tara@bottrellaccounting.com.au – send resume & cover letter

www.bottrellaccounting.com.au or check us out on Facebook, Twitter, Instagram or LinkedIn

Offices – East Maitland | Newcastle | Sydney | Melbourne | Brisbane | Gold Coast

Bottrell Business Consultants Pty Ltd – Chartered Accountants and Business Advisors.

The Bottrell group incorporates Bottrell Business Consultants, Bottrell Accounting & Taxation, Maitland Accounting & Taxation, East Maitland Accounting Services and Mobile Bookkeeping & Recruitment.

Our group of businesses & links include the following companies (& our websites);-

• Bottrell Accounting & Taxation – Visit out website
• Bottrel Business Consultants Pty Ltd – Visit our website
• Maitland Accounting & Taxation – Visit our website
• East Maitland Accounting Services – Visit our website
• Mobile Bookkeeping & Recruitment – Visit our website