The Australian Tax Office (ATO) has begun to crack down on Capital Gains Tax (CGT) concessions after finding that a number of larger and wealthier businesses are issuing claims that they are not entitled to.

It was announced in a statement published by the ATO on Tuesday 16th November 2021 that there has been a noticeable trend where some businesses are mistakenly claiming small-business Capital Gains Tax concessions in recent income tax returns.

“If your clients have claimed one or more small business Capital Gains Tax concessions in recent income tax returns, you or your clients may receive a letter from us. The letter will ask you to check your clients’ claims and ensure that they meet the basic eligibility conditions, and that they have records to substantiate their claim,” said a statement issued by the ATO.

The ATO has said that tax professionals are encouraged to check all their clients’ recent or planned future small-business CGT concession claims and to make sure that they are accurate.

“To ensure small business CGT concession eligibility and avoid administrative time to correct a mistake you can: reach out to us for an early engagement discussion to seek advice on your client’s small business complex transaction; seek a pre-lodgment compliance agreement for your client’s commercial deals and restructure events; [or] apply for a private ruling to attain certainty on your client’s application of small business CGT concessions. You can see what attracts our attention for small business CGT concessions and contact us if you identify an error with any of your [clients’] claims,” said a spokesperson for the ATO.

The ATO Plans to Auto-Call ABN Cancellations

The Australian Tax Office (ATO) has announced that Australian Business Number (ABN) holders or their accountants might be contacted by the tax office during the months of November and December 2021 as it moves to automate its ‘intent to cancel’ program.

ABNs can be selected for the cancellation program if the tax office cannot detect any business activity in their tax return or other lodgements or third-party information.

Therefore, businesses are being urged to report any income earned under their ABN in their tax return, regardless of the amount.

“By keeping their tax obligations up to date, we can see they are actively undertaking a business, therefore their ABN should not be cancelled,” said the ATO in a statement to the media.

The ATO has outlined that if an ABN is cancelled, the business will be required to re-apply to activate it again. If an ABN is no longer needed, then the holder should go online and cancel it.

Businesses are also being urged to ensure all ABN details contain up-to-date information on authorised contacts; the organisation’s physical location; postal address; email address and phone number.

“Updating your ABN details might be the last thing on your mind but it is important to keep your organization’s contact details up to date, especially as the risk of natural disasters like bushfire and storms increases at this time of year. During times of emergency or natural disaster, your ABN details are used by emergency services and government agencies to help identify businesses in affected areas that might need help or support. If your ABN details are out-of-date you risk missing out on important assistance, updates or opportunities such as grants,” said a statement released by the ATO.