Tax

Tax Scams: What to watch out for

Scams are so much a part of Australian life that there’s an official site to help you identify and report scams. Even so, plenty of people still get caught out and end up losing money to scammers.

For instance, in early 2021, the ATO warned about a new scam that involves a robo-call impersonating the ATO with a pre-recorded message informing a target that their TFN has been suspended following suspected fraudulent activity. The victim is then persuaded to transfer money from their bank account to a fake ATO holding account to “protect” their funds.

(Yes, that’s a scam that is set up to protect you from a scam. Sneaky!)

And yes, people do fall for them! In early February 2021, one person lost $36,000 to the scammers.

Know how the ATO communicates. It can save you from tax-scams.

Know how the ATO communicates. It can save you from tax-scams.

Tips to keep you safe from tax-scams

The simplest way to stay safe is to understand the way the ATO communicates with taxpayers. It’s very different from the scammers.

The ATO does call taxpayers. But note that they will never:

  • send unsolicited pre-recorded phone messages

  • use aggressive or rude behaviour, or threaten you with immediate arrest, jail or deportation

  • suspend your Tax File Number

  • request direct transfers of money to a personal bank account

  • project their number onto your caller ID (ATO calls are always No Caller ID)

You may also receive genuine reminder texts from the ATO, for instance when a BAS is due. However, these don’t include links.

It’s also wise to make yourself aware of the types of scams, so you have more chance of spotting them. The best source is the ACCC Scamwatch Site.

What to do if you receive a suspected tax-scam call

Don’t hand over any money. Remember, the ATO will never request direct transfers of money to a personal bank account.

If you have a genuine concern about your status with the ATO, check with your accountant. We receive ATO correspondence and can access your ATO information. If needed, we can call them on your behalf.

Report the scam. You can do this via the ATO Website or the ATO App.

What if you’ve fallen victim to a scam

If you have handed over to a scammer sensitive personal identifying information, contact the ATO

If you have handed over financial details, contact you bank.

If you have paid money into a scammer’s bank account, contact that bank.


How to get a tax deduction for donations

Have you made any tax deductible donations this financial year?

The recent bushfires have shown how generous many Australians can be. Throughout this financial year you might have given money to a charity, especially during the bushfires. And even though many donations were made without thinking of the tax deduction, you might as well see if you can claim it.

If you haven’t made any donations but would like to do so, there’s still time to get the tax deduction in this financial year.

But there are some important things to watch out for.

Firstly, the organisation you donate to must be a 'deductible gift recipient' (DGR). They are the only ones that can receive tax deductible gifts. This means you can only claim a tax deduction for gifts or donations to organisations that have DGR status.

Not all charities are deductible gift recipients. And that includes some of the organisations who received donations during the bushfires and droughts! So check carefully who you actually donated the money to.

To claim a deduction you must have:

  • made the donation to a DGR;

  • a record of your donation, such as a receipt or bank statement;

  • made a donation of money or property; and

  • comply with any relevant gift conditions.

The gift must truly be a gift or donation, with no expection of receiving a benefit in return

Bucket donations: If you made donations of $2 or more to “bucket collections” you can claim a tax deduction for gifts up to $10 without a receipt. To claim more than that you need a receipt.

Is EOFY a good time to buy things for my business?

End of Financial Year can be a good time to buy things you need for your business. In today’s Tax Tip, Peter explains why one of his tips is “Buy stuff!”

Buy Stuff

Buy things you need for your business. Take a good look around and see what you need. What’s broken, busted, burst or battered? If you need new things, it could be a good idea to get new stuff before 30th June.

This is because you can take advantage of the Instant Asset Write Off. It lets you claim 100% tax deduction for assets purchased up to $150,000. The asset needs to be installed and ready for use by 30th June to be eligible.

But the tax break goes back down to $1,000 from 1st July. After 30th June, assets which cost more than $1,000 will be depreciated over their useful life again. This means the tax deduction gets spread over several years and the benefit is not as great.

Yes, I know the COVID downturn has had an impact on many businesses. Profitability might have taken a hit. But you should still take a look at your figures to see where you stand. They might show a tidy profit, in which case it could be a good time to renew that busted piece of equipment.

Of course, it’s not wise to spend money if you don’t need the equipment, or if you need the cash to support your business in the months ahead. Which is why it’s best to talk your plans through with your accountant first.

Let me know if you need a hand.