Your BAS refunds are under scrutiny after ATO extends notification period
Your BAS refunds are under scrutiny after ATO extends notification period
The Australian Taxation Office (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 under s 8AAZLGA(3)(a) of the Tax Administration Act 1953. If the Commissioner does not notify the taxpayer that the refund is being retained before the end of 30 days (previously 14 days), the refund must be released to the taxpayer.
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. It is important in all cases 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.
