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ATO pencils October start date for tax audits

ATO audit activities are now set to recommence by October, pending on how the ongoing coronavirus situation develops, a parliamentary committee has heard.

Tax&Compliance Jotham Lian 07 August 2020
— 2 minute read

ATO second commissioner Jeremy Hirschhorn told a Senate Select Committee on COVID-19 last week that the Tax Office has refrained from initiating new audits since the pandemic hit, redeploying its auditors instead to deal with the rollout of stimulus measures, including JobKeeper and the cash-flow boost.

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However, Mr Hirschhorn said that based on the ATO’s current plans, audits and its general work streams would recommence between September and October, subject to the developing pandemic situation.

Mr Hirschhorn’s comments were made before Victorian Premier Daniel Andrews declared a state of disaster and imposed stage 4 restrictions across metropolitan Melbourne this week.

“We have redeployed about 3,000 staff. We’ve been able to do that because, given the COVID scenario, we have really redeployed people from initiating new audits,” Mr Hirschhorn said.

“So, for the last few months, we have not been initiating new audits, except in certain circumstances.

“Things like GST for audit we still have, but, as a general comment, given the position the community is in, I think the last thing most people would like is a call from my auditors saying, ‘Youve been selected for audit.’ So, we made a very conscious choice.”

The ATO’s latest indication comes after it earmarked August and September as potential dates to recommence its debt and lodgement intervention activities.

The Institute of Public Accountants general manager of technical policy Tony Greco said he was confident the ATO would take into account the fluid nature of the pandemic.

“They have to start doing what they are required to do and we are not begrudging them for it, but we also need to factor in changing circumstances,” Mr Greco said.

“Its a statement that has to be reflective of changing circumstances, and Im sure the ATO would acknowledge that they have to tailor it for different experiences on a state-by-state basis.”

Resources ahead of JobKeeper 2.0

While the ATO has been unable to finalise its systems for the JobKeeper 2.0 changes ahead of the passage of new legislation, Mr Hirschhorn said the Tax Office would devote its resources to providing guidance around the new eligibility criteria.

From 28 September, businesses will need to need to meet the requisite decline in turnover using actual GST turnover for the September quarter to access the two-tiered payment of $1,200 for full-time workers and $750 for those working less than 20 hours a week.

From 4 January 2021, businesses will need to reassess their turnover to demonstrate that they have met the decline in turnover test for the December 2020 quarter.

“In terms of where there will be calls for guidance, my suspicion would be that most calls for guidance will come around turnover tests and alternative turnover tests,” Mr Hirschhorn said.

“There will be significant resources spent in terms of community education and guidance, because new questions will arise, although we anticipate not to the same extent as with JobKeeper 1, because people have become relatively familiar with the concepts. But there are new concepts, so there will be a reasonable amount of guidance that we will have to produce

“Its a tight time frame, but its actually relatively luxurious compared to round one.”

ATO pencils October start date for tax audits
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Jotham Lian

Jotham Lian

Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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