If you’re earning extra income through sharing economy platforms such as Uber and Airbnb, or own a rental property, you’ll be in the ATO’s crosshairs come tax time.
The ATO has the powers to obtain your financial information from banks or sharing platforms and Mark Chapman, director of tax communications with H&R Block, suggests that the ATO will cross-match this data with submitted tax returns to identify false or incorrect claims.
“The ATO has very clear benchmarks about what people in particular professions should be claiming. If your claims are significantly outside of the benchmark, increasingly they will ask for substantiation. The ATO can levy a penalty of anywhere between 25-95 per cent of the unpaid tax, depending on your degree of culpability, and there’s also interest, so it can work out quite expensive,” said Mr Chapman.
Assistant Commissioner Kath Anderson also confirmed that the ATO also uses real-time data to compare the tax returns of taxpayers with people in similar income brackets and occupations to find irregularities in filed tax returns.
Ms Anderson also suggested that the ATO will be paying close attention to returns for owners of rental properties in popular holiday destinations.
“We’ve noticed some people are claiming deductions for holiday homes even where the property is not genuinely being rented out, or genuinely available for rent,” said Ms Anderson.
“There’s no problem with people using their rental property for their holiday, but holiday home owners need to remember they can only claim tax deductions for expenses made during a period when the home is rented out or genuinely available for rent.”
Think you will slip through and avoid auditing? Last year, the ATO reviewed and audited 450,000 individual taxpayers, leading to more than $1.1 billion in revenue adjustments. Most of the reviewed cases involved omitted income or overclaiming entitlements.
Read more at news.com.au
Read more at ato.gov.au
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