Month: September 2023

The ATO has ramped up compliance activity in the self managed super fund (SMSF) space in response to an increasing number of funds that have been identified as not complying with superannuation obligations. For the 2023 year, the ATO says it has issued double the amount of tax and penalties when compared with the 2022 income year, and the number of disqualifications has tripled. According to the ATO, the most common reason for applying penalties was SMSFs allowing illegal early access of super benefits by fund members.

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The ATO has recently released a Taxation Determination to provide guidance on two specific issues of control in relation to the aggregated turnover test and when the Commissioner of Taxation can exercise discretion. The aggregated turnover threshold for being a small business entity was originally less than $2m; however, that threshold was increased to less than $10m during the COVID-19 pandemic. This means that the issue of connected entities and control has taken on a new significance for businesses that want to remain under the threshold and access various small business concessions.

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With the cost of living crisis and increase in interest rates hitting Australian households, there is growing evidence that many are falling into financial stress. It is with this background that ASIC has issued an open letter to various banks, credit institutions, and lenders, calling on them to ensure that their customers have the appropriate level of support. It has further reminded lenders that under s 72 of the National Credit Code, providers must consider varying a customer’s credit contract if they are notified that these credit obligations are unable to be met.

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A recent Inspector-General of Taxation and Taxation Ombudsman (IGTO) has recommended improvements to the small business litigation funding program. The report by the IGTO was mainly based on 2 completed dispute investigations, with a further 3 investigations currently underway. The original intention of the funding program was to mitigate the disadvantage that small business taxpayers face against the ATO, which is a well-resourced and experienced litigant in proceedings which are often complex and costly.

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The program initiated by the previous government to transform and consolidate various business and professional registries has been scrapped after a review unearthed an estimated cost blowout of some $2.3bn if the project were to continue on its current trajectory. The government has stated that it remains committed to making it easy for businesses to register their details and will prioritise the stabilisation of existing registers after the closure of the program. It will also consider options to uplift registries following further analysis.

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