The ATO has put professional business owners on notice. Here’s what you need to know
Just before Christmas, the Australian Tax Office (ATO) issued its new approach to professional firm profits — the Practical Compliance Guideline (PCG) 2021/4 — four years after the previous guideline on professional firm profits was suspended.
The guideline provides a broad outline of the ATO’s approach in applying additional scrutiny to business owners who share in the profits of a professional business.
The changes could impact a wide range of professional equity owners in businesses — while leaving non-professional equity owners untouched.
So what does the new guideline mean for professional business owners?