The end of year tax updates emphasise the ATO’s focus on efficiency, equity, and compliance. Key changes like PAYG increases, GST fraud measures, and ABN accuracy demand businesses stay proactive and vigilant.
The Australian Taxation Office (ATO) continued to intensify its focus on compliance, fraud prevention, and delivering efficiencies to the tax system at the close of 2024. This last quarter brought several important tax updates and initiatives that businesses and individuals should take note of. Here is an overview of the recent developments, covering adjustments to PAYG instalments, efforts to curb GST fraud, community reporting trends, obligations for festive season employees, and more:
A new PAYG adjustment factor introduced
To reflect Australia’s economic growth, measured by the latest gross domestic product (GDP) increase, the PAYG (Pay As You Go) instalment adjustment factor has been raised to 6% for the 2024-2025 financial year[i]. This change applies to taxpayers who rely on standard ATO-calculated instalment rates and impacts both quarterly and twice-yearly payment schedules.
However, taxpayers who manually calculate their PAYG instalments or pay them annually remain unaffected by this adjustment. Businesses experiencing significant deviations in income for the year can use the ATO’s digital services, such as Online Services for Business, to vary their PAYG instalment amounts, ensuring payments are more aligned with expected tax liabilities.
Combatting GST fraud with pilot programs
The fraud risks associated with GST refunds continue to rank high on the ATO’s agenda. To mitigate these risks, the ATO has announced several pilot programs set to launch in 2025[ii]. These initiatives aim to simplify GST reporting for small businesses, encourage more frequent payment schedules, and reduce compliance complexities.
The programs will leverage modern technology, embedding GST rules directly into small business software to guide business owners towards correct reporting from the outset. By streamlining the tax process, the ATO hopes to empower small businesses to focus more on growth and less on administrative burdens while maintaining the integrity of Australia’s tax system.
Community tip-offs on the rise
Australians are becoming increasingly vigilant when it comes to tax evasion. During the 2023-2024 period, the ATO received over 47,000 community tip-offs, with a staggering 90% of these tips deemed worthy of further investigation[iii].
Industries bearing the brunt of these reports include building and construction, cafes and restaurants, and the hair and beauty sectors. Common violations raised by informants included cases of income not declared, the use of cash payments to avoid tax or superannuation obligations, and unexplained wealth when individuals’ lifestyles did not match their reported income. This trend underscores the growing public role in supporting compliance and combating tax fraud in Australia.
Seasonal employees and tax obligations
For employers who ramped up their workforce during the festive season, the ATO has highlighted the importance of staying compliant with tax and superannuation obligations for both temporary and permanent hires. The rules for hiring holiday staff remain as stringent as those for regular employees.
Employers must ensure they withhold the correct amount of tax from payments made to their employees and fulfill Super Guarantee (SG) obligations by paying the required contributions to their super funds. Failure to comply may result in penalties, including the Super Guarantee Charge (SGC). Employers are also reminded that Single Touch Payroll (STP) reporting must commence for new employees as soon as they receive their first paycheck, unless prior exemptions are in place.
High-profile GST fraud cases
The crackdown on individuals and entities exploiting the GST system remains in force, with recent cases bringing heightened awareness. A Victorian woman was sentenced to four years in prison after submitting 27 fraudulent business activity statements (BAS), collectively claiming nearly $600,000 in illegal GST refunds[iv].
This case forms part of Operation Protego—an extensive ATO-led initiative established to dismantle GST fraud networks. To date, 104 individuals have been arrested as part of this operation, and 59 have faced convictions. Besides imprisonment, fraudsters are being pursued to recover the funds they unlawfully obtained. These strong enforcement measures serve as a stark warning against intentional tax violations.
Small business litigation funding opportunities
Small businesses disputing ATO decisions at the Administrative Appeals Tribunal (AAT) could ease their financial burdens through litigation funding provided by the ATO[v]. This provision offers coverage for “reasonable” legal expenses, but eligibility criteria apply:
- Businesses must have an annual turnover under $10 million.
- Disputes must not involve tax avoidance, fraud, or cash economy issues.
- The business must not have a track record of failing to lodge tax returns.
This funding is tailored to assist genuine small businesses in having their voice heard without being deterred by prohibitive legal costs.
Maintaining accurate ABN details
Business owners holding Australian Business Numbers (ABNs) are reminded to regularly update their details on the Australian Business Register (ABR). This includes ensuring accuracy in contact information, business address, and activity details. Failing to keep ABN entries up-to-date may result in missed communications, financial support, or government grants.
Regular updates safeguard businesses’ access to critical assistance and ensure their compliance in a digitally integrated tax environment.
These tax updates emphasise the ATO’s focus on efficiency, equity, and compliance. Key changes like PAYG increases, GST fraud measures, and ABN accuracy demand businesses stay informed. Proactive management and consulting tax professionals are essential for adapting to regulations and ensuring smooth, legally compliant operations.
If you would like more information or further clarification on the new tax measures and how they affect you, or if you need assistance with your tax return, contact our office today.
DISCLAIMER: All information on Focus Wealth Advisers is general in nature and does not take into account your personal objectives, financial situation, or needs. You should consider your personal circumstances and seek professional advice before making any decisions based on this information.
[i] ATO (2024) GDP adjustment for 2024-25 GST and PAYG instalments
[ii] ATO (2024) Australian Taxation Office corporate plan 2024-25 – Key focus areas
[iii] ATO (2024) Making a tip-off
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