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The Taxman is Coming After You and He Could be Wrong, Warns Accounting Professional
Although tax officials will be gunning for those who fail to pay the tax they rightfully should, Taxation expert Thomas Mousa of TLK Partners warns that it’s the law-abiding who might stand to lose the most – and the evidence is in the ATO annual report.
“People are inclined to think the ATO is correct just because it’s the ATO, and with our complex tax environment, they’re inclined to accept they’re in the wrong when they should be digging deeper,” says Mousa.
The Report That Doesn’t Quite Say it All. Source: ATO annual report 2018
The ATO annual report for 2018 indicates a significant discrepancy between original ATO bills and settled amounts. What Thomas Mousa finds the most worrying is the fact that these figures represent settlements after appeal. He believes that most people who find themselves facing an unexpectedly high tax liability simply pay up the difference and never appeal at all.
“Put yourself in their shoes,” he says. “They’re individuals or smaller organisations and they’ve done the best they can with their tax reporting. Next thing, they hear they were assessed at a higher rate. Well, they aren’t the experts, and unless the amount is disastrously high, they’ll probably just pay up.”
“Look at those figures again, especially the ones for individuals and wealthy. There’s a 60 to 65 percent variance between what the ATO said they owed and what they really owed. What happened to the people with a ten, fifteen, twenty, or even fifty percent discrepancy in assessed value? Are we to assume that the ATO is either totally wrong or absolutely right with nothing in between? And look at the market sectors that bear the brunt. It’s mostly private individuals and small organisations: the two most vulnerable sectors.”
The ATO Isn’t the Bad Guy – You Just Need Knowledge on Your Side
Thomas Mousa believes we should look at the figures on tax bills, settled amounts, and variance as a salutatory lesson in approaching taxation from an informed perspective: “As we start looking at larger entities, we see the variance percentage dropping,” he says.
“By the time we’ve reached the level of multinationals and public corporations, we’re only seeing a variance of 26 percent. The figures tell their own story. It’s the organisations with knowledge-based resources that are successfully renegotiating their tax bills.”
At this point, many a taxpayer will give up in despair. After all, becoming a tax accounting professional isn’t something you can do overnight, but getting the right expertise working for you needn’t be a costly business.
“If you suspect you might be paying more tax than you should (and a lot of people are), you need to talk to professionals like our team at TLK Partners,” says Mousa. “We would never help people to evade tax, but we can help them to minimise unnecessary taxation.”
Preparing for a solid financial future takes a team like that of TLK Partners, says Mousa, and having your accounting and tax experts under the same roof as your investment advisors, property, and legal specialists means that the team is a well-coordinated one. Visit TLK Partners, Chartered Accountants and Wealth Management Company website, or call (02) 8090 4324.
This material is of a general nature only, it does not take into consideration your financial circumstances, needs or objectives. Before making any decision based on this content, you should assess your own circumstances, seek professional advice or contact our office to be directed to the appropriate professional. Whilst all care has been taken in presenting the material neither TLK Partners or its associated entities guarantee that the material is free of error and, the information may have changed since being published.
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Release ID: 451857