- Activities
- Our previous related programs
- Data providers
- Keeping data safe
- Data elements collected
- Number of records
- Data quality
- Data retention
Activities
The data collected under this program will enable us to undertake a range of activities to support correct reporting of motor vehicle expenses, lodgment of income tax returns, goods and services tax and fringe benefits tax. The data will be used to:
- inform individuals with novated lease arrangements of their taxation obligations as part of an information and education campaign
- identify relevant cases for administrative action including compliance activities and educational strategies
- the data will allow us to provide tailored messages in our online services, prompting taxpayers to check they are correctly meeting their reporting obligations when completing their tax returns
- use insights from the data to design ways to make it easier for our clients to interact with the system and get their affairs right.
Our previous related programs
No previous data-matching activities have been conducted on the novated lease sector.
Prior to publishing this data-matching protocol, we collected a sample of novated lease data using our formal information gathering powers. This was to investigate the value of this data in supporting the program objectives. The sample data indicated some taxpayers are incorrectly claiming vehicle expenses for a novated lease vehicle. The data samples were matched against ATO records and found to be of a standard acceptable for the objectives of this data-matching program.
Data providers
The ATO is the matching agency and the sole user of the data obtained during this data-matching program.
Data will be obtained from:
- McMillan Shakespeare Group
- Smartgroup Corporation
- SG Fleet Group
- Eclipx Group
- LeasePlan
- Toyota Fleet Management
- LeasePLUS
- Orix Australia.
Where the client base of a data provider does not present a risk, or the administrative or financial cost of collecting the data exceeds the benefit the data may provide, the data owner may be excluded from the program.
Our formal information gathering powers
The data will be obtained under our formal information gathering powers contained in section 353-10 of Schedule 1 to the Taxation Administration Act 1953.
This is a coercive power that obligates the data providers to provide the information requested. We will use the information for tax and superannuation compliance purposes.
Privacy Act
Data will only be used within the limits prescribed by Australian Privacy Principle 6 (APP6) contained in Schedule 1 of the Privacy Act and in particular:
- APP6.2(b) – the use of the information is required or authorised by an Australian law
- APP6.2(e) – the ATO reasonably believes that the use of the information is reasonably necessary for our enforcement-related activities.
Keeping data safe
The data-matching program will be conducted on our secure systems that comply with the requirements of:
- the Australian Government Information Security ManualExternal Link produced by the Australian Signals Directorate, which governs the security of government information and communication technology (ICT) systems
- the Australian Government Protective Security Policy FrameworkExternal Link, which provides guidance on security governance, personnel security, physical security and information security.
All ATO computer systems are strictly controlled according to Australian Government security standards for government ICT systems, with features including:
- system access controls and security groupings
- login identification codes and password protection
- full audit trails of data files and system accesses.
We will use our secure internet-based data transfer facility to obtain the data from source entities.
Data elements collected
Data will be collected for taxpayers with novated lease arrangements. We negotiate with the selected data providers individually to obtain data held within their systems. The collected data may contain all or a selection of the fields listed below – this depends on what fields the data provider holds.
Lessee/Employee details
- unique identifier of the lessee
- name of the lessee
- addresses of the lessee (residential and postal)
- date of birth of the lessee
- all contact telephone numbers (for example: fixed line, mobile) for the lessee
- email address(es) of the lessee
Employer details
- unique identifier of the employer
- name (trading name and legal name) of the employer
- ABN of the employer
- addresses (business and postal) of the employer
- contact name for the employer
- contact telephone numbers (for example: fixed line, mobile) for the employer
- email address(es) of the employer
Lease transaction details
- unique identifier for the lease transaction
- lease start date
- lease end date
- lease expected end date
- lease termination date
- number plate of the vehicle
- type of vehicle (new or used)
- category of vehicle (sedan, wagon, utility etc)
- lease price per month including GST
- items packaged with the vehicle lease
- expenses packaged with the vehicle lease (for example: fuel, servicing)
- bank account name for the lessee
- bank account number for the lessee
- bank account BSB for the lessee
Number of records
The number of individuals covered by this data collection is expected to be approximately 260,000 annually.
Data quality
We conducted a pilot sampling the data and found the data was of a quality suitable for this data-matching program. We anticipate that the data quality will be of a high standard based on the pilot process.
Entities providing novated leasing finance services have sophisticated computer systems.
Novated leasing finance service providers operate in cross-jurisdictional legislative frameworks. They must satisfy specific regulatory requirements including taxation, registration and insurance obligations. They also have due diligence obligations to maintain the quality of their records, to manage and supervise salary packaging accounts as a third-party financier offering novated leases.
The data is sourced from providers' systems and may not be available in a format that can be readily processed by our systems. We apply extra levels of scrutiny and analytics to verify the quality of the data. This includes but is not limited to:
- meeting with data providers to understand their data holdings, including their data use, data currency, formats, compatibility and natural systems
- sampling data to ensure it is fit for purpose before fully engaging providers on task
- verification practices at receipt of data to check against confirming documentation; we then use algorithms and other analytical methods to refine the data.
Data is transformed into a standardised format and validated to ensure that it contains the required data elements prior to loading to our computer systems. We undertake program evaluations to measure effectiveness before determining whether to continue to collect future years of the data or to discontinue the program.
To assure data is fit for consumption and maintains integrity throughout the data-matching program, it is assessed against the 11 elements of the ATO data-quality framework:
- accuracy – the data correctly represents the actual value
- completeness – all expected data in a data set is present
- consistency – data values are consistent with values within the data set
- currency – how recent the time period is that the data set covers
- precision – the level of detail of a data element
- privacy – access control and usage monitoring
- reasonableness – reasonable data is within the bounds of common sense or specific operational context
- referential integrity – when all intended references within a data set is valid
- timeliness – how quickly the data is available for use from the time of collection
- uniqueness – if duplicated files or records are in the data set
- validity – data values are presented in the correct format and fall within predefined values.
Data retention
The collection of data under this program includes all financial years from 2018–19 to 2022–23. The data collection is annual prior to the end of each financial year.
Considering the number of data providers, we collect data periodically. We work co-operatively with the data providers and aim to balance our requests against peaks and troughs of demand in a data provider's own business.
We destroy data that is no longer required, in accordance with the Archives Act 1983, the records authorities issued by the National Archives of Australia, both general and ATO-specific.
We will retain each financial year’s data for five years from receipt of the final instalment of verified data files from all data providers. The data is required for this period for the protection of public revenue as:
- retaining data for five years enables us to conduct long-term trend analysis and risk profiling of the employees and employers utilising novated lease arrangements. This data improves a holistic view of novated lease practices.
- the data enhances our ability to identify taxpayers who may not be complying with their tax and superannuation obligations, which is integral to the protecting the integrity of the tax and superannuation systems.
- retaining data for five years supports our general compliance approach of reviewing an assessment within the standard period of review, which also aligns with the requirements for taxpayers to keep their records.
- the data is also used in risk models, including models that establish retrospective profiles over multiple years aligned with period of review.
While increased data-retention periods may increase the risk to privacy, we have a range of safeguards to appropriately manage and minimise this. ATO systems and controls are designed to ensure the privacy and security of the data we manage.
See also: