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  • Writer's pictureUHY Haines Norton

Filling the Tax Gap

By Tina Zawila


Unless you are an Accountant, Auditor or Tax Agent, you may have missed the Australian National Audit Office (ANAO) Report to Parliament this week titled “Identifying and Reducing the Tax Gap for Individuals Not in Business”. And while you might think this isn’t of any interest to you, if you are an Australian Taxpayer who is not in business it is all about you and it might pay to at least be aware it exists!

The reason the audit was commissioned is that the “individuals not in business tax gap is the second largest gap in dollar terms calculated by the ATO”. Estimates indicate that the gap is worth $9.03 billion, so you can understand why the Government and the ATO is interested. There are also 11.5 million taxpayers in this group.


The report found that work-related expenses, hidden wages and incorrect rental claims were the main reasons for the gap. Whilst work-related expense claims are the biggest

contributor to the tax gap, it is estimated that 90% of rental claims were incorrect, and that this represents 14% or $1.3billion of the 2019-20 tax gap for individuals not in business.

Therefore, it’s no surprise that the ATO is embarking on a data matching program to identify incorrect rental claims.


Banks and other lenders will now be required to collect information on 1.7million residential property loans that can be used by the ATO to compare taxpayer claims and income tax returns. The data matching program would be able to collect:

  • Client identification details - names, addresses, phone numbers, dates of birth.

  • Loan account details - account numbers, BSBs, balances, total interest charges, total repayments, and commencement and end dates.

  • Transaction details - transaction dates, transaction amounts, and whether the transaction was a debit or credit on the account.

  • Property details - addresses of the loan asset.

The report also noted that the “ATO is largely effective at identifying and measuring the tax gap for individuals not in business”. In other words, the ATO has the resources and technology to identify taxpayers who may not be complying with their tax obligations.


The message for you is clear, make sure you lodge accurate income tax returns because the ATO has an arsenal of information to ensure your return is correct. Seek professional advice to make sure you are correctly declaring income and claiming all deductions that you may be entitled to.


For help and advice with your income tax return call our professional team at UHY Haines Norton on 4972 1300.

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