Last week, the Australian Taxation Office (ATO) issued a revised version of PS LA 2021/1, which sets out its administrative approach to promoter penalties. The update reflects the changes made in May by the passage of the Accountability and Fairness Act 2024.

These changes include:

• Increasing the maximum penalties for advisers and firms that promote unlawful tax schemes from $7.8 million to $780 million.
• Increasing the time limit for the ATO to bring Federal Court proceedings on promoter penalties from four years to six years after the conduct occurred.
• Expanding the scope of schemes to which the laws apply.
• And changing the definition of when an entity is a “promoter” of a “tax exploitation scheme”.

The regulator continued that if you are offered an unlawful tax scheme, you should reject it and report it to the ATO confidentially by either completing the tip-off form on its website or in the ATO app “contact us” section, or by phoning the tip-off hotline on 1800 060 062.

If someone suspects they have already entered into an unlawful tax scheme, the ATO stated it is important to contact its office to correct their position and mitigate their exposure to interest and penalties.