Your BAS refunds are under scrutiny after ATO extends notification period
The ATO will have additional time to notify a taxpayer if it intends to retain a business activity statement refund for further investigation.
The ATO is now allowed additional time to notify taxpayers when their business activity statement (BAS) refunds are withheld for verification of information.
From 1 April 2025, the notification period for the Commissioner has extended from 14 days to 30 days, allowing more time for ATO to assess high risk BASs and to align with the notification period for refunds arising from income tax returns.
The Commissioner may retain a refund if it would be reasonable to require verification of information relating to the refund amount.
Factors determining retention of refunds
The factors the Commissioner considers in deciding whether to retain a refund are:
the likely accuracy of the information — for example, unusually high or low claim amounts
the likelihood that the information was affected by fraud, evasion or intentional disregard of a taxation law
the impact of retaining the amount on the entity’s financial position — for example, solvency needs
the complexity that would be involved in verifying the information, and
whether the information provided by the taxpayer is consistent with information previously provided.
Risk mitigation steps
If you are lodging a BAS with a large refund, note that the refund may be delayed as the ATO may scrutinise that BAS and identify it as high risk.
The ATO will have more time to identify high risk BAS lodgments before releasing refunds to taxpayers. Therefore, it is important to have the necessary records on file to justify the information in the BAS.
Any legitimate refunds retained for over 14 days would result in the ATO paying interest to you (as is currently the case).
If you have any queries in relation to this measure, please feel free to contact our office.
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