Latest news with #AustralianTaxationOffice
AU Financial Review
5 hours ago
- Business
- AU Financial Review
Developers, hospitality operators in firing line over GST fraud
Tax authorities are auditing some of the country's largest property, construction and hospitality companies over concerns that fictitious arrangements are being used to improperly claim GST refunds. In a warning issued on Thursday, the Australian Taxation Office explicitly noted large companies in property, construction and hospitality were being monitored. The ATO's investigation tools have flagged that an increasing number of these companies are likely to be wrongfully claiming, in some cases, tens of millions of dollars in GST refunds.
Sky News AU
13 hours ago
- Business
- Sky News AU
Millions of Aussies don't believe they will have enough super to comfortably retire, according to new Finder research
Millions of Australians do not believe they will have enough super to retire, signalling a major crisis for the nation and its ageing population. This is the revelation from a recent Finder survey shared exclusively with that found 20 per cent of Aussies - equivalent to 4.3 million Aussies - do not believe they will have enough in their super to "get by" in retirement. Another 10 per cent said their super balance would be too low but would have enough in other investments by the time they retire. One in five said they will have enough in super but will need to cut back on their spending in retirement. Finder's superannuation literacy expert Pascale Helyar-Moray said these shock revelations show a comfortable retirement may be out of reach for many Australians. 'A lack of adequate retirement savings could leave millions of Australians financially vulnerable in their later years,' Ms Helyar-Moray said. 'There's a growing fear that retirement will arrive before the money does – leaving many Australians underprepared.' The research also showed that 27 per cent of Aussies are not sure if they will have enough super to get by in retirement, while 24 per cent were confident they could retire comfortably on their super. Women were worse off with 22 per cent believing they would not have enough super or investments to comfortably retire, compared to 18 per cent of men. Ms Helyar-Moray said many Aussies assume they will fall back on the age pension, however, she stressed this 'isn't guaranteed'. 'Your assets could disqualify you from receiving it,' she said. The Finder expert urged Aussies to make voluntary contributions through salary sacrifice to build a bigger safety net. 'Super earnings below $30,000 are taxed at a maximum of just 15 per cent, which means salary sacrificing into super could help grow your wealth while also lowering your tax,' she said. 'You won't be able to access your super until retirement, so it's wise to ease into it – $100 a month may not sound like much, but it can make a real impact over time.' She also encouraged Australians to shop around to ensure they are getting good returns and are not being slugged with excessive fees. Data from the Australian Taxation Office showed the average Aussie has $172,835 in super, while the median is much lower at $60,037. The Association of Superannuation Funds of Australia projects a 30-year-old earning the median income of $75,000 with a super balance of $30,000 could accumulate $610,000 in super by retirement. This comes above the $595,000 that ASFA estimates is needed for a comfortable retirement for single Aussies that own their home. Meanwhile, a homeowner couple needs $690,000 in super to reach the same level of financial security.
News.com.au
a day ago
- Business
- News.com.au
Questions raised after ATO wiped $1m bill from Paul Keating's company
The Australian Taxation Office (ATO) is under pressure to explain why it wrote off almost $1 million in interest and late penalties owed by one of Paul Keating's companies. An ABC Four Corners investigation has revealed that over a decade ago the ATO wrote off the debt in 2015 after years of negotiations. The debt was owed by one of Paul Keating's companies but wiped after negotiations with the former prime minister and his financial advisers. There is no suggestion of wrongdoing by Mr Keating or his advisers. Instead, the focus of the investigation is on why the ATO took the steps it did, given the fact that for most taxpayers formally challenging such a decision would require them to contest the matter in the Federal Court. However, the ABC reports in this instance, a payment notice was cancelled after a negotiation, raising questions about how the ATO chose to handle the matter. At the time, the Liberal Government was led by Tony Abbott and the Treasurer was Joe Hockey. There's no suggestion however that the Abbott Government was briefed on the decision to wipe the tax cut given the sensitivities around privacy and the ATO. The ATO and Mr Keating's office have been contacted for comment. The ABC's report states that the investigation raises 'questions about a lack of transparency in how the tax office conducts confidential settlements.' According to the ABC, an interest and penalties bill was issued after the ATO discovered in 2012 that Mr Keating's company, Brenlex Pty Ltd, had not reported profits from an earlier share sale. After Mr Keating was audited by the ATO in 2010 an agreement was struck according to the ABC for Mr Keating to settle tax liabilities of more than $3 million involving another of his companies, Verenna Pty Ltd. According to the ABC, Mr Keating was questioned about his other companies, including Brenlex, and his advisers confirmed it had paid a significant amount of tax relating to the sale of shares and was up to date with its tax liabilities. However, two years later the ATO discovered in 2012 that Paul Keating's company had not reported profits from a 2004 share sale. While Brenlex agreed to pay the tax debt, the ATO demanded the company pay more than $600,000 in interest and penalties which had accrued in the years since Mr Keating sold the shares. Mr Keating's advisers asked the ATO to write off this debt entirely via an ATO rule known as a 'commissioner's discretion'. The ATO commissioner at the time was Chris Jordan AO, who was appointed as the 12th Commissioner of Taxation on 1 January 2013. Mr Jordan led the ATO during the tumultuous pandemic period and during scrutiny of the ATO's role in the PwC tax leak scandal. does not suggest he was involved or aware of the decision to cancel the debt. According to the ABC, the argument over the tax debt went back and forth until the debt had grown to $904,000, at which point the ATO sent a formal notice to not waive the interest and penalties charge. 