ATO to focus on compliance for $20k asset write-offs
Small business asset write-offs and undeclared capital gains will be at the top of the Australian Taxation Office's (ATO) auditors' compliance focus this year, according to H&R Block.
Since the introduction of the $20,000 instant asset write-off for small businesses in the last Federal Budget the ATO was quick to spot the potential for abuse of the rules, the tax accounting firm said.
Making predictions, H&R Block's director of tax communications, Mark Chapman said as taxpayers start to submit tax returns including claims under the new rules the deductions would be closely scrutinised by the ATO and there would likely be high-profile audit action against those who are stretching or breaking the rules.
Chapman also said there would be a spike in audits of capital gains that have either been reported incorrectly or not reported at all.
"As part of the ATO's data-matching program, they have recently received millions of items of data in relation to share and property transactions stretching as far back as 1985, when capital gains tax was first introduced," he said.
"The ATO will have been scrutinising that data and matching it with the information contained on tax returns."
Chapman also predicted compliance for rental property income and deductions, disclosure of undeclared foreign income, and non-compliance in the sharing economy for Uber drivers and Airbnb hosts, would also be part of the ATO's focus for this year.
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