Improvements to GST risk Assessment

Are you a business that has had a GST refund held up as a part of the ATO’s risk assessment program to verify GST refunds? The Inspector-General of Taxation (IGT) has recently completed and released his review into ATO’s practice and the findings are surprisingly good for the ATO. Even so, as a part of the review, the IGT made several recommendations to improve the process which the ATO has mostly agreed to.

The Inspector-General of Taxation (IGT) has recently released his review into the verification of GST refunds by the ATO. The review was initially conducted as a response to concerns raised by taxpayers which had their GST refunds delayed as a part of the ATO risk assessment program to verify certain details before refunds are issued.

Broadly, the ATO’s risk assessment system uses BASs as input data and automatically selects a number of cases where retention of refund and further checking should be considered. The selection is then further refined by manual intervention. The review conducted by the IGT examined the end-to-end process involved in refund verification including from initial case selection through to the review and audit activities.

How to spot Tax Scams and how to deal with them

As we head towards the deadline for lodging your tax return, we’re also heading into peak season for the army of scammers looking to hoodwink individuals and small businesses into parting with their money, their identity or both by claiming to be from the ATO.

Tax scams can take many forms and new ones emerge all the time. The latest involves the fraudsters initiating a three-way telephone conversation between the scammer, the victim, and another scammer impersonating the victim’s tax agent. In one instance, an H&R Block client received such a call whilst actually in our office, meeting their tax consultant! Needless to say, the fraudulent nature of the call was obvious from the outset!

During July and August, the ATO states that nearly $190,000 was paid to scammers and over 1600 people handed over their personal or financial information.

Another common scam involves a text message supposedly from ‘ATO Refund’ offering a tax refund to the recipient.  If the victim clicks on the link, they’ll be asked for their personal details, Tax File Number (TFN) and credit card number, including the three digit security code on the back. Supposedly, this is so the refund can be deposited in the account. In reality, it’s so that the scammer can start stealing money from the credit card.

A slight variation on the same scheme involves the scammer asking for a small fee to be paid via the credit card in order to access the refund. Shortly after paying, much larger deductions will be charged to their card.

In reality, the ATO will never ask for personal information, including credit card details and TFN, by text or email. Nor will they ask you to pay money to access a refund.

Meanwhile, older scams continue to proliferate.

Over the past few years, thousands of people and businesses have received fake emails purporting to be from the ATO, asking them to click on a link or attachment to access further details. That one click can lead to disaster, allowing the scammers to access your computer system and potentially hold you or your business to ransom.

Boosting your super tax effectively

As we progress through life, the amount we pay into superannuation tends to take on a greater importance. In our early working lives, our employers pay the standard 9.5% contribution into our super fund but (rightly or wrongly), few people proactively consider their superannuation or the retirement which it will have to fund.

As we get older, our incomes typically increase, giving rise to more disposable income, particularly as the kids fly the nest. Retirement itself – once a destination which was barely on the map – now appears alarmingly close and for many, that leads to a greater focus on boosting our superannuation.

There are many ways to contribute to super, some more tax effective than others. Here’s our guide to building up your super and getting the best tax outcome in the process.

SUPER CONCESSIONAL CONTRIBUTION CAPS

There is a limit on how much you can put into super each year from your pre-tax income. Such contributions are called concessional contributions.

From 1 July 2017, you can contribute up to $25,000 into your super fund. This includes your employer's 9.5% super guarantee contribution, any salary sacrificed amounts and tax deductible personal contributions (see below for more details on salary sacrificing super and making tax deductible contributions). This is called the concessional contributions cap. 

From 1 July 2018, you can carry forward the unused part of your $25,000 annual concessional contributions cap for up to five years (using up the earliest year first) provided your superannuation balance is less than $500,000. This means that the 2019/20 financial year (ie, the year beginning 1 July 2019) is the first year that unused concessional contribution amounts can be used.

If you are aged between 65 and 74, you can only make concessional contributions if you pass the “work test”. That means that you have to work 40 hours or more in a consecutive 30 day period in the financial year in order to make contributions.

TIP: The work test is quite easy to pass. If you work 40 hours during a consecutive 30 day period, you could – if you wanted – not work at all during the rest of the year.