Our Tax Avoidance Taskforce Adviser Strategy aims to help strengthen the integrity of the tax and super systems by recognising the important role advisers have in supporting businesses.
Taxpayers take their lead from their advisers. Therefore, it's critical that advisers ensure their own tax and super affairs are in order.
As part of the Adviser Strategy, and following the release of Practical Compliance Guideline 2021/4 Allocation of professional firm profits – ATO Compliance approach (PCG 2021/4), we've been engaging with privately owned and wealthy group clients and advisers to:
- re-engage non-lodgers
- data match individual tax returns against professional firms' data
- assess compliance with PCG 2021/4.
We want to help advisory firms and individual advisers ensure they're set up to be compliant with their tax and super obligations.
Lodgment
All taxpayers have an obligation to lodge on time and pay the right amount of tax. Our preliminary analysis of professional firms within the privately owned and wealthy group population has revealed that partners' lodgment compliance is lower than expected.
We've commenced engaging with partners who have multiple overdue lodgments, to obtain lodgment, assess compliance with PCG 2021/4 and pursue liabilities. During 2023–24 we've raised $29.8 million in liabilities from these engagements, with $15.2 million payments received and a further significant amount under payment arrangements. We have ongoing monitoring in place to ensure continued compliance by these partners.
Payment
All taxpayers need to pay their tax bills in full and on time to avoid interest charges and firmer action. Taxpayers shouldn't wait for us to follow up with them for payment or expect concessions from us. Read our paying tax information to find out more about our expectations and your obligations.
Partnership distributions
We use risk modelling to assess compliance with PCG 2021/4. The guideline sets out our compliance approach to the allocation of profits or income from professional firms in the assessable income of the individual professional practitioner. Through our analysis of profit distributions, we've seen examples of distributions being:
- reported at incorrect labels
- only partially reported
- omitted in full.
Professional obligations
It's very important for all privately owned and wealthy group advisers to keep their personal tax obligations up to date, in line with community expectations and taxation laws. In addition, for advisers who are registered with the Tax Practitioners Board, it's a condition of their ongoing registration that they have compliant personal tax affairs.
As part of our Adviser Strategy, we'll continue to share insights and examples to help all advisers meet their obligations.