Just thought i would publish this as it is a going concern among borrowers.
http://www.ato.gov.au/corporate/content.asp?doc=/content/mr2004042.htm
What are your thoughts?
Joshua McEwen
Finance Broker – WAhttp://www.prestigeloans.com.au
Brokers Lic 1297
Licensee Brett ChristieLooks like they have only looked at 176 loans, Not many in the scheme of things, but this figure will obviously increase.
Also seems the ATO is especially looking for people who have not lodged returns at all.
It looks like No Doc loans are going to get much more popular in the next few years.
Terryw
Discover Home Loans
Parramatta
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Definitly. No docs will become ever more demanding pressuring lenders to become abit flexible.
I have printed off a couple of copies on hand to give to clients who are thinking of fraudulanting figures, i never recommend it or just go no doc!
I always thought tne ATO would caught on soon.
Joshua McEwen
Finance Broker – WAhttp://www.prestigeloans.com.au
Brokers Lic 1297
Licensee Brett ChristieHow does No-doc help? Sure the ATO can’t match income tax returns to stated income (for loan app), but they can still work out whether the declared income is sufficient to service the loan.
With No-Doc Products, a statement of position isnt required or in other words, no income, asset, liabilities needs to be declared, they sign a declaration stating the fact that it wont bring upon financial hardship if they go for a No-doc Loan. However, no doc loans needs a fair bit of a deposit..normally 30%.
Joshua McEwen
Finance Broker – WAhttp://www.prestigeloans.com.au
Brokers Lic 1297
Licensee Brett ChristieFurther Update:
Bringing lodgments up to date
Our work to ensure people are meeting their lodgment obligations and bringing their outstanding returns up to date will continue.For example, we are still working to ensure people who apply for low documentation (‘low doc’) loans are meeting their tax obligations. We have also examined a number of loan brokers who arrange the loans.
So far we have checked approximately 133,000 low doc loan records against lodged tax returns and identified over 19,000 loan applicants with outstanding tax returns. We are working steadily through this large group to bring people up to date. As a result approximately $3.5 million in tax has been raised to date.
We have also identified nearly 7,000 taxpayers with 28,000 activity statements outstanding. While we still have more work to do, around 2,400 of these activity statements have been lodged to date accounting for around $3.4 million in tax and penalties.
We have completed audits on a sample of loan brokers who we consider pose the highest risk. To date audits of 16 brokers in NSW and Victoria have raised tax and penalties of nearly $2 million. Audits conducted on 97 clients of two brokers have resulted in adjustments to income totalling just under $4 million.
Industry associations are working with us to address tax compliance issues and brokers who breach codes of conduct. This includes the Finance Brokers Association of Australia and the Mortgage Industry Association of Australia who have joined our industry partnership group.
This will allows us to gather the information we need to check the income required to service the loans matches the income declared in applicants’ tax returns.
Joshua McEwen
Finance Broker – WAhttp://www.prestigeloans.com.au
Brokers Lic 1297
Licensee Brett Christie
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