Taxpayers owing money to the Australian Taxation Office can expect to have their refunds, or credits with other government agencies, clipped by the outstanding amount as a COVID-19 moratorium on recouping outstanding payments is lifted.
It comes as only one in four taxpayers with outstanding bills of more than $100,000 responded to a special pilot programme in which the ATO targeted large outstanding debts for payment.“The other 75 per cent have put their head in the sand and appear to be trying to ignore it,” says Mark Molesworth, tax partner at global consultancy BDO, about the ATO’s pilot program.
Nearly $4 billion, or around 44 per cent of incorrect claims last year, involved work-related expenses that were not directly related to earning income, not apportioned between business and private use, or failed to be supported by records to prove the claim.
Common mistakes made by owners include attempting to claim deductions for longer periods than the place was rented or offering “mates’ rates” – discounted prices or preferential terms offered to friends rather than on a commercial basis – but still claiming full deductions, says Loh. Plans include focusing on users’ record-keeping to ensure expenses claimed for using cryptocurrencies – such as software, commission or brokerage costs – are accurate, according to the ATO.
Records need to include receipts of purchase or transfer of crypto assets; exchange records; and details of when crypto assets are moved to or from any platform or smart contract.
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