New guidelines for professional services firms - lawyers, architects, medical practitioners etc., came into effect on 1 July 2022.
The
guidance takes a strong stance on structures designed to divert income in a way that results in principal practitioners receiving relatively
small amounts of income personally for their work and reducing their taxable income.
The ATO is now contacting professionals who they believe might be at risk. Any structural changes that need to be made to reduce risk, should be completed by the end of the 2022-23 financial year.
Where the ATO deems that income has been diverted inappropriately to create a tax benefit, they will remove that benefit and significant
penalties may apply.
There’s a quiet shift happening within the ATO, and it’s catching a lot of businesses off guard. The ATO is using its newly enhanced Risk Engine, now powered by artificial intelligence, to comb through business financials with greater speed, accuracy, and scrutiny than ever before.
Shannon Smit, Founding Director of Smart Private Wealth, has been awarded the prestigious Excellence in Innovation award at the 2025 Count Financial Awards, recognising her ground-breaking leadership in transforming how financial advice and professional services are delivered in Australia.
