The ATO is Turning the Spotlight on Trades & Professional Services — and What It Means for You
Services — and What It Means for You
If you operate in the trades, construction or professional services sector, now is the time for a compliance check. The ATO has flagged these industries for increased scrutiny — meaning more audits, amendments and interest/penalties if things don’t add up. holmans.com.au
1. Which industries are in the spotlight?
The ATO has identified two key sectors as recurring sources of compliance risk:
Construction and trades (e.g., builders, carpenters, electricians)
Professional services (engineers, consultants, accountants) holmans.com.au
These businesses often face similar issues around record-keeping, income omissions and incorrect expense claims.
2. The most common tax red flags
Here are the frequent trouble-spots:
Under-reporting income: Jobs, invoices or deposits sometimes don’t make it into BAS or tax returns. holmans.com.au
Over-claiming expenses: Claiming personal or private costs as business deductions. holmans.com.au
GST mistakes: Not registering for GST when required, or over-claiming GST credits. holmans.com.au
R&D Tax Incentive (R&DTI) errors: Ineligible activities or insufficient documentation for R&D claims. holmans.com.au
3. What the ATO expects from you
To stay ahead of this increased scrutiny:
Report all business income — don’t leave invoices, projects or deposits off your BAS and tax return. holmans.com.au
Claim only genuine business deductions. Keep business and personal expenses clearly separate, and maintain documentation. holmans.com.au
Maintain full and accurate records — especially if making R&D claims. holmans.com.au
Register for GST when you hit the turnover threshold ($75,000) or earlier if required. holmans.com.au
4. As your business grows, your obligations grow
If you’re moving from a smaller turnover into the $1 million-to-$10 million range, things get more complex. Tax, superannuation, reporting and compliance all require extra care. holmans.com.au
5. What to do now
Review your current reporting and records: Make sure everything is up-to-date and supported.
Check your expense and deduction claims: Are they business related and documented?
Confirm your GST registration status: Are you required to be registered, and have you claimed correctly?
Seek professional help early: If you're unsure, it’s wise to talk to a registered tax agent or business adviser rather than waiting until an audit or amendment is forced. holmans.com.au
6. Why this matters
When the ATO is paying closer attention, the risk of amendments, interest and audits rises. A strong documentation trail and clear separation of business vs personal expenditure become your best defence. holmans.com.au
Final word
If you work in trades, construction or professional services — now is the time to get your tax and compliance affairs in order. Don’t wait until the ATO comes knocking. Review your income, expense claims, GST status and record-keeping now to avoid a nasty surprise later.