Thursday 26 May 2022
*

Latest Accounting News
Hot Issues
Be alert for phoenix activity, businesses told
Equifax signs data agreement with ATO
E-invoicing will reduce emissions, says PwC
State and Federal Disaster support --- May 2022
Largest cities in the world 1500 to 2100
Last chance to claim the loss carry-back
Changes to recovery loan scheme for small and medium enterprises
About the cash flow forecasting template
Federal budget 2022: Winners and Losers
ATO puts 50,000 directors on notice.
FBT Reminder – Odometer Reading
Data matching program: government payments
Budget: Big wins for SMEs
Small businesses show sign of omicron rebound
Federal Budget 2022 - Overview
Federal Budget 2022 and YOU - Part 1
Federal Budget 2022 and YOU - Part 2
Budget at a Glance - Video
Undisclosed income risks hefty asset betterment assessments
Superannuation Guarantee (SG) increases
How stress and burnout are different, and why the difference is important
Accountants ‘have important role to play’ in digital transformation
ATO launches campaign to target tax withholding on overseas royalties
ATO releases new draft guidance products impacting private trusts
GDP by country since 1800
Articles archive
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 2 April - June 2006
Quarter 4 October - December 2005
Quarter 3 July - September 2005
Quarter 2 April - June 2005
Quarter 2 April - June 2004
Quarter 1 January - March 2004
Quarter 4 October - December 2003
Quarter 3 July - September 2003
Quarter 4 October - December 2001
Undisclosed income risks hefty asset betterment assessments

The Federal Court are satisfied with asset betterment principles – a controversial approach the Australian Taxation Office (ATO) takes to determine undisclosed income.



 


The ATO uses this principle to determine undisclosed income. It is most commonly applied


when dealing with businesses that operate in the cash economy – cafes, bars, laundromats,


etc. The net increase in a taxpayer’s financial position each year is tallied up and compared


with their tax return. Significant discrepancies probably arise from undisclosed income and


are investigated further.


 


When no supportable explanations exist, an assessment for the undisclosed amount is issued


– often with penalties and interest. And, it is a huge tax thereafter to have that reversed or


even scaled back. A huge task means a very costly task!


 


An asset betterment calculation is not a concept embodied in the tax law or any rulings.


Despite having no legal basis, the practice has stood up to scrutiny in the courts, even if the


asset betterment calculation is clearly wrong.


 


Where there are scant records, cash businesses and inconsistent information, an asset


betterment calculation may be the closest approximation of taxable income, notwithstanding


those items in the statement cannot necessarily be forensically linked to real transactions.




25th-March-2022
        
89 Boronia Road Boronia Vic 3155 Phone: (03) 9762 5400 Fax: (03) 9761 1327