ATO to crack down on asset write-off abuse
H&R Block have outlined their tax office predictions for 2016, with small business write-offs set to come under increased scrutiny.
"The small business community widely welcomed the introduction of the $20,000 instant asset write-off for small businesses in the last federal budget, but the ATO was quick to spot the potential for abuse of these general new rules," noted Mark Chapman, director of tax communications for H&R Block.
Mr Chapman added that the ATO has previously attempted to warn businesses not to stretch the rules by claiming deductions for assets used privately, such as works of art, or using 'creative financing' to claim deductions for assets which cost over $20,000.
"As taxpayers start to submit tax returns including claims under the instant asset write-off rules, we reckon these deductions will be closely scrutinised by the ATO, and there is likely to be high-profile audit action against those who are stretching or breaking the rules," said Mr Chapman.
H&R Block also predicted that rental property income, undeclared capital gains and undeclared foreign income would serve as key 'hot spots' for ATO auditors in 2016.