I am new to all this points collecting practice. It seems like it’s actually quite easy to collect 250k points with many credit cards offering sign-up bonuses and some cards paying 3 points per dollar spent.
I have read that the ATO might pick up on anyone who has accumulated 250,000 for audit.
I know that not all points are equal in value but somehow it seems the ATO has decided on 250k points as a trigger regardless of actual value of points.
Has anyone been audited (or heard of such) because of earning 250k in reward points? One needs to collect large amounts of points every year for the whole practice to be meaningfully useful and it just seems so not worth the effort if a big audit is triggered because of it.
None of this applies to people who accumulate points as a result of their personal, non-business spending on their personal cards.
This is all about people who collect points from their company, business or employer as a result of business spending. This makes the points a fringe benefit, which potentially needs to be declared to the ATO. Speak to your accountant if in doubt, and I would venture to say you’ll be fine unless you do something illegal.
Yes, there are a few people out there who have the luxury of collecting a zillion points per year as a result of being able to pocket the points from business spending. The vast majority of us, though, collect our points from personal spending. If you’re worried, simply do what most people do and focus on accumulating points from personal spending.
Nonetheless, how can the ATO know whether the points come from personal or business spending without first auditing you? For example, if you bought a car for $20,000 using a credit card and got points, how can ATO know if the car is for business or personal use or a proportion of each without first auditing you?
The problem I worry about is that accumulating 250k in points flags for you audit regardless of whether you are cleared later. It’s the auditing process that is arduous to go through, not the results that worry me.
So I was just wanting to see if anyone here has been audited from having a large amount of points to gauge how likely it is to happen and exact how arduous (or not) the auditing process is. Can you imagine trying to explain where each of your 250k+ points come from and which proportion is business or FB related or not and what you have used them on and what proportion for business or not? Or can you even argue that the personal points got used for personal stuff and the business points for business stuff etc? Once the points are pooled together, which is which? It would be a nightmare!