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SME risk differentiation framework paper


In August 2012, the ATO released its latest Compliance Program for small to medium enterprises and wealthy individuals, showing an important change in its approach to this part of the economy. The ATO has been applying its Risk Differentiation Framework to large business for some years, classifying taxpayers’ risk and determining the level of review or audit activity as a result.This Framework is now being applied to SMEs and wealthy individuals for the first time, and is likely to significantly change how and why a taxpayer is selected for review.

This paper involves Scott Bryant, a tax partner at PwC with many years of experience in dealing with the ATO, and Michael Cranston, the Deputy Commissioner Small and Medium Enterprises. Scott and Michael take you through the practical implications of the new ATO approach, how your clients may attract ATO attention, how the ATO classifies taxpayers, and what the consequences of different risk classifications can be.

Author profiles

Michael Cranston
Michael joined the ATO in 1977. He moved to his current role as Deputy Commissioner Private Groups and High Wealth Individuals in October 2011. His responsibilities include supporting increased willing participation and ensuring voluntary compliance of taxpayers in the privately owned groups and high wealth individuals population, focusing on serious abuses of the tax system (including through the Serious Financial Crime Taskforce) along with addressing aggressive tax planning. Michael is also the client experience owner for privately owned wealthy groups for the ATO. He has represented the ATO on a number of Australian and international forums including chairing the OECD Taskforce on Tax Crimes. - Current at 28 June 2016
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Scott Bryant CTA
Photo of author, Scott BRYANT Scott is the Tax Leader and former Managing Partner of PwC Adelaide, and specialises in corporate and international taxation, including FBT. With over 25 years of experience Scott has a keen understanding of taxation consulting and compliance relating to corporate and international taxes, capital structures, mergers, acquisitions and floats/sales as well as corporate restructures and managing ATO audits for his clients. Scott is a CTA and with Tertiary qualifications in Law, Economics and Accounting is well regarded as a regular presenter on Tax and associated Economic and Societal issues. - Current at 24 April 2015
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This was presented at 46th South Australian Convention .

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SME risk differentiation framework

Author(s):  Scott BRYANT,  Michael CRANSTON

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