Businesses Be Alert, ATO Resuming Audit Activities

Lifting lockdown restrictions have given Victorians reason to rejoice. Finally, we’re able to live our lives more normally once again. But with restored freedoms also come restored responsibilities. Business should keep in the know, the Australian Tax Office has made it clear that it has now recommenced regular audit activities.

After having switched their workforce’s focus to the processing of stimulus payments over prior months, the ATO has recommenced its usual compliance audits. This news comes with reassurance that they will continue to support businesses who have faced economic adversity throughout the pandemic. Support measures offered by the Federal and State Governments, including those outlined in the Federal Budget will continue to provide relief to businesses in need. In recent announcements the ATO has outlined that while financial relief will continue to be prioritised, so too will the oversight and support of the Australian superannuation and taxation systems.

Resuming Compliance Audits

The first businesses to re-engage with the ATO are those who had their audits suspended when COVID-19 initially became a serious concern in Victoria. That initial deferment was planned until the end of May 2020, though was prolonged by the pandemic’s continuity. Aside from these other businesses, the first to on the audit docket will be those organisations that weren’t adversely impacted by the economic recession. Beyond these businesses, the next in line will be those considered to be in a position to make a prompt financial recovery from the events of the last year. With new audits taking place, businesses need to ensure they are fulfilling their obligations and complying with regulations. It’s also been acknowledged that although many businesses are still unable to settle debts, they won’t be penalised so long as they continue to meet their reporting duties.

Implications

Because the ATO’s focus has been centred on the stimulus payment processing for so long now, there is an institutional motivation to address individuals and businesses who’ve made unintentional mistakes – as well as penalise those who’ve intentionally dodged their responsibilities. Anyone capable of making payments to meet their dues should certainly do so – or else risk penalty. Those trying to do the right thing but who cannot financially afford to, should take every step to ensure their regulatory compliance.

What Does 2021 Hold in Store at this Stage?

The Federal Budget provided a clear outline of new tax incentives and subsidies we can expect to see. The feeling is that the ATO will prove to have a much stronger presence throughout 2021 than in 2020. Crackdowns are to be expected. Some particular focuses the tax office will be looking at include:

• SG audits and reviews
• STP audits and reviews
• JobKeeper payment audits and reviews
• Cash flow boost payment audit and reviews

Take a look at this article from In the Black for a more in-depth analysis.

While business returning somewhat to normal is undoubtedly a cause for celebration, there is much to think about as taxpaying individuals and organisations. The key thing to remember is that even if you’re unable to settle debts, you can expect leniency so long as you continue to make lodgements and comply with reporting requirements. For more information on the resumption of ATO audits, or to discuss your particular circumstances, get in touch with your Morrows advisor.