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Underreported BAS sales leads to 2.5 years in jail

Tax

A Queensland bricklayer will now face two-and-a-half years in jail after an ATO analysis of taxable payments reporting system data helped it uncover nearly $100,000 in tax evasion.

By Jotham Lian 9 minute read

Appearing before the Brisbane District Court last week, Ben Ogden was found to have underreported sales income across four quarterly business activity statements, lodging $85,359 in reported sales despite bank statements revealing deposits of $375,209.

The failure to disclose actual sales resulted in a GST shortfall of $26,570, with Mr Ogden also understating his income on his tax return, leading to a tax shortfall of $70,441.

According to the Tax Office, an analysis of TPRS reports lodged by entities that engaged Mr Ogden for work in the building and construction industry showed that he had quoted the ABN of his bricklaying trust despite claiming it was no longer trading.

“The ATO uses information reported on the taxable payments annual report (TPAR) to make sure that businesses are complying with their tax obligations, for example, being registered for GST if required, lodging BAS and income tax returns, and using valid ABNs, reporting the correct amount of income and then paying the right amount of tax,” an ATO spokesperson told Accountants Daily.

“We know that most people do the right thing, but this case shows that the small number of people who try to evade or cheat the tax and super system will get caught and we will take firm action.

“The taxable payments reporting system aims to create a level playing field — when you don’t declare all your income, you’re stealing from the community and disadvantaging everyone who does the right thing; it’s not fair and it’s not OK.”

The TPRS currently applies to businesses in the building and construction industry, those who provide cleaning or courier services, and those who provide road freight, information technology (IT), and security, investigation or surveillance services.

Businesses that provide mixed services — a mixture of any of the TPRS services — and receive payments for these services that exceed 10 per cent or more of their total GST turnover will also need to lodge a TPAR by 28 August each year.

The ATO had previously flagged that more businesses could see themselves come under the TPRS for the first time this year because COVID-19 business conditions meant more businesses were paying contractors for services.

“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors this year to deliver their goods to customers as a result of COVID-19,” ATO assistant commissioner Peter Holt said earlier this year.

“These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are 10 per cent or more of the total annual business income, you’ll need to lodge.”

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Jotham Lian

Jotham Lian

AUTHOR

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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