ATO warns dodgy tradies, stop faking GST claims or pay the price

The taxman’s had enough – and he’s not pulling any punches. The Australian Taxation Office (ATO) has issued a fresh warning to businesses trying to pull a fast one on their GST.

The ATO  is investigating dodgy behaviour in the property and construction industries, with a few high-flying private companies also on their radar.

According to Assistant Commissioner Adam O’Grady, the fraud the ATO is chasing involves real businesses lodging dishonest claims for GST refunds using fake or inflated invoices.

“Despite warnings from the Serious Financial Crime Taskforce late last year, recent observations show dishonest claims involving false invoicing are growing,” O’Grady said.

This isn’t the old social media GST scam where fake businesses were set up to claim dodgy refunds. This time, it’s legitimate businesses doing the wrong thing, and the ATO says the stakes are high.

“While the numbers of businesses involved are relatively small, some are attempting to claim tens of millions of dollars in GST refunds they’re not entitled to,” O’Grady said.

How does the scam work?

The ATO’s latest Taxpayer Alert lays it all out in black and white. Some businesses are trying to game the system by claiming GST credits for construction work that was never actually done, or charging phantom “management fees” for services that don’t exist.

Others are trying to claim GST on property deals that haven’t even gone through yet. In some cases, multiple businesses are lodging claims for the same invoice. At the extreme end, there are operators just flat-out creating fake invoices from scratch.

In many cases, one business is working with a related entity to make it look legit, but the ATO isn’t buying it.

“Often these schemes are dressed up and sold as clever schemes with a fig leaf of technical analysis – but any scheme which generates GST refunds through paper shuffling is likely to be ineffective at best, and civilly and criminally actionable fraud at worst,” O’Grady warned. “If it’s too good to be true, it probably is.”

Honest businesses are paying the price

Most small businesses do the right thing, and they’re the ones who cop the fallout when others bend the rules.

“What these others are doing is simply not fair,” O’Grady said. “We’re dealing with dishonest and deliberate attempts to cheat the tax system.”

The ATO says it won’t hesitate to hand down the consequences: think interest charges, hefty penalties, fines, and in serious cases, even prosecution.

If you’re thinking of dabbling in a scheme like this, take this as your warning shot. If you’re already involved, the ATO strongly suggests coming clean now.

“Early cooperation and making a voluntary disclosure may reduce the penalties imposed,” O’Grady said.

And if you’ve seen something that doesn’t smell right, speak up. You can make a confidential tip-off online or by calling 1800 060 062.

The ATO says coming forward is about protecting the system that keeps the country running.

“GST revenue is vital to Australia’s economy, funding essential services delivered by states and territories. Those involved are abusing the system, tarnishing the reputation of the property and construction industry and making it harder for compliant businesses to operate,” O’Grady concludes.

Want more? Get our newsletter delivered straight to your inbox!  Follow Business Builders on Facebook , X , Instagram , and LinkedIn.