ATO's urgent warning to tradies over 'growing' tax trend: 'We will not tolerate'
These issues have also been noticed in privately owned and wealthy groups, and the ATO wanted to send a "clear message" to stamp it out. Assistant Commissioner Adam O'Grady said despite previous warnings against this behaviour, it's clear this trend is "growing".
"While the numbers of businesses involved are relatively small, some are attempting to claim tens of millions of dollars in GST refunds they're not entitled to," he said.
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"Most businesses do the right thing. What these others are doing is simply not fair. We're dealing with dishonest and deliberate attempts to cheat the tax system.
"We will not tolerate this fraudulent behaviour deliberately undermining the system or providing an unfair advantage over honest businesses."What dodgy behaviour has the ATO discovered?
The ATO has noticed some businesses have been colluding with others to create fake invoices to justify "overly inflated" GST refunds.
They've come in the form of development and construction costs "that never occurred", or intangible services like management fees that "were never provided".
The tax office has even spotted multiple entities claiming GST credits for the same invoice, as well as invoices that were "completely fictitious".
"Often these schemes are dressed up and sold as clever schemes with a figleaf of technical analysis – but any scheme which generates GST refunds through paper shuffling is likely to be ineffective at best, and civilly and criminally actionable fraud at worst," O'Grady said.
"If it's too good to be true, it probably is."
The ATO is calling on businesses doing the right thing to let it know if they hear of any dodgy behaviour.
"GST revenue is vital to Australia's economy, funding essential services delivered by states and territories," O'Grady added.
"Those involved are abusing the system, tarnishing the reputation of the property and construction industry and making it harder for compliant businesses to operate."
If you suspect another business of being involved in these arrangements, you can confidentially report it to the ATO by making a tip-off online or by calling 1800 060 062.
What are the penalties for GST fraud, dishonest claims, falsifying invoices?
The tax office has warned if you're caught and convicted of any of these activities, you can face serious consequences. This can include:
Interest charges
Penalties
Fines
Prosecution
Referral to the Commonwealth Director of Public Prosecution
The ATO has urged people to come forward now and make a voluntary disclosure about their activities before getting a knock at the door from them.
The penalties could be reduced if you do this and cooperate with the tax office early.Sign in to access your portfolio
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