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ATO monitors personal living expenses

In an ongoing effort to address the misuse and abuse of the tax and regulatory systems, the ATO has implemented a new tool to monitor what constitutes reasonable personal living expenses.

Information is requested by the tax office to identify unreported cash income when looking at household expenditure. An individual will be required to provide this information to work out if they need to make adjustments to their business and record-keeping practices as well as help the ATO identify if they should be selected for an audit.

In the event of an audit or when making an assessment in the course of examining an individual’s tax affairs, the ATO will employ a set of guidelines presented in the form of questionnaire worksheets. These worksheets will require taxpayers to provide certain details about the living expenses of their household.

Discrepancies in tax returns that have been discovered by individuals completing a personal living expenses worksheet can be adjusted through voluntary disclosure. Taxpayers that voluntarily inform the ATO of mistakes before an audit may be eligible for reduced penalties.

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News

Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

September 24, 2020

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker’s super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.