Latest / Money News / Be warned: ATO targeting side hustles and second jobs 💰🤑💳

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Be warned: ATO targeting side hustles and second jobs 💰🤑💳 · Money News

• 0:00
  S1: The end of the financial year is approaching. So today
• 0:02
  S1: is June 23rd. We've got a week to go until
• 0:05
  S1: the end of the financial year. And there's an interesting
• 0:08
  S1: warning from the ATO. Now the tax office has sent
• 0:12
  S1: out hundreds of thousands of letters and emails reminding people
• 0:16
  S1: to include income from side hustles and jobs, rental income, shares, crypto.
• 0:22
  S1: And a lot of these platforms like Uber are and
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  S1: also airtasker now, where people are using the gig economy
• 0:28
  S1: more and more and far more broadly than ever. At
• 0:32
  S1: the same time, the ATO has ramped up its compliance
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  S1: orders over the past 12 months, often applying the screws
• 0:38
  S1: to small businesses as it attempts to recoup $50 billion
• 0:42
  S1: worth of unpaid tax and the number of fines issued
• 0:45
  S1: to individuals for not paying their tax on time has
• 0:48
  S1: also increased over the past few years. Anita Challen is
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  S1: the assistant commissioner at the ATO. She's on the line
• 0:54
  S1: for us tonight. Anita, thanks for your time.
• 0:57
  S2: Thanks, James. Great to be here.
• 0:58
  S1: So firstly, just explain these letters and these emails. Why
• 1:02
  S1: have they been sent out to people this time?
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  S2: Yeah. Look, the letters that are prompt and remind taxpayers
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  S2: to report all of the income that they've earned, ensuring
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  S2: that they get their tax returns right the first time.
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  S2: So fully complete and accurate. Most taxpayers probably don't want
• 1:20
  S2: to do their tax returns once, let alone twice. So
• 1:23
  S2: what we try and do is use the data that
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  S2: we have access to to make sure that taxpayers understand
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  S2: their obligations. That's across, you know, registrations, lodgement reporting correctly
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  S2: and of course, paying as well. And these letters are
• 1:36
  S2: designed to go out hopefully prior to your lodging, your
• 1:39
  S2: tax return. And we certainly are, um, you know, seeking
• 1:44
  S2: for taxpayers, as you said, to just take a little
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  S2: bit of time, wait before they lodge and get it right.
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  S2: And this information we hope will be helpful when they
• 1:52
  S2: do lodge their tax returns.
• 1:53
  S1: So are you noticing because of the growing gig economy
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  S1: where a lot of people might be doing, you know,
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  S1: jobs for an online platform? And I'm just using examples,
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  S1: but possibly Uber or Airtasker and a lot of people
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  S1: now would have two or maybe even three jobs. Does
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  S1: that make it more complicated with their tax return? And
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  S1: are you seeing a pattern where people may be declaring
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  S1: income from their primary job, but not their side hustle?
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  S2: Yeah, it's definitely a focus for us this year in
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  S2: in that many people forget how broad income is when
• 2:27
  S2: it comes to declaring all of what you've earned in
• 2:30
  S2: the year in your tax return. And you're right to
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  S2: note that whilst most people understand and make sure that
• 2:36
  S2: they put in things like salary and wages or employment income,
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  S2: they might forget some of the other income that they've
• 2:43
  S2: earned or not. Consider that it is income that they
• 2:46
  S2: need to declare on their tax return. And so these
• 2:48
  S2: sorts of letters and prompts, again, are just to remind
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  S2: taxpayers that, in fact, it is income that we've got
• 2:54
  S2: the information shared with us through these online platforms. And
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  S2: to hopefully help them get it right and make sure
• 3:01
  S2: that they do include it in their tax return.
• 3:03
  S1: And sorry, just so I'm really clear, Anita, who has
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  S1: received these letters and in what circumstances are they sent out.
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  S2: Yeah. So we get information. So data from online platforms
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  S2: that are operating in Australia. And it'll be the information
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  S2: from that that we would use to determine who we
• 3:24
  S2: send these letters to. So that includes taxpayers that may
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  S2: have earned payments, um, for things like ride sourcing, taxi drivers,
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  S2: limiting limousine or delivery services as well, those that are
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  S2: engaging in short, short term accommodation or property sharing arrangements
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  S2: and providing those on online platforms. If you're selling or
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  S2: creating digital content or online entertainment, uh, task based or
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  S2: freelance operators. So essentially any taxpayers where we've received information
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  S2: from those online platforms to indicate that they are operating online,
• 4:03
  S2: that they're receiving payments and income by sharing services via
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  S2: those platforms. That's who we're specifically going to send this
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  S2: information to.
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  S1: Now, in relation to the Ato's approach. I'd just be keen,
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  S1: because there have been stories in recent times about how
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  S1: the number of people that have been fined or penalised
• 4:22
  S1: for not paying a tax return on time has increased,
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  S1: as has the approach towards small businesses who may not
• 4:29
  S1: have paid their tax on time. Can you just talk
• 4:32
  S1: us through wider the ato's approach, and why? It seems
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  S1: from the outside that you have ramped up compliance and
• 4:40
  S1: on on time repayments in the last 12 to 18 months?
• 4:44
  S2: Yeah. So look, James, our goal is first and foremost
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  S2: to help Australians fulfill their tax obligations by getting it
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  S2: right the first time. Hence these sorts of letters and prompts.
