The ATO’s reinforced focus
In a recent speech, the Commissioner, Rob Heferen, provided his high level observations from his first six months in the role. Particularly relevant from an employer obligations perspective, the Commissioner noted that the ATO’s collectable debt is now the “largest it has ever been”, predominantly comprising PAYG (that has either been not remitted or incorrectly remitted), and “even more worryingly”, employee superannuation entitlements.
These comments come on the back of the ATO’s FY25 Corporate Plan noting that an “increased focus on business debt including SG, PAYG and goods and services tax” is a key focus area for the year. The Plan noted the ATO’s investment in “enhanced data and improved analytics capability” as a key investigative lever. In his aforementioned speech, the Commissioner fortified this, providing that the ATO will be “firmer and faster” in addressing collectable debt “using data and industry insights to improve detection and prevention strategies”.
Concurrently, the ATO released two notifications via its website, one addressed to businesses and the other to tax professionals, flagging a compliance drive where employers showing “early or ongoing signs of non-compliance” with PAYG, SG and/or FBT obligations may be contacted. The notifications also provide that if there has been unresponsiveness or ongoing patterns, the ATO may progress to “a review or audit to assess their situation”.
Separately, the ATO published common SG errors that it has identified, underlining again the data-led focus that allows the regulator to flag issues. The three common errors noted by the ATO are:
- Rejected superannuation payments: Employers are not addressing rejected contributions on a timely basis, where often rejections are due to erroneous employee details (e.g. an incorrect Tax File Number). This data mismatch becomes visible to the ATO by comparing employer STP reporting to super fund reporting. The regulator flagged the necessity for employers to build stronger governance in relation to rejected contributions, including potential utility of the “default super fund” to mitigate non-compliance risk.
- Incorrect SG calculations: Errors in relation to SG calculations, either in relation to determining what constitutes ordinary time earnings, or in applying the incorrect rate (currently 11.5%). Such miscalculations have become clearer in particular as a result of STP - phase 2 reporting.
- Late payments: Timely payment to a clearing house is not necessarily timely payment of SG - dependent on a clearing house’s arrangements with an employer, payment to a clearing house may not allow sufficient time for the funds to be received into employees’ accounts by the payment deadline. Again, this has become more visible to the ATO through data mining between employer versus fund reporting.
