ATO Areas of Focus on Businesses for the Coming Year
The ATO has highlighted three areas of focus for businesses: taking steps to address cyber security and increased protection of personal data, addressing the growth in the collectable debt book – particularly for small businesses – and improving overall tax performance.
With increased cyber-crimes, scams and hacks occurring in Australia in recent times, like any other large organisation, the ATO has taken additional steps to address cyber security and increase the protection of personal data to deal with an unprecedented rise in identity-related fraud attempts. For all businesses, the ATO has introduced “client-to-agent linking”, which requires all entities with ABNs (excluding sole traders) to digitally nominate their agent through ATO’s secure online services before the agent can access any data. This will cover approximately 4.7 million businesses.
In 2024, the ATO will also be seeking to address the growth in the collectable debt book. Currently, the collectable debt component sits at about $50 billion. It consists of primarily self-assessed debt, with small businesses owing 67% of this. According to the ATO, its more lenient approach during the height of the pandemic, under which it chased fewer lodgments and recovered less debt, has now led to a concerning behavioural pattern from some businesses where they deprioritise paying tax and super and increasingly rely on unpaid tax and super to prop up cashflow.
One way the ATO seeks to level the playing field on uncooperative businesses is the reporting of debt information to credit reporting bureaus. Since 1 July 2023, it has disclosed the debts of more than 10,500 businesses that have significantly overdue undisputed tax debts of at least $100,000.
This year’s takeaway message for businesses, especially small businesses, is to be proactive and engaged with the ATO in terms of any unpaid tax or super debts and keeping data secure.
Disclaimer
The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls WA before making any decision to discuss your particular requirements or circumstances.