'Your request has been fully considered and it has been decided that on this occasion the circumstances detailed do not warrant remission of the GIC,' the notice said according to the ABC. 'There is a clear acknowledgment that the Company should have accounted for the disposal of shares in the relevant financial years returns and did not.' In 2015, Mr Keating's advisers became involved in the correspondence arguing the ATO should waive the bill because it was an honest mistake. As a result, 'the lodgement and payment of the Company returns were overlooked' but the tax office said 'This is not a valid justification'. In July 2015, 'a last-ditch letter from Brenlex was sent to the ATO requesting a meeting' Ten days later, the tax office sent a four-line email writing off the almost $1 million debt. 'I am able to confirm that the GIC and Late Lodgement Penalties … have been remitted in full,' the email said. 'Consequently the balance of the account has been reduced to nil and the amount payable as stated in the Creditors Statutory Demand is no longer owed.' Accounting experts have told the ABC that such negotiations are unfair because the only recourse available to taxpayers to challenge this kind of decision was an appeal to the Federal Court. This is a 'lengthy and complex process that is out of reach of most taxpayers'. The ATO's own website states 'Taxpayers should be aware that remission requests are carefully assessed to ensure a level playing field for those taxpayers who pay on time.' In a statement, the ABC told Four Corners that 'inadvertently overlooking' the need to pay tax was generally not valid grounds on which to cancel GIC. 'However, there may be instances where GIC is remitted when a taxpayer inadvertently overlooks the requirement to lodge a form or make a payment, depending on the individual circumstances of the taxpayer,' the ATO said.
ABC News
a day ago
- Business
- ABC News
ATO reversed its own decision to bill former PM Paul Keating's company nearly $1m after three-year battle
The Australian Taxation Office (ATO) wrote off almost $1 million in interest and penalties owed by one of Paul Keating's companies in 2015, in an abrupt about face after negotiations with the former prime minister and his financial advisers. This was unusual because for most taxpayers, formally challenging such a decision would require them to contest the matter in the Federal Court. In this case, the payment notice was cancelled after a negotiation, raising questions about the treatment of powerful people by Australia's chief revenue collection agency. It also raises questions about a lack of transparency in how the tax office conducts confidential settlements. Four Corners does not suggest any wrongdoing by Mr Keating or his advisers in seeking to have the debt cancelled. Four Corners first contacted Mr Keating two weeks ago to request an interview about how this settlement came about, but he declined. The interest and penalties bill was issued after the ATO discovered in 2012 that Mr Keating's company, Brenlex Pty Ltd, had not reported profits from an earlier share sale. This followed a 2010 agreement by Mr Keating to settle tax liabilities of more than $3 million involving another of his companies, Verenna Pty Ltd. At the time, Mr Keating was questioned about his other companies, including Brenlex, and his advisers confirmed it had paid a significant amount of tax relating to the sale of shares and was up to date with its tax liabilities. Mr Keating agreed he would ensure his tax affairs were in order henceforth. However, the ATO later discovered that Brenlex owed $446,000 in tax from the sale of shares years earlier in Lake Technology, an audio engineering company Mr Keating had advised. Brenlex agreed to pay the tax debt, but the ATO demanded more than $600,000 in interest and penalties which had accrued in the years since Mr Keating sold the shares. These are known as a general interest charge (GIC) and late lodgement penalties. Mr Keating's advisers fought to avoid the interest and penalties, asking the tax office to write them off entirely via an ATO rule known as a "Commissioner's discretion". The argument went back and forth through 2013 and 2014. By October 2014, the debt had grown to $904,000, at which point the ATO sent a formal notice to not waive the interest and penalties charge. "Your request has been fully considered and it has been decided that on this occasion the circumstances detailed do not warrant remission of the GIC," the notice said. "There is a clear acknowledgement that the Company should have accounted for the disposal of shares in the relevant financial years returns and did not." In April the next year, the ATO issued Brenlex a formal creditor's statutory demand to pay the debt within 21 days, which had now grown to $953,396. Mr Keating then became involved in the correspondence as part of efforts by his advisers to persuade the ATO to waive the bill because, they said, it was an honest mistake. Mr Keating's advisers told the tax office the former prime minister had mistakenly believed his company Brenlex had paid the tax. They argued he had "inadvertently failed to advise his directors" of the sale, despite filing a substantial shareholder notice reporting the disposal of the Lake Technology shares. Mr