Institute of Certified Bookkeepers

Taken from the ATO (June 2017)

We know most business owners are honest and that running a business can be difficult. So by finding industry-wide patterns, we can see who may need assistance.

Unfortunately, there are businesses that operate in the cash and hidden economy, gaining an unfair advantage over those who declare their income and do the right thing. We aim to protect honest business from this unfair competition.

We work closely with industry associations, tax practitioners and businesses to understand any issues they may have. We use up-to-date third-party data and sophisticated risk-analysis to identify who may not be doing the right thing or may require more help.

We have found that the community has less tolerance for unfair practices than they once did. If you see something, let us know so we can follow it up.

Visiting Business

We will focus on businesses that:

  • operate and advertise as ‘cash only’
  • our data matching suggests they don’t take electronic payments
  • are part of an industry where cash payments are common
  • indicate unrealistic income relative to the assets and lifestyle of the business and owner
  • fail to register for GST, or lodge activity statements, or tax returns
  • under-report transactions and income according to third-party data
  • fail to meet superannuation or employer obligations
  • operate outside the normal small business benchmarks for their industry
  • are reported to us by the community for potential tax evasion

Why We are Visiting ‘Cash-Only’ Businesses

We are visiting businesses across Australia as part of our ongoing focus on the cash and hidden economy. In particular, we are focusing on businesses advertising ‘cash-only’ or dealing mainly in cash.

We will work with business and industry associations along with local authorities like Chambers of Commerce and councils.

We will be talking to them about:

  • why we are focusing on cash
  • the benefits of electronic payment and record keeping facilities
  • community expectations of paying by card
  • our tools and demonstrating how to use them, including online lodgement
  • making sure they are registered correctly
  • ensuring all businesses pay the correct amount of tax and superannuation by declaring all of their income and knowing what expenses they can claim
  • lodging their tax returns and activity statements
  • meeting their obligations if they are struggling, taking into account specific circumstances, and helping them get back on track
  • any other help they may need.

If we see a business deliberately doing the wrong thing, we have an obligation to do something about it. This could result in an audit or even prosecution.

No matter what kind of business you have, if you are doing the right thing, you do not need to be concerned.

Results from Past Visits

Hair and Beauty Industry

Our recent activities have resulted in:

  • an increase of around 4% in timely lodgement of activity statements compared to the 2015 financial year
  • an increase in GST registrations being corrected
  • more timely payments of income tax and activity statement liabilities
  • a reduction in outstanding payment obligations
  • business owners being supported and educated to make informed decisions about their tax obligations.

Restaurant, Cafe, Takeaway and Catering Industry

Our recent activities have resulted in:

  • an increase of over 6% in timely lodgement of activity statements compared to the 2015 financial year
  • corrections to GST registrations
  • an increase in timely payments of income tax and activity statement liabilities
  • business owners being supported and educated to make informed decisions about their tax obligations.

Building and Construction Industry

Our recent activities have resulted in:

  • an increase of around 5% in the timely lodgement of activity statements compared to the 2015 financial year
  • over 760 businesses in the building and construction industry have been shown our range of online tools and services since July 2016.

If You Have Made a Mistake

If you realise you have made a mistake, or left something out, it is better to come to us first. Reduced penalties may be applied, for example if you:

  • haven't told us about income you have earned, including cash payments
  • claimed deductions you weren't entitled to
  • made any other statement to us that was false or misleading.

References

  • Updated: 21st July, 2017
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