ATO 2010 – 2011 Compliance Program a chance to get house in order

Date issued: 8 July 2010

CPA Australia has urged businesses and individuals to ensure their tax affairs are in order to achieve compliance under Australian Taxation Office (ATO) requirements and ensure they receive their full entitlements.

CPA Australia's Paul Drum, general manager, policy and research, said 'the ATO's 2010 – 2011 Compliance Program is about education as much as compliance. It presents an opportunity for individuals and businesses to learn how to get their affairs in order and ensure they receive what they’re entitled to.

'There is a public expectation that the ATO collects the revenue in accordance with tax law.'

This year's compliance program focuses on a broad community cross section. Its features include:

• auditing more than 100,000 small businesses, including 26,000 micro-businesses (annual turnover under $2million)
• a close review of transactions around the business tax breaks as part of the government’s stimulus program
• auditing 10,800 self-managed super funds
• closely monitoring whether individuals have under-declared their income or over-claimed on entitlements
• 369 risk reviews on highly wealthy individuals (net worth of $30 million plus)
• looking at possible profit shifting (off-shore arrangements), revenue and capital loss black hole expenditure among larger enterprises

'Technological advances have greatly increased the speed and scope with which the ATO implements its compliance program,' Mr Drum said.

'With ready access to data, it can carry out information matching without resorting to a conventional audit. Last year it examined over 500 million transactions using this method.

'The vast majority of businesses and individuals have every intention of doing the right thing and this is why the information and education component of the program is so important. Punitive action should be viewed as a last resort.

'Anyone in any doubt as to compliance issues should speak to their accountant.'