Tax agents to pay a visit to Bechtel employees
THEY had the warning, now they're getting the visit no one wants - agents from the Australian Taxation Office will descend on Gladstone next week to examine returns from Bechtel employees.
It's not an official audit, but they'll be meeting with tax agents on Wednesday and Thursday and there are reports from multiple local agents that incorrect claims from Bechtel employees amount to more than $50 million - money owed to the tax office.
The ATO has compiled a list of Bechtel employees and approached the agents who represent them. We understand they've selected at least two clients - Bechtel employees - from each agent to examine.
The ATO says it wants to clarify the rules around claiming work-related expenses with Gladstone agents, and ask tax agents for their opinion on how to tackle any outstanding issues with Bechtel employees' claims after October 31 - the deadline for employees to re-submit their returns and avoid fines for any wrong claims, including previous years.
They're most interested in returns from 2013 and 2014 at the height of the boom when there were more than 14,000 people working on the island.
The ATO did not confirm whether or not there would be a wider audit after October 31, but local agents know the ATO won't let $50 million slip through the cracks.
"This issue is not going to go away," H&R Block tax manager Karen Windress said. "This is an important case happening with Bechtel employees and people can't just bury their heads in the sand. We need further clarification from the ATO on this because there are too many people saying 'no he's wrong and she's wrong or I can claim that', or saying 'but he got $10,000 back'."
Last month the ATO sent out a Bechtel Curtis Island specific fact sheet to about 10,000 employees, pointing out that employees can't claim expenses covered by allowances.
Ms Windress said the base rates for employees on Curtis Island were on par with others in the Australian construction industry and that it was the allowances which made the total pay attractive - and caused all the drama.
She said although the ATO was looking at allowances generally, travel and ferry allowances were in focus because a single employee could be paid up to $20,000 in one year for travel.
Agents from the ATO were looking for a better understanding on how each agent with Bechtel employees calculated claims and Ms Windress said she would be glad to meet them next week.
"There are too many innuendoes flying around Gladstone," Ms Windress said. "This is a good thing."
Other local accountants have raised concerns over "audit insurance" with some employees under the impression they won't need to re-do their returns if they have insurance. But insurance won't cover penalties and fines issued by the tax office for wrongful claims.
The attention on Bechtel employees comes after the ATO analysed claims and found some were higher than expected compared to other employees with the same working conditions.
Despite some criticism on the accuracy of the fact sheet, the tax office has "strongly encouraged" all workers to review their tax returns.
We understand up to 5000 employees may be facing a tax bill after re-submitting their returns - or fines if they don't take the ATO's advice.