LATEST ACCOUNTING NEWS
Covid-19 resources
Jobkeeper Fraud warning
ATO extends initial JobKeeper payment deadline
Boosting cash flow - ATO
Our website, your resources
ATO releases JobKeeper alternative test
Temporary Working from Home Expenses Rule
Minimum Pensions Halved – 2020 & 2021
More coronavirus support for landlords, commercial tenants
COVID-19: Early Childhood Education and Care Relief Package
What Covid-19 relief packages mean to you.
Now I’m working from home, what can I claim?
Global statistics plus Covid-19 updates
ATO clarifies COVID-19 rent relief concerns
Banks to defer small-business loan repayments for 6 months
Historic $130bn wage subsidy to cover 6 million workers
Stage 2 – Covid-19 stimulus package.
Covid-19 Update - Small Business
PM launches $17.6 billion virus stimulus plan
SG amnesty bill passes Parliament
ATO flags most common SMSF return mistakes
Expected GDP by country 2010 to 2100
ATO expands small business review pilot
A resource hub for our clients.
Risks when dating documents in 2020
Australian Taxation Office (ATO) debts may affect your credit rating
Statistical picture of Australia - Update
Absentee Property Owner – Tax Whack - Victoria
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
ATO to double rental deduction audits to 4,500

ATO audits of rental deduction claims will double this tax time as the agency reinforces its claims that nine out of 10 deductions contained an error.



       

 

Accountants with clients who have rental properties have been warned of the ATO’s “top priority” for tax time 2019, after Commissioner Chris Jordan said that a random audit sample of returns with rental deductions found that 9 out of 10 contained an error.

 

ATO assistant commissioner Gavin Siebert said that taxpayers can expect the number of in-depth audits to more than double this year to 4,500, with a specific focus on overclaimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others, and omitted income from accommodation sharing.

 

In 2017–18, the Tax Office audited over 1,500 taxpayers with rental claims and applied penalties totalling $1.3 million.

 

In one case, a taxpayer was penalised over $12,000 for overclaiming deductions for their holiday home when it was not made genuinely available for rent, including being blocked out over seasonal holiday periods.

 

Another taxpayer had to pay back $5,500 because they had not apportioned their rental interest deduction to account for redraws on their investment loan to pay for living expenses.

 

“We use a range of third-party information including data from financial institutions, property transactions and rental bonds from all states and territories, and online accommodation booking platforms, in combination with sophisticated analytics to scrutinise every tax return,” Mr Siebert said.

 

“Where we identify claims of concern, ATO staff will investigate and prompt taxpayers to amend unjustifiable claims. If necessary, we will commence audits.

 

“Once our auditors begin, they may search through even more data including utilities, tolls, social media and other online content to determine whether the taxpayer was entitled to claims they’ve made.”

 

The key issues

 

The Tax Office will take a closer look at loan interest, whereby some taxpayers have been using some of the loan money for personal use such as paying for living expenses, buying a boat or going on a holiday and then claiming that loan interest as a deduction.

 

Rental property owners have also been warned on properly differentiating between capital works and repairs, and what is deductible immediately or over a number of years.

 

The correct apportioning of holiday homes being let out to family or friends below market rates will also be scrutinised.

 

This week, the ATO also reminded tax agents that the ability to claim travel to residential rental properties was no longer allowed, ever since rules changed from 1 July 2017.

 

 

 

Jotham Lian 
18 April 2019 
accountantsdaily.cpom.au

 

 



13th-May-2019
 
SMSF Advisers Network logo CPA logo Peter I Price & Associates Pty Ltd
Phone: (07) 3376 3411 |Fax: (07) 3376 8904 | Email: info@peterprice.com.au
15 Loffs Road, Mt Ommaney QLD 4074
Liability limited by a scheme approved under Professional Standards Legislation and other than for the acts or omissions of financial services licenses.