ATO blitz on low doc loans
The tax office will begin a blitz on low documentation loans after a preliminary audit showed 70 per cent of borrowers may have failed to declare full incomes. In some cases, small businesses' annual incomes as stated to the ATO were lower than the repayments on the loans. The ATO looked at 176 low doc loans, typically used by the self-employed and people who can't meet normal bank lending criteria. But the ATO is concerned that some people are using them to hide their true levels of income. If the initial findings are confirmed, borrowers could face ATO penalties of up to 75 per cent of the unpaid tax as well as interest.