Stay Ahead of the ATO: Key Tax Risks for 2024-25 and How Ashmans Can Help

Discover 2024-25 ATO tax risks and ways to keep your finances secure

November 5, 2024

As the ATO outlines its key focus areas for the 2024-25 financial year, businesses in Adelaide need to stay compliant to avoid penalties. The ATO is targeting areas such as succession planning, private equity risks, and GST compliance in industries like retail and construction. This is where expert guidance from Adelaide accountants becomes crucial.

At Ashmans Accounting, our experienced team of accountants in Adelaide helps businesses navigate these complex areas. Whether you’re looking for support with tax planning or compliance, our accountants Adelaide ensure your business stays on track.

Let’s take a closer look at the foundational issues the ATO will be focusing on for the financial year 2024-2025, and how these areas could impact businesses.

Foundational Tax Compliance Issues: ATO’s 2024-25 Priorities

The ATO’s key focus areas for 2024-25 include foundational issues like incorrect tax registration, failure to lodge returns, and not paying tax debts on time. It also targets incomplete reporting, particularly with omitted income and ineligible R&D claims. Division 7A shareholder loans, capital gains tax (CGT) concessions, and misreporting in property and construction are under scrutiny. International transactions involving related-party financing and domestic issues like family trust elections and self-managed super funds are also being examined for compliance.

• Incorrect tax registration: Not registering or registering incorrectly for tax obligations.

• Late lodgment: Failure to lodge returns or activity statements on time.

• Unpaid tax debts: Not paying tax debts or engaging with the ATO.

• Incomplete reporting: Omitted income, ineligible R&D claims, and incomplete activity statements.

• Division 7A loans: Mismanagement of shareholder loans.

• Capital gains tax (CGT): Incorrect application of CGT concessions.

• Property misreporting: Errors in reporting property sales.

• International transactions: Misreporting related-party financing.

• Domestic issues: Family trust elections and self-managed super funds compliance.

Our Insights

At Ashmans Accounting, we see the ATO’s increased scrutiny as a call for businesses to stay proactive about their tax compliance. Common issues like incomplete reporting, improper CGT claims, and shareholder loan mismanagement under Division 7A can lead to serious penalties if not addressed properly. 

Our expert Adelaide accountants can help ensure that all your tax obligations—from accurate reporting to R&D claims—are handled effectively. With the ATO’s focus on transparency and compliance, having professional guidance is key to avoiding costly mistakes and maintaining smooth business operations.

Emerging Tax Risks: What Businesses Should Watch in 2024-25

The ATO’s focus on emerging risks for 2024-25 includes over-claimed deductions in trusts and non-eligible R&D lodgments. They are also scrutinising inappropriate GST credits, capital gains misreporting (Division 149), and tax minimisation strategies involving private ancillary funds. New areas of concern include trust loss trafficking, share buybacks, and cryptocurrency business models. Additionally, the ATO is enforcing thin capitalisation rules and capping super balances at $3 million for tax benefits.

• Over-claimed deductions in trusts.

• Non-eligible R&D lodgments.

• Inappropriate GST credits.

• Capital gains misreporting (Division 149).

• Tax minimisation strategies using private ancillary funds.

• Trust loss trafficking.

• Share buybacks scrutiny.

• Cryptocurrency business models under review.

• Thin capitalisation rule enforcement.

• $3 million superannuation cap for tax benefits.

Our Insights

At Ashmans Accounting, we interpret the ATO’s focus on evolving risks as a signal for businesses to strengthen their tax reporting and planning. 

Misreporting on capital gains, ineligible deductions for trusts, or incorrectly claiming R&D or GST credits can trigger audits. For businesses involved in cryptocurrency or share buybacks, professional advice is critical to ensure compliance with the ATO’s emerging tax rules. 

Our Adelaide accountants can help you navigate these complex areas, minimise risks, and ensure your tax planning strategies align with the latest ATO regulations.

ATO’s 2024-25 Areas of Focus: Succession Planning, Private Equity, and Industry-Specific Scrutiny

For 2024-25, the ATO is concentrating on key risk areas. Succession planning is a major focus due to Australia’s ageing population, with increased scrutiny on the transfer of wealth and assets. In the private equity sector, the ATO is monitoring all stages of the investment lifecycle, from pre-acquisition to exit. The retirement village sector is under review for GST and income tax issues, particularly misuse of GST-free provisions and related party transactions. Additionally, the retail and construction industries are being examined for incorrect GST reporting and intragroup transactions.

Succession Planning: Increased scrutiny due to the aging population, focusing on transferring wealth and assets.

Private Equity: Attention on all stages of the investment lifecycle, including pre-acquisition, holding, and exit phases.

Retirement Villages: Reviewing GST and income tax compliance, particularly misuse of GST-free provisions and related party transactions.

Retail and Construction: Examining incorrect GST reporting on supplies, acquisitions, and commercial adjustments.

Intragroup Transactions: Investigating potential underreporting of GST in transactions within private groups.

Our Insights

At Ashmans Accounting, we interpret the ATO’s focus on succession planning and private equity as a crucial reminder for Adelaide businesses to prioritise tax compliance and strategic planning. With succession planning under the spotlight, business owners should review their plans to ensure they align with the ATO’s guidelines, minimising potential risks.

For those involved in private equity, the ATO’s increased scrutiny means that each stage of the investment lifecycle needs close monitoring, from acquisition to exit. Ensuring proper reporting and compliance at each stage is vital to avoid penalties.

The focus on retirement villages signals a need for businesses in this sector to carefully review their GST and income tax reporting, particularly around supplies of going concern and GST-free provisions. Similarly, businesses in the retail and construction industries must ensure they are correctly reporting GST on all transactions, including intra group dealings.

Contact Us Now

Ensure your business stays compliant and aligned with the ATO’s latest regulations by partnering with Ashmans Accounting. 

Whether you need support with succession planning, private equity investments, or GST reporting in the retail and construction industries, our team provides practical, scalable solutions tailored to your needs. 

From day-to-day financial management to annual tax compliance, we’re here to guide you. Let Ashmans Accounting help you navigate these complexities with expert tax planning, business structure advice, and more. Contact us today to safeguard your financial future.