Yahoo Finance ATO issues 'serious' tax warning for millions
The Australian Taxation Office said it will take action against Aussies who try to break the law.
The Australian Taxation Office (ATO) has delivered a warning ahead of the end of the financial year.
Tax time can be hectic as Aussies make sure all their i’s are dotted and t’s are crossed when submitting their tax returns. Some will be trying to scrape as much back from the ATO as possible to get a bit of financial breathing room during a cost-of-living crisis.
However, the ATO has cautioned anyone trying to skirt around the law in order to get extra cash or not be taxed as much.
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The government body said Aussies were free to arrange their financial affairs in a way that kept their tax to a minimum, as long as it remained within the confines of what was legal. However, it also revealed it was paying very close attention to unlawful tax schemes that deliberately exploited the system.
“We take these schemes seriously and will take action when they are not lawful,” it said in a statement on its site. “Involvement in a tax scheme can risk your original investment. You might also have to pay back tax, with interest and penalties.
“Some advisers will look for new ways to exploit the law or changes in the law. They will promote schemes to people and promise benefits that aren't legally available.
“Tax schemes range from mass-marketed arrangements advertised to the public to boutique or specialised arrangements tailored for specific taxpayer circumstances. Some are marketed to individuals and others to large private groups and public companies.”
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The ATO has already uncovered schemes such as those that try to reduce your taxable income, increase your deductions against your income, increase rebates, get refunds and avoid tax obligations.
Authorities are also on the lookout for people trying to defer income to a later tax period so they don’t have to pay it upfront, changing the nature of their income so they pay less tax, passing off personal expenses as business ones, or not declaring or hiding income.
Aussies have been asked to be aware of accountants, lawyers, financial advisers, telemarketers and shopping centre salespeople who offer certain types of services that might not be lawful. These can include asking you to keep secrets about their arrangements, charging a fee or commission from tax saved, and discouraging you from seeking a second or third opinion.
“Don't take a promoter's guarantee that there is no risk in participating in an arrangement,” the ATO said. “Always check before you commit to an arrangement.”
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