The Australian Taxation Office (ATO) will investigate up to 160,000 individuals and entities that have registered a boat in the past 2 years, according to Deloitte tax partner David Pring.
“We are looking to flush out areas of non-compliance in areas of tax,” he says, adding that his advice to business owners is “to make sure your tax records are up to date, and all of your tax affairs are in order”.
“Business owners who own a boat need to focus on risks associated with the business. They can often be complex. There are issues within a business that aren’t black and white and legislation or requirements may change over the years.”
As Pring explains: “The ATO is embarking on a data matching exercise of all individuals and organisations that have registered boats in Australia. The data will be matched with tax office records to attempt to highlight areas of non-compliance with tax obligations.”
Pring recommends conducting a self-audit or bringing in an independent expert to “assess the risks and give their assessment of what could come up if the tax office came looking”.
“What we’re looking at is that taxable incomes are sufficient to support boat that’s being purchased, mostly targeting people outside the tax system, buying boats with cash. Australians should be happy that the ATO is working on this.”
Adding one more pressure to the boating sector is an unfortunate coincidence. “It is certainly interesting timing given the announcement as it coincides with soaring fuel prices and is at a time when boat sales are suffering in the current economic times.
“It is also curious that the announcement comes just before the Sydney Boat show, the biggest boat show in Australia.”
Boat owners will not know that they are under investigation as the program will be run as a data matching exercise. The tax office will be contacting boat owners only if they find an issue that needs to be clarified or actioned.
“The ATO will be examining the taxation records of registered boat owners to ensure that there are no outstanding lodgements or payment obligations. The examination is likely to be across all tax areas including income, tax, superannuation, GST, FBT and not just boat related issues.”
Child support could also be included in the mix.
by Jeni Bone
10:59 PM Tue 22 Jul 2008 GMT
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