ATO Cracks Down on Businesses Dodging Tax

Take note, Aussie businesses, because there’s a new weapon in use as the ATO cracks down on businesses failing to pay tax.

The Australian Taxation Office (ATO) is quietly cracking down on businesses of all sizes failing to comply with their full range of tax obligations.

While the ATO has previously targeted businesses for failing to comply with specific obligations such as superannuation and Fringe Benefit Tax (FBT), the tax office is now taking a more expansive approach.

Using the Random Enquiry Program (REP)—which has previously only been used to target individual and business income tax returns—the ATO is now conducting intensive reviews to ensure businesses are making all of their Pay As You Go tax, super, and FBT contributions.

It’s an aggressive stance that reflects the ATO’s renewed focus on clawing back tax revenue.

Businesses selected for REP audits are chosen at random, regardless of size or turnover.

Having started the REP in 2016 and expanding it a year later to focus on small businesses, the ATO audited more than 1600 such businesses between 2017 and 2020. 

Now the tax office has turned its attention to businesses of all shapes and sizes—sparked, in part, by a number of high-profile tax breaches across the spectrum of Australian business.

While most Australian businesses do their utmost to fulfill all of their tax obligations, many overlook the importance of some fundamental elements of employment tax.

These often include poor data-keeping and a failure to maintain proper records, as well as failure to meet FBT obligations.

Non-compliance can result in significant penalties—with fines reaching up to $782,500 plus interest for global-sized firms, while company directors can also face director penalty notices and be held personally liable for PAYG withholding and missed superannuation payments.

It means businesses of all sizes need to remain vigilant when it comes to paying their taxes.

Not Sure if Your Business Is Meeting All Your Tax Requirements?

While the chances of an audit may be slim, they shouldn’t be ruled out entirely. 

That means it’s important to ensure your record-keeping is up to date and tax compliant.

If you’re not sure whether your business is meeting all its tax obligations, simply leave us your details or call +61 02 9415 1511 to discuss.

Or take advantage of our audit insurance solution for total peace of mind. Get in touch to learn more.