The ATO has had a couple of programs running over the past few years targeting Australia’s wealthiest private groups. They kicked off with the Top 500 program and are now well into the Next 5000 Program – which targets private groups with wealth of more than $50 million.
You may be asking what this has to do with me? Whilst the focus of these programs is high wealth groups, they also set the expectations that the ATO now applies across all businesses – including small and medium enterprises.
If you run a family business, trade through multiple entities, use trusts, or are planning a sale or restructure, the themes coming out of these programs are a useful playbook. They show what the ATO regards as “high risk”, what it will ask for in an engagement, and where you can remove risk before a review starts.
The ATO’s emerging focus areas, and how they affect you
- STRONGER TAX GOVERNANCE IS EXPECTED
- What the ATO wants: documented tax governance procedures, clear decision‑making records, up‑to‑date trust resolutions, and timely lodgements and payments.
- EVERYDAY COMPLIANCE MISTAKES ARE RED FLAGS
- Common mistakes: undocumented shareholder/related‑party loans, missed Division 7A repayments, GST errors, missed FBT, wrong CGT treatment and trust distribution/UPE issues. These are easy for the ATO to spot and expensive to fix. Fix the basics first — correct paperwork beats firefighting later.
- MAJOR TRANSACTIONS TRIGGER SCRUTINY
- Transactions watched closely: business sales, restructures, refinancing, property purchases/transfers and internal restructures. Expect questions on valuations, tax treatment, CGT reporting and GST classification when you transact.
- GST REVIEWS ARE BECOMING ROUTINE
- What the ATO looks at: GST‑free vs input‑taxed supplies, related‑party recharges, export treatments, construction/property transactions and input tax credit substantiation. The ATO’s 12‑month detailed GST approach used in larger reviews is filtering down — accurate GST treatment and strong supporting records are essential.
- PROPERTY AND CONSTRUCTION REMAIN A HOTSPOT
- Key concerns: property development within groups, SMSF participation in projects, trading stock vs capital asset classification and profit allocation across entities. If you’re in property or construction, the ATO expects commercial terms, arm’s‑length pricing and defensible documentation.
What ATO compliance measures mean for your business
If your SME:
- uses a trust
- pays directors/shareholders instead of wages
- owns property
- has related‑party loans
- has cross‑border dealings
- is planning a restructure, sale, or refinance.
…these ATO focus areas apply directly. Strong governance and documentation now will put you in a better position if the ATO reviews your affairs.
Employer obligations
In addition to the above points, Superannuation will be a major focus in 2026/27. With the introduction of Payday Super from 1 July 2026, the ATO will be focused on ensuring employers are paying their SGC each payday rather than quarterly. The Single Touch Payroll (STP) gives the ATO visibility over business payrolls and makes it easier for them to track late or unpaid super and PAYG withholding.
Key compliance areas – individuals
The key compliance areas for individual taxpayers and wage earners focuses heavily on record-keeping, work-related expenses, and rental property deductions. With automated data-matching, the ATO identifies discrepancies in individual and business tax returns almost immediately.
- Work-Related Expenses: Cracking down on unsubstantiated or inflated deductions (e.g., car, clothing, and home office claims).
- Rental Properties: Scrutinizing excessive deductions, interest claims, and private use of holiday homes.
- Omitted Income: Data-matching with banks, share registries, and digital platforms to ensure all side-hustle, cryptocurrency, and share income is reported
How Activ8 can help
We focus on practical, commercial solutions, not unnecessary complexity. We help SMEs with:
- Tax governance frameworks for SMEs
- Division 7A, trusts & UPE compliance
- ATO review readiness & audit support
- GST & FBT risk reviews
- Support for major transactions
- Ongoing advisory & strategic planning.
Ready to strengthen your tax position? If you want peace of mind, are planning a transaction, or need help preparing for ATO engagement, we can help you reduce risk and build a stronger tax governance foundation.