Grim news for those caught under this new data-matching program started by the ATO.
The ATO will be reviewing all car sales over $10,000 that was made in the 2007 / 2008 financial year. Apparently, 1.7 million sales records fall under this category. The information has been provided to the ATO via the motor registries around Australia.
The previous crackdown in 2008 was for "luxury" car sales over $57,000. In that case, a whooping 70% of investigations yielded a tax liability for the ATO. A very good return on investment, indeed..!
So, no surprise that its now chasing after the "middle-class".
WHO DOES IT AFFECT?
1. Employers who have provided their employees with car benefits.
Any benefit provided to your employees outside of wages & salaries is subject to the Fringe Benefits Tax (FBT) rules.
The ATO will be catching out any employers who have not been declaring FBT on car benefits to employees.
2. Persons who appear to be living beyond their financial means.
If you declare a taxable income of only $10,000 but buys a car worth $30,000, then that's suss...!
The ATO will be investigating you to see whether or not you have been paid in cash and not declaring it.
3. Persons who buy and sells cars regularly for profit.
There is a strong distinction between "car enthusiasts" & "car dealers". Its the ol' hobby vs. business argument. It's commonsense at the end of the day.
If you are turning over 50 cars a year, you may be classified as a business..!! The ATO will be looking at classifying those profits as undeclared capital gains on sale.
If you fall under any of the above, it might be a good idea to see a tax accountant to suss out potential liabilities, etc.
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