ATO here to help as new compliance program begins

Date: 08.07.2010

Tax office boss vows empathetic approach to small businesses struggling under uncertain economic conditions, as new compliance program begins

By Brad Gardner | July 8, 2010

The Australian Taxation Office has vowed to take a compassionate approach to small businesses struggling financially, as a new compliance program to crackdown on tax dodgers begins.

In his address to the National Small Business Summit today, ATO Commissioner Michael D’Ascenzo told attendees the tax office will spend the new financial year helping businesses stay afloat.

Referring to initiatives last year that allowed businesses to vary payments due to the global financial downturn, D’Ascenzo says the ATO will take a similar approach.

"There’s still many businesses struggling with cash flow," he says.

"We will continue to have that empathetic approach over the next 12 months."

D’Ascenzo urged businesses to talk to the ATO to work out ways to deal with financial problems to see if something can be worked out.

"We’re interested in your viability. If you’re in genuine need we will see what we can do," he says.

D’Ascenzo cites a rise in the number of non-lodgements of business activity statements, saying it is a good indication of a company in trouble.

His speech came amid the release of the ATO’s 2010-2011 Compliance Program, a document which outlines the taxation and superannuation risks the tax office is most concerned about.

The program says the global financial crisis increased competitive pressures on small businesses, leading to an environment where some sought an unfair advantage.

"We are committed to supporting honest businesses while taking firm action against those seeking an unfair advantage by under reporting or not reporting their income," it warns.

However, the document also reiterates D’Ascenzo’s comments to the business summit.

"In talking with businesses and their agents, we have found that this tougher environment requires our empathy – and vigilance against emerging risks," the document says.

According to the program, the ATO will focus on incorrect or fraudulent refund claims include BAS.

While also saying it will scrutinise under-reported or incorrect income and cash transactions, the ATO will also focus heavily on the fuel tax credits scheme.

"We have increased our capabilities of successfully identifying and prosecuting egregious behaviours in relation to fuel tax credits," the document says.

"We will also continue to focus on ensuring that fuel tax credits are claimed by the correct entity when reviewing contractor arrangements involving the provision of fuel."

During his speech, D’Ascenzo told the audience there will also be a particular focus on the property, building and construction industries because they are "areas of concern for us".

However, he also praised the efforts of small business owners.

"By and large most small businesses try to do the right thing," D’Ascenzo says.