Improvements to GST Risk Assessment

Are you a business that has had a GST refund held up as a part of the ATO’s risk assessment program to verify GST refunds? The Inspector-General of Taxation (IGT) has recently completed and released his review into ATO’s practice and the findings are surprisingly good for the ATO. Even so, as a part of the review, the IGT made several recommendations to improve the process which the ATO has mostly agreed to.

The Inspector-General of Taxation (IGT) has recently released his review into the verification of GST refunds by the ATO. The review was initially conducted as a response to concerns raised by taxpayers which had their GST refunds delayed as a part of the ATO risk assessment program to verify certain details before refunds are issued.

Broadly, the ATO’s risk assessment system uses BASs as input data and automatically selects a number of cases where retention of refund and further checking should be considered. The selection is then further refined by manual intervention. The review conducted by the IGT examined the end-to-end process involved in refund verification including from initial case selection through to the review and audit activities.

Overall, the IGT found that the ATO’s administration of GST refunds operated efficiency with the vast majority of refunds released without being stopped for verification, while those refunds that were stopped were processed and released within 14 or 28 days.

Even though that was the case, the IGT identified an opportunity to enhance ATO’s automated risk assessment tools which have only been achieving a strike rate of 26.7% (approximately 1 in 4 cases), which may be no better than random selection.

In addition to the opportunities to improvement, the IGT also made 5 recommendations aimed at the ATO to:

  1. develop a framework for continuous improvement of its automated risk assessment tools;
  2. streamline guidance to staff and implementing tools to assist them in complying with their statutory obligations;
  3. enhance its information requests to taxpayers and providing a channel for pre-emptive provision of such information;
  4. improve notification of when taxpayers’ objection rights to the retention of refunds has been triggered and assisting them to lodge such objections effectively; and
  5. raise awareness of staff and taxpayers about financial hardship issues, appropriately considering them and enabling automated partial release of refunds.

The ATO has agreed to the majority of the recommendations. Although it notes that activity statements are processed through a system which does not allow for automatic alerts to notify ATO officers whether retention of a refund has been made within the statutory period. However, the ATO said it is looking to migrate activity statement processing to another internal system which may provide opportunities for alerts.

In addition, the ATO partially disagreed with recommendation 3 as it says taxpayers and Tax Agents who lodge electronically already have the option to supply supporting information through various portals and allowing taxpayers to send additional information may cause additional compliance costs, particularly where the refund is not subject to verification activities.

Perhaps the most interesting recommendation that the ATO partially disagreed with is 5. According to the ATO, system limitations prevent the automated partial release of refunds in certain situations. It notes that the manual process which is currently in place is considered to be adequate.

So what does it mean for your business?

The review has raised several issues which may mean improvements in service for business owners seeking refunds going forward. With the enhancement of the ATO’s risk assessment model, businesses may no longer need to be inconvenienced by an unnecessary delay in obtaining their GST refund. If you’re having issues with your activity statements or a GST issue in general, contact us today.

We Minimise Your Tax To Maximise Your Profit

Contact Rubiix and ask about our various business accounting services that will maximise your business profit!

Recent Blog Posts

Rubiix Breakdown: 2024 Federal Budget

by | Jun 6, 2024 | News | 0 Comments

If you missed it, the 2024 Federal Budget was announced on Tuesday 14 May 2024, with a heavy focus on cost-of-living including assisting States and Territories to build...

A cheerful barista handing a paper bag filled with baked goods to a customer in a cozy bakery, illustrating customer engagement strategies to increase foot traffic and customer satisfaction.

How to increase your customers

by | May 29, 2024 | News | 0 Comments

Blog Home How To Increase Your Customers Increase Your Customers: 2 Key Strategies for Business Growth Growing your business not only boosts your current cash flow but...

Launching New Products, Services or Business Ideas Into the Australian Markets

by | Apr 29, 2024 | News | 0 Comments

Blog Home Launching New Products, Services or Business Ideas Into the Australian Markets Navigating the growth of your business in Australia can indeed be a challenging...

Tax saving strategies

Top Tips For Tax Planning & Reduction

by | Apr 10, 2024 | News | 0 Comments

Blog Home Top Tips for Tax Planning & Reduction: Profits, Superannuation & Trusts Imagine what you could do with your tax saved.You could:Reduce your home loan.Top up...

Driving Profit Growth: A Holistic Approach for Business Success

by | Mar 12, 2024 | News | 0 Comments

Blog Home Driving Profit Growth: A Holistic Approach for Business Success Welcome to the journey of enhancing your business’s bottom line. Whether you're steering a...

Bitcoin tokens overlaid with fluctuating stock market graphs, symbolising the dynamics of Cryptocurrency and Tax return calculations.

Cryptocurrency and Your Tax Return

by | Jan 24, 2024 | News | 0 Comments

Blog Home Cryptocurrency and Your Tax Return In the evolving digital financial landscape, cryptocurrencies are more than just a trading asset; they're a new frontier in...

Exclusive New Client Offer

Contact our team today to get a FREE 30-minute meeting with one of our expert business accountants, including an ADDITIONAL free Financial Safety Checklist to help you on your journey to financial freedom.