Lodgement compliance of privately owned professional firms with “wealthy group populations” has found private, wealthy professional advisers are less compliant than the ATO had expected.
As part of its Tax Avoidance Taskforce Adviser Strategy, the ATO is aiming to help strengthen the integrity of the tax and super systems by recognising the important role advisers play in supporting businesses.
It added that taxpayers take their lead from their advisers, so advisers must ensure their own tax and super affairs are in order.
“We recognise that most advisers do the right thing and uphold high ethical standards,” said the ATO.
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), the ATO has been engaging with privately owned and wealthy group clients and advisers to try to reengage non-lodgers, data match individual tax returns against professional firms’ data and assess compliance with PCG 2021/4.
It is now starting to engage with partners who have multiple overdue lodgments to obtain lodgment, assess compliance with PCG 2021/4, and pursue liabilities.
During 2023–24 it raised $29.8 million in liabilities from these engagements, with $15.2 million in payments received and a further significant amount under payment arrangements.
The regulator also said that it has found from its analysis of profit distributions that there have been examples of distributions being reported at incorrect labels, only partially reported, or omitted in full.
It said it is 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, it said for advisers who are registered with the TPB, it’s a condition of their ongoing registration that they have compliant personal tax affairs.
