Star & Associates General Update: September 2023
Welcome to our quarterly update of important news across business, tax, super and accounting. We are excited to share insights and help chart the course ahead.
- Rising Audit Activity by the ATO
- ATO’s AI-Driven Auditing
- Increased Scrutiny by State Government Agencies
- 2023 Individual Tax Return Checklist
- Small Business Technology Investment Boost and Skills and Training Boost
- New Partnership, New Opportunities
- Other News and Advice From the Industry
Rising Audit Activity by the ATO
The Australian Taxation Office (ATO) has been ramping up its audit activities, especially concerning small businesses. Outgoing ATO commissioner, Chris Jordan, has declared an unapologetic commitment to recovering tax owed by small businesses during his final six months in office. The ATO’s debt book, which predominantly consists of small businesses, has over $33 billion in collectible debt out of a total $50.2 billion. In his address to the Tax Institute’s Tax Summit on September 6, Jordan also highlighted the ATO’s efforts to combat multinational tax avoidance and its crackdown on deliberate attempts to defraud taxpayers through enhanced detection capabilities and the establishment of a Fraud and Criminal Behaviours Group.
ATO’s AI-Driven Auditing
As part of the ATO’s crackdown, the agency is leveraging artificial intelligence (AI) to uncover tax avoidance. Thus far, the ATO has used AI to uncover more than $530 million in unpaid tax and to prevent $2.5 billion in fraudulent claims. Deputy Commissioner Marek Rucinski revealed that deep learning models aided in identifying $295 million in superannuation guarantee underpayments, while natural language models scoured leaked documents to detect $242 million owed by tax evaders since 2018.
The ATO uses AI to analyse vast datasets and extract insights beyond human capabilities. These efforts are helping the agency in its pursuit of recovering nearly $45 billion in unpaid taxes from Australian citizens. Since 2018, AI models have achieved a 90% success rate in identifying employers likely to underpay staff, resulting in $295 million in liabilities.
Increased Scrutiny by State Government Agencies
Alongside the ATO’s intensified audit actions, state government agencies, such as the Office of State Revenue (OSR), have also increased their audit activities. There has been a noticeable surge in payroll tax and land tax audits. This heightened scrutiny marks a departure from the relatively lenient approach adopted by the ATO during the pandemic.
At Star and Associates, our team is well-equipped to assist you in navigating these increasingly stringent audits. With our expertise and commitment to staying updated on evolving tax regulations, we support businesses facing increased scrutiny.
It’s crucial for your firm to stay proactive in ensuring accurate financial reporting and compliance with tax regulations. Staying informed about changes in tax laws and regulations is essential. We can help ensure your business remains compliant with the fluctuating tax landscape.
2023 Individual Tax Return Checklist
With tax season now underway, it’s crucial to have your financial documentation in order, ensuring accurate deductions and compliance.
To assist you in this process, we’ve compiled a concise tax planning checklist for your convenience. This checklist serves as a valuable tool to help you gather the necessary information required for your tax return.
If you have any questions or need assistance with your tax obligations, feel free to reach out to us.
2023 INDIVIDUAL TAX RETURN CHECKLIST
Small Business Technology Investment Boost and Skills and Training Boost
The Small Business Technology Investment Boost, and Skills and Training Boost are in effect. These measures provide valuable opportunities for growth and development in the digital landscape.
Here’s what you need to know:
- Small Business Technology Investment Boost: Small businesses with an annual turnover of less than $50 million can now deduct an additional 20% of the expenditure incurred for the purposes of business digital operations or digitising its operations on business expenses and depreciating assets such as portable payment devices, cyber security systems or subscriptions to cloud based services. An entity can claim the boost for expenditure on a depreciating asset only if the asset is first used, or had been installed ready for use, by 30 June 2023. Let us know if we can assist or clarify further on the measure.
- Small Business Skills and Training Boost: Small businesses can now enjoy an extra 20% deduction for eligible external training courses for employees, furthering skill development.
New Partnership, New Opportunities
Star & Associates is excited to announce a strategic alliance with TheCorpLounge, a partner platform that provides unique investment opportunities to our client who would like to be sent such information. Operating as a self-licensed financial advisory practice and institutional stockbroker firm, the platform facilitates a seamless introduction process for sophisticated investors to connect with corporate leaders.
Please note, this should not be taken as personal advice nor a recommendation from me to invest. It is a value add that we are providing to give our clients new investment opportunities that they otherwise might have missed.
Other news and advice from the industry
- Compensation for bad financial advice – A recent Federal Court decision establishes that self-managed superannuation funds (SMSFs) can seek compensation for losses due to inappropriate investment or financial advice. It emphasises the role of the Australian Financial Complaints Authority (AFCA) as a vital avenue for resolving financial complaints. Business owners and SMSF trustees should be aware of this option for addressing losses resulting from financial firms’ advice.
- Tough times ahead – Recent surveys from KordaMentha indicate a growing risk of Australia entering a recession within the next 12 months due to limited business funding options and rising inflation. As COVID-19 subsidies dwindle and interest rates rise, consumer spending and business solvency are being impacted. It’s crucial for companies to assess their financial health, cut costs, and seek alternative funding sources to navigate these challenges effectively.
- Closing Loopholes Bill – The Australian government plans to narrow its labour hire laws, aiming to target large companies using labor hire firms to lower worker wages compared to enterprise bargaining agreements. Business groups are concerned about broader implications. The legislation is part of a larger workplace bill addressing wage theft, casual employment, and gig economy worker rights, with critics highlighting challenges in defining “same job” and “same pay” in labour hire arrangements.
Please reach out if you would like more information or have any questions – we’re always here to help. You can stay updated with our latest news on our website and contact us at 1300 308 460 for all your tax planning, accounting, and advisory needs.