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ATO extends and expands small business review pilot

Maja Garaca Djurdjevic and Jotham Lian
Maja Garaca Djurdjevic and Jotham Lian
28 February 2020 1 minute readShare

Eligible small businesses will be able to participate in the ATO’s independent review service until the end of the year, after the Tax Office announced it is extending the pilot program beyond the 1 July deadline.

The Australian Taxation Office has extended its independent review service trial for small businesses to 31 December 2020, and expanded its scope to include income tax, goods and services tax (GST), excise, luxury car tax (LCT), wine equalisation tax (WET) and fuel tax credits (FTC).

The independent review service, aimed at early and fair resolution of disputes for small businesses, was launched by commissioner Chris Jordan on 1 July 2018.

Previously, the independent review process had been reserved for entities with a turnover greater than $250 million, designed to give both parties a better understanding of the issues and working towards resolving them.

While the pilot was initially set up to consider disputes involving only income tax audits, and for a period of 12 months, its success has encouraged the ATO to keep it going and expand its scope, deputy commissioner Scott Treatt told My Business sister title Accountants Daily.

“The pilot has delivered some good results so far. We’ve found that the service is helping us resolve disputes with small businesses earlier,” Mr Treatt said.

He revealed that as at 31 December 2019, 138 invited eligible small businesses have taken up the ATO’s offer since the pilot began.

“Pleasingly, we’ve only received two objections from businesses that have been through our independent review pilot since it launched on 1 July 2018,” Mr Treatt said.

“This result demonstrates that our pilot program is working as intended for small business in that it’s helping to resolve disputes prior to matters reaching objection.”

The pilot program will see eligible small businesses with an audit in progress contacted by their audit case officer with the offer of a review before issuing assessments.

According to Mr Treatt, small businesses can expect an independent officer from outside its audit area to review the facts and technical merits of the ATO’s audit position.

The most common issues that small businesses have asked the ATO to review to date include omitted cash income, administrative penalties, deductibility of business expenses and characterisation of payments to related individuals.

Superannuation, fringe benefits tax, fraud and evasion findings, and interest disputes are still excluded from the independent review service.

ATO extends and expands small business review pilot
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Maja Garaca Djurdjevic and Jotham Lian
Maja Garaca Djurdjevic and Jotham Lian

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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