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In its crusade against what they call the cash economy’, the ATO has announced plans to collect the details of all individuals and businesses that have purchased or acquired a vehicle where the transfer and/or market value is $10,000 or greater in the 2011-12 and 2012-13 financial year. This involves computerised “motor vehicle data matching” that links valuable vehicles with the taxpayers (or tax evaders) who buy the cars.
The ATO plans to collect this data from state and territory motor vehicle registering bodies to match against taxpayer records and identify those who participate in the cash economy. That is, those people who do not declare all of their income or are deliberately avoiding their tax obligations.
The ATO uses motor vehicle data to:
- Identify those whose expenditure is in excess of their reported income
- Identify businesses who sell vehicles and either under-report or do not report those sales
- Develop strategies to improve taxpayer education and audit activities
And, to address potential non-compliance in:
- Income Tax
- Fringe Benefits Tax
- Luxury Car Tax
What happens to those who do not comply with their obligations?
Those taxpayers who are skimming some of their cash takings, running their business ‘off-the-books’, or in other ways are not declaring all of their income, can contact the ATO to make a voluntary disclosure.
Individuals or businesses which continue to do the wrong thing, even after being reminded about their obligations could be liable for default assessments of their tax liabilities.
If you are unsure of your tax obligations when it comes to selling or buying a motor vehicle, please don’t hesitate to contact us. Our qualified accountants will be more than happy to offer you advice to ensure you meet all of your obligations as an Australian taxpayer.