The ATO will match the data provided by the State and Territory motor vehicle registering authorities against the ATO’s taxpayer records with the objective of identifying those who may not be meeting their registration, reporting, lodgment and payment obligations. They want to ensure not only that your car deductions are reasonable but also that the car you won corresponds with the income you declare.
Details will be requested where records indicate a vehicle has been transferred or newly registered during the 2016/17, 2017/18 and 2018/19 financial years where the purchase price or market value is equal to or exceeds $10,000 (approximately 2 million transactional records a year).
This data will allow compliance checks on luxury car tax, FBT and fuel schemes, as well as identifying higher risk taxpayers with outstanding taxation lodgments, and those with undeclared income or concealing the real accumulation of wealth.
This can affect you in a couple of ways:
1. You are an individual and your car is worth more than you make
The ATO may wonder how you can afford it and whether you are not declaring all your income. Whilst there may be perfectly reasonable explanations (typically it happens if there is a one large income earner in the family but both partners have expensive car registered in their names), it is best to have your affairs in order and be ready for when they come and ask questions.
2. You are a business and you didn’t pay fringe benefits tax or reported contribution towards private use of the car.
We normally sort these out for all our clients at year end, but we can not stress this enough – get your logbooks up to date!
For all your tax needs, call your Brisbane accountants on 07 3160 7386.
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