With tax season coming close, tax payers are being targeted at with various schemes promising a lower tax. These schemes are a constant worry of the Australian Taxation Office as most of them come out as scams and innocent people get caught up in it.
A statement made by ATO talking about the aggressive tax planning and how it is planning to check on the various aggressive tax planning schemes that are floating in the market clearly shows how big a problem it is. ATO said, “These schemes are set up to deliberately exploit the taxation system, can often be illegal, and present a clear risk to your clients’ finances and businesses.
Anyone can fall prey to these schemes but these are often targeted upon wealthier people. Advisers such as tax agents, financial planners, investment advisers and lawyers are also common targets of these schemes as they are the ones advising on business investments and financial planning. As an advice to the financial planners working for clients, ATO said, “as a financial adviser, it is important to know what to look out for to help you best serve your clients, as well as protect your own reputation. Being able to identify these schemes early will help to discourage your clients getting caught up in them before any damage is done.”
Here are some common features of all the aggressive tax planning schemes one may find:
- There is lack of documentation need in this scheme
- The customer is not provided ample amount of support from the team providing the services
- These schemes often promise things that are too good to be true like zero risk features, loans with easy repayment, zero interest etc… including help in funding by the promoter himself.
- There are complex structures present in the scheme that are used to hide, improperly redirect income, expenses, or deductions.
One must be very careful on coming across such schemes and should not blindly select one. There are many schemes available on the ATO website as well that guide you exactly what can be done and what can land in you with penalty. It is always advised to seek a second opinion before investing in any scheme that promises tax avoidance.
If you have any doubts regarding a tax saving scheme contact ATO on 1800 060 062 or email at reportataxscheme@ato.gov.au
You can visit www.ato.gov.au /taxplanning for more information
