The Australian Taxation Office (ATO) has released its 2025 compliance focus areas, and businesses in the property and construction industry are firmly in the spotlight. With ongoing concerns around tax compliance, reporting accuracy, and worker engagement, accountants and business owners alike should take note of the key risks identified.
Why Property & Construction Is on the Radar
The ATO continues to see heightened compliance risks in this sector due to:
# 1 High volumes of cash transactions – increasing the risk of underreporting income.
# 2 Complex business structures – which can obscure true profit reporting.
# 3 Labour hire and contractor arrangements – often leading to incorrect classification of workers or sham contracting concerns.
With significant infrastructure spending and housing activity driving the industry, the ATO wants to ensure businesses are meeting their obligations correctly and consistently.
Key Risks the ATO Is Targeting in 2025
The ATO has highlighted several areas where it will be increasing scrutiny:
1. Tax Reporting Accuracy
– Mismatches between reported income and lifestyle indicators (e.g., assets held by directors).
– Use of benchmarks to spot underreporting compared with industry averages.
2. GST & BAS Reporting
– Overclaiming of GST credits.
– Late or incorrect reporting of BAS obligations.
3. Payroll & Worker Classification
– Ensuring correct PAYG withholding and superannuation obligations are met.
– Risks of sham contracting where employees are incorrectly engaged as contractors.
4. Record Keeping & Substantiation
– Gaps in bookkeeping, particularly where large cash payments are used.
– Incomplete or inaccurate records to support claims.
What This Means for Your Business
For businesses, it’s about getting ahead of potential risks before the ATO does.
Practical steps to take now include:
# 1 Reviewing payroll, contractor agreements, and award compliance.
# 2 Ensuring GST and BAS reporting is accurate and on time.
# 3 Strengthening bookkeeping and record-keeping processes.
# 4 Benchmarking financial performance against ATO industry standards.
How We Can Help
Navigating tax compliance in the property and construction sector can be challenging. Our team can:
– Conduct compliance health checks.
– Support accurate tax and BAS lodgements.
– Provide proactive advice to reduce audit risks.
With the ATO’s sharper focus in 2025, now is the time to ensure your business is protected and compliant. More information can be found on the ATO website.
Need Help Navigating these ATO Rules?
Our team specialise in helping individuals, families and business owners make sense of their tax obligations. Whether you’re working from home, investing in property, or managing complex deductions, our experienced team is here to guide you through every step of the process.
Contact us today to book your tax consultation.
The team at EMspire Advisory are trusted, qualified Chartered Accountants, tax agents, and small business accountants. We work closely with our clients to achieve the best possible outcomes. To find out more, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.