Keating's advisers argued "the lodgement and payment of the Company returns were overlooked" but the tax office said "This is not a valid justification". The ATO was told Mr Keating had truly, though incorrectly, believed that all tax matters with Brenlex were up to date. The tax office refused to alter its position. In July 2015, a last-ditch letter from Brenlex was sent to the ATO requesting a meeting. Ten days later, the tax office made a backflip. In a four-line email it wrote off the almost $1 million debt. "I am able to confirm that the GIC and Late Lodgement Penalties … have been remitted in full," the email said. "Consequently the balance of the account has been reduced to nil and the amount payable as stated in the Creditors Statutory Demand is no longer owed." The email gave no reason for the sudden change of heart. The ATO's reversal of its decision, having issued the October 2014 notice, was unusual. Just how unusual can be seen from a joint submission to a Senate committee this year by five accounting bodies. They said it was unfair that the only recourse available to taxpayers to challenge this kind of decision was an appeal to the Federal Court, which was a "lengthy and complex process that is out of reach of most taxpayers". They complained that these decisions were "not subject to an internal ATO review. The only recourse available to the taxpayer is to appeal the ATO's decision in the Federal Court". In a reminder published on its website last month, the ATO said: "Taxpayers should be aware that remission requests are carefully assessed to ensure a level playing field for those taxpayers who pay on time." These revelations come at a time when the ATO's handling of this issue is under review. The Tax Ombudsman is scrutinising the management of general interest charges, to ensure "decisions are fair and reasonable and are made consistently for taxpayers in like circumstances". Typically, the ATO does not comment on the tax affairs of specific taxpayers due to confidentiality obligations. It told Four Corners in a statement that "inadvertently overlooking" the need to pay tax was generally not valid grounds on which to cancel GIC. "However, there may be instances where GIC is remitted when a taxpayer inadvertently overlooks the requirement to lodge a form or make a payment, depending on the individual circumstances of the taxpayer," the ATO said.
Daily Mail
4 days ago
- Business
- Daily Mail
I knew something was off about a builder but I desperately needed the work… what they did next is a frustrating problem in the construction industry
The owner of a fencing company has vented his frustration after he was left $100,000 out of pocket when a builder suddenly collapsed. AH Fencing director Adam Hall said he noticed the builder had previously been late with payments, but he kept taking on work because he needed the money. He said the company then fell into liquidation in 2021 and its $300,000 in assets were sent to the Australian Taxation Office because it was owed about $3million. Mr Hall's money simply 'vanished' with the business owner admitting it isn't the first time a builder hasn't paid him for his work. 'While I'd love to sit here and blame the system and the builder, and I am p***ed off at them, we didn't lose that $100,000 all in one hit,' he said in a TikTok video in June. 'We lost that $100,000 one red flag at a time.' Mr Hall said the builder had been late with payments since the beginning of their contract, but he kept taking on work. 'They missed a payment and they promised us that we were going to get paid, so we continued to work, and then they missed that payment,' he said. @the_adamhall One of our builders went bust and took $100K with them. I'd love to sit here and play the victim. Blame them. Say it wasn't our fault. But the truth is — we lost that $100K one red flag at a time. They paid us late for months. Then they missed a few payments. And we kept showing up. Why? Because we didn't value ourselves. Because our pipeline was light. Because we ignored the signs. Looking back, it feels stupid — but it taught us a powerful lesson: Be proactive, not reactive. We don't work for builders who don't pay. We don't rely on one or two jobs to keep us afloat. We've built systems. We've built standards. We've built a pipeline that lets us walk away when it's not right. Another scar. Another win. Onwards. ♬ original sound - Adam Hall 'We were a little bit low on work, and so we just kept doing it. Looking back, it's obviously so stupid.' He said the missed payday was 'a kick in the teeth', as his own business was struggling. 'Since then, a bunch of builders we've worked for have gone under. Fortunately, they haven't owed us a lot of money,' Mr Hall said. 'These builders hold no assets and they have s***loads of ATO debt. So the chance the liquidators are ever going to give you any money is so close to nil.' He urged other trades and subcontractors to implement strong protections. Mr Hall warned they should stop work as soon as payments are missed and look into options like trade credit insurance. 'As much as I'd love to sit here and be the victim and blame this builder for going under, ultimately, there's a lot of things that we could have done about it to avoid it, and that's what we do now, and that's why we have no late payers anymore,' he said. Other builders who saw the video said they had also learned to be tougher after similar experiences. 'Been here too mate. Got done for $75,000 last year by a builder that went under,' one said. 'I asked my insurer about some sort of insurance to protect us, but he hadn't heard of it. Now I know it's called 'Trade credit insurance' I'll definitely look at getting it.' 'The system needs to change. The person who's building the house pays every sector,' another suggested. 'Soon as they are late you stop work,' another advised. 'No work is better than lost materials and labour costs. Also needs better contracts - if they shy away from signing, walk away.'
