Plumbers who claim excessive work expenses and plasterers who fail to report cash transactions are among a number of trades and professions that will be under the tax microscope this year.
Furthermore, contracting arrangements within the construction industry will come under scrutiny for tax evasion, while a number of construction-related businesses, including carpentry, home building and real estate, have been identified as ‘high risk’ industry groups regarding superannuation compliance.
In a recent statement outlining its compliance program for 2013/13, the Australian Taxation Office (ATO) says key areas of focus include tax fraud and avoidance schemes, people who fail to declare all their income, the highly wealthy, property-tax related issues and employers who do not meet their superannuation obligations.
Tax Commissioner Michael D’Ascenzo says the release of the program will help different professions and the community to understand the ATO’s compliance activities and practices.
“By openly setting out our focus areas for the year ahead we want to encourage people to make the right decisions,” D’Ascenzo says. “This includes helping them avoid being trapped by tax schemes, in particular by stepping up our efforts to ensure people can recognise, reject and report tax avoidance schemes.”
The ATO says specific areas of focus this year will include.
- Occupations that have shown a pattern of relatively high levels of work related claims, including IT managers, plumbers and defence force non-commissioned officers,
- high income earners and tax avoidance schemes,
- unreported cash transactions within the plastering and café industries,
- contractor arrangements, in particular the construction industry,
- the self managed superannuation fund sector,
- employer obligations for superannuation in high risk industries.
D’Ascenzo says the ATO checks over 600 million transactions per year and last year stopped more than 109,000 income tax returns for potentially incorrect or fraudulent claims, saving the community almost $200 million
He adds that the ATO is also focused on businesses meeting their superannuation obligations, with a continuation of compliance activities focused on ‘high risk’ industry groups.
These high-risk groups, he says, include cafés and restaurants, real estate businesses, carpentry and businesses in home building or construction.
As well as cracking down on compliance, however, D’Ascenzo says the ATO is promoting a number of initiatives to assist taxpayers who try to do the right thing.
“We believe the majority of people try to do the right thing in meeting their tax obligations, and we find that where mistakes are made, there is a low rate of them being repeated,” DÁscenzo says. “So this year the program also outlines what we are doing and what resources are available to help making complying as easy and inexpensive as possible.”
D’Ascenzo says special assistance is available for those who are new to the tax system, adding that last year the ATO provided business assistance visits to almost 10,000 businesses across the country.