Another day, another scam …
The ATO is warning us to be alert for potentially dodgy tax schemes which are spreading online, including through social media.
Acting Deputy Commissioner, Sarah Taylor, is urging individuals to be wary of online promotion of tax schemes promising to significantly reduce or avoid tax altogether.
Stay alert
Sometimes tax schemes can be peddled as investment schemes. The ATO doesn’t want to see honest people lured into unlawful tax schemes with false promises of high returns and tax savings. If an offer seems too good to be true, it probably is.
Promoters of these schemes are often opportunistic and target vulnerable people. Protect yourself and your money by getting advice from a registered tax practitioner before committing to anything.
The latest scam spider webs
The ATO’s website lists a number of tax schemes to look out for. In one particular recent scheme, individuals are being advised to invest in a start-up company that allegedly qualifies as an early-stage innovation company (ESIC). By investing in an ESIC, they’re told they can then claim the early-stage investor tax offset on shares purchased through the financing arrangement.
The ATO is concerned individuals may be entering into these arrangements under the belief they are entitled to the tax benefits claimed using the financing arrangements. The ATO is also concerned that the companies may not qualify as ESICs.
Another type of tax scheme being promoted promises individuals they can avoid paying tax by setting up a purported non-profit foundation and diverting their income to it.
These schemes are not effective and the individuals will still have to pay the tax on the income.
If you are approached with tax arrangements that sound like either of these examples, or sound too good to be true, seek advice from a registered tax practitioner and report it to the ATO.
Catching the scam spiders
Scams and financial schemes are rife these days with the number of official complaints to The Australian Financial Complaints Authority. being at record highs.
But we don’t even need to read the stats to know this. Just have a conversation with anyone you know about financial scams and they will either have a story of how they were taken for a ride, or know someone who was. It’s an epidemic.
The best thing we can do is be community-minded and report scams as we come across them. You can report a scam at the ATO and also visit ScamWatch to get information about scams (not just tax scams).
And remember, if a call, SMS or email ever leaves you wondering if it is genuine, don’t reply. Instead, you should phone the ATO’s dedicated scam line 1800 008 540 to check if it is legitimate.
The more we are all vigilant with this, the better. We need to protect each other from the scam spiders and take down their webs!