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  S2: As we've talked about, we usually only apply penalties when
• 4:58
  S2: we really need to. And of course that does depend
• 5:01
  S2: on the individual facts and circumstances that a taxpayer may
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  S2: be in. Um, ultimately, we first try and nudge taxpayers
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  S2: to review their tax return if we believe that there
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  S2: are some discrepancies. So for those lodging via our online services.
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  S2: You might notice some nudges or prompts to say, hey, this,
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  S2: this might not look quite right. Or, um, you know,
• 5:21
  S2: we want you to have a closer look at that.
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  S2: And it's only in those instances where you might either
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  S2: ignore or in some instances, intentionally disregard what that information
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  S2: might look like, that we then apply some penalties. I think,
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  S2: you know, certainly our role is primarily to ensure that
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  S2: we do, um, do everything that we can to ensure
• 5:44
  S2: that taxpayers are meeting those tax obligations. And we do
• 5:47
  S2: take that quite seriously, whether that's in terms of those
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  S2: that perhaps aren't playing fair in terms of lodging on
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  S2: time and or those that are taking extra time to
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  S2: make those payments whilst others are doing everything they can
• 6:00
  S2: to pay in full and on time.
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  S1: So just in general terms, because the story that I've
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  S1: heard repeatedly from some small businesses is that they offer
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  S1: themselves up for a repayment plan, and there have been
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  S1: a record number of calls to these small business national hotlines,
• 6:13
  S1: financial helplines to be getting help. And the feedback we
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  S1: have got this time around is that the ATO is
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  S1: far more strict and not as keen to be allowing
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  S1: people to pay their debts back over a period of time.
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  S1: So is it correct that you would rather write the
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  S1: money off than reclaim it? Because it seems like a
• 6:34
  S1: lot of small businesses feel like you're not playing ball
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  S1: the way that you used to?
• 6:38
  S2: Yeah. Look, James, there certainly is support available for small
• 6:41
  S2: businesses and individual taxpayers, including through payment plans. Of course,
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  S2: we do need to account for the personal circumstances and
• 6:49
  S2: ensure that payment plans are affordable for small businesses. I
• 6:52
  S2: think seeking out help, as you've described it, is a
• 6:55
  S2: is a great thing in terms of getting advice, all
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  S2: support from a financial counsellor and our message to all
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  S2: taxpayers is, the sooner that you engage with us and
• 7:04
  S2: reach out for that support, the better able, where the
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  S2: better able we are to determine what the appropriate support
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  S2: is based on the circumstances. The longer you wait, the
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  S2: more cumulative the effects start to be, and the more
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  S2: difficult it becomes for small businesses and others to recover
• 7:20
  S2: from that debt position.
• 7:22
  S1: But just to be clear, Anita, because the small business
• 7:24
  S1: advocates are the ones that are telling us that this
• 7:27
  S1: is a problem. So would the ATO rather write that
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  S1: money off and have it cleared off the books, then
• 7:33
  S1: be dealing with someone for the next 4 to 5 years?
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  S1: Because at the end of the day, I know there's
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  S1: $50 billion worth of unpaid tax, but I just don't
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  S1: understand why the ATO wouldn't allow someone to take a
• 7:44
  S1: little bit longer to pay the money back if a
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  S1: small business is determined to make those repayments.
• 7:49
  S2: Yeah. No, look, I'd say, James, we're always looking for
• 7:52
  S2: options to support small businesses. So it's always our intent
• 7:55
  S2: to look for the most affordable payment plans. Um, there
• 7:59
  S2: certainly will be situations where small businesses won't be able
• 8:03
  S2: to meet the terms and conditions of payment plans. Um,
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  S2: and we do consider those circumstances very carefully. Um, we're
• 8:10
  S2: always looking for ways to work with a small business.
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  S2: And of course, regardless of payment plans or not, small
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  S2: businesses can pay amounts at any time to try and
• 8:19
  S2: get back on track when it comes to tax debts.
• 8:21
  S1: It's more than $50 billion. I mean, have you made
• 8:24
  S1: any sort of dent in that money? That's $50 billion
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  S1: unpaid taxes? And as a taxpayer, I'm keen to know
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  S1: how you're going in recouping that and when it will
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  S1: be halved. I mean, it's grown. It's doubled more than
• 8:37
  S1: doubled in the last 6 or 7 years to more
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  S1: than $50 billion. Are you having any luck recalling or
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  S1: recouping those funds?
• 8:45
  S2: Yeah. Look, we continue to do everything we can to
• 8:47
  S2: ensure that we meet our obligations in terms of ensuring
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  S2: we collect the revenue that government needs to provide those
• 8:53
  S2: important community services. Um, and we are making sure that
• 8:57
  S2: we put everything into that, that we can. These sorts
• 9:00
  S2: of approaches in terms of sharing information beforehand to prevent
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  S2: people from getting into circumstances such as long term debts
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  S2: and things like that are a really important part of
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  S2: that approach. And so our focus continues to be not
• 9:15
  S2: only in terms of collecting that debt, but also looking
• 9:17
  S2: at those preventative approaches as well.
• 9:20
  S1: Anita, I really appreciate your time and your expertise. Thank you.
• 9:23
  S2: Thanks, James.
• 9:24
  S1: Anita Callan, the assistant commissioner at the ATO, joining us
• 9:27
  S1: on Money News tonight.