ATO issues practical tax governance tips for private groups

The ATO has issued advice on practical controls that Top 500 private groups can use to ensure they continue to meet their basic compliance obligations.

In a recent update, assistant commissioner Glenn Cooper outlined some of the consequences of groups failing to meet their basic compliance obligations and how they can be avoided through effective tax governance.

"Lodging or paying late can result in penalties, interest charges, and firmer actions. Repeated delays may also signal weaknesses in a group's tax governance," said Cooper.

"A practical control for Top 500 groups is a documented lodgment and payment calendar covering all tax obligations across the group, including income tax, BAS and FBT."

The ATO said a lodgment and payment calendar group can help a private group to provide clarity and visibility of all tax deadlines across entities and trigger internal accountability through documented responsibilities.

It can also support cas -flow planning with advanced sight of payment due dates and demonstrate that the group has robust governance controls, it added.

Glenn said that by embedding a lodgment and payment calendar into governance procedures, groups can reduce the risk of late lodgment and payment and avoid unnecessary penalties and interest.

"You'll also meet one of the requirements for effective tax governance that Top 500 groups need to achieve justified trust," he said.

The ATO said that the lodgment and payment calendar should also be reviewed and updated regularly to ensure it remains current.

In its latest report on its Top 500 tax performance program, the ATO found that groups had been investing more in tax governance frameworks and making improvements in tax governance.

However, the Tax Office said it was continuing to see some groups make errors such as omitting income, over-claiming deductions and other incorrect reporting.

The ATO noted that over three-quarters of the additional tax liabilities it raised in the 2024-25 financial year from Top 500 groups stemmed from the same basic errors it had previously seen and shared with groups in earlier iterations of the finding report.

"This highlights the critical role of effective tax governance in preventing avoidable costs by getting it right in the first place."