ATO Announces Motor Vehicles Data Matching Program

One of the largest claims made by business and by employees for that matter is the use of a vehicle for business or work related purposes.  Much of the claim relates to depreciation on the cost of the vehicle.  As technology continues to advance and with data sharing amongst authorities becoming more prevalent, the ATO together with each of the State motor vehicle registry departments have announced that they have developed a data matching program to assess the overall taxation compliance of individuals and businesses when buying or selling vehicles.

Details will be requested by the ATO from the States when a vehicle has been transferred or has been newly registered and where the purchase or transfer price exceeds $10,000.

This data is going to allow the ATO to do a range of compliance audits on taxpayers in relation to Fringe Benefits Tax, fuel scheme claims as well as legal ownership of vehicles impacting the entitlement to make a claim for a tax deduction or under declaring income if a vehicle is sold.  The ATO advised in their press release that they anticipate this will impact around 2 Million taxpayers per year that acquire or transfer vehicles.

The takeaway this week is to ensure that if you are purchasing, selling or having a vehicle transferred for business or work related purposes that you ensure the correct entity is the registered owner of the vehicle and that any cost base used for making a claim uses the true cost of the vehicle adjusted for the luxury car tax limit or that the selling price is accurately recorded with any GST correctly accounted for.