Did you know that the ATO, Family Assistance office and Centrelink and other government departments have all increased their data matching capabilities and activities?
These departments are using data matching to help keep people honest about their circumstances and to try to ensure that all Australians are on a level playing field.
Where does all the information come from
Your information gets sent via many avenues to the government and some of these include:
- Interest & Investment income comes from banks, investment bodies and other financial institutions that you deal with
- PAYG Payment summaries with your employment income details are sent directly to the ATO from your Employer
- If you are a Contractor in the Construction or Cleaning industry, businesses you do work for with submit details of payments made to you directly to the ATO via Taxable Payment Annual Reports (TPARs)
- When you buy, sell or transfer vehicles your state and territory motor vehicle registry will share this information with other government departments
- If you buy or sell a property, the details of these transactions are shared by State and territory title offices and revenue agencies.
- Any payments you receive from a government body, including pensions, benefits, rebates, taxable grants, and other payments will be used in data matching.
- Foreign source income is monitored by Australian Transaction Reports and Analysis Centre (AUSTRAC) and our international treaty partners to ensure all required foreign income is reported
- Stock exchanges and share registries provide details regarding share transactions and dividends or other income received.
- Your health insurers share details of your health insurance cover and premiums paid.
What happens with this information
A variety of things can be done with this information by the government depending on the information provided and where it was sent to.
As most Australians now know the ATO will take a lot of this information to in effect “prefill” your tax return to try to make sure you pay the right amount of tax. This will include your employment income, interest income, dividends, etc. Further to this as the ATO will now know when you have sold a property that will perform data matching to enquire if you should be paying capital gains tax.
The ATO can also use data matching to check that you are paying appropriate Fringe Benefits Tax if you are buying vehicles in your business.
The Family Assistance Office and Centrelink will use data that they receive to cross check people receiving government benefits or subsidies to ensure they aren’t over or under paid. These payments include family tax benefit and the aged pension.
State and Territory Offices will use data they receive in regard to land transactions to ensure that you are paying appropriate levels of land tax.
What does this mean
As data capturing and sharing becomes more predominant in Australia it is important to ensure that you are always providing correct and complete information upfront when dealing with any government department. There is nothing worse than being penalised or having to pay back funds if it is discovered you provided inaccurate details.
It is also important that you keep your own records of all information. It is possible for some of the data that is shared between organisations to be wrong and keeping your own records will assist if you ever need to dispute any of this “prefilled” information.
If you have any questions or would like more information on this, any organisation you deal with should be able to provide you further details, or as always Aptus is here to help.
Author: Rebecca Milhalic