ATO CHANGES FOR THE PROFESSIONAL SECTOR

Tax laws change all the time, and it’s our role as your accountants and advisors to keep you alert to important changes that affect you.

Horizon Accounting Solutions want to let business owners and occupational professionals know about this now, so you can clarify your risk profile and where relevant plan for the extra tax payments that you may need to make.

Recently the ATO has released new guidance that totally changes the way professional firms can allocate (or split) their profits among a family group.
The ATO is targeting firms within the following professions: doctors, dentists, medical specialists, lawyers, architects, engineers, financial advisors, and consultants.

If you fall into these categories, it is recommended you urgently discuss how this will affect you in this 2023 tax year and in future years.

The results of this ATO ruling impact:

·       Your options to allocate your professional firm profits across your family members and entities will be reduced; and

·       Your family group’s overall tax payable which may increase.

There are different levels of risk associated with different tax planning strategies that involve allocation of profits of a professional firm. The ATO has classified these risks as green zone, amber zone and red zone. The ATO intends to investigate amber zone and red zone risks and will not investigate green zone risks. 

We can help you to understand how these ATO tax law changes affect your forecasted tax payable for 2023 and future year so you can carefully plan for it.

By enlisting the assistance of Horizon Accounting Solutions, you can get peace of mind that the way you allocate your professional firm profits will satisfy the ATO and not draw audit attention to yourself.

If you wish to know more please reach out via the “Contact” page of our website, or call 02 4372 8020.