Institute of Certified Bookkeepers

Using Benchmarks to Determine Unreported Income

A cleaning services company appeared to operating on a cash-only basis and was reporting outside benchmarks.

We discovered that not only was the director receiving more payment than his reported wage, there were no records of contractor payments, and significant AUSTRAC cash withdrawals existed, which we suspected were to pay employees and contractors. We also identified an undisclosed bank account.

The owner's lack of record keeping and failure to provide all requested documents was enough for us to apply the industry benchmark. This resulted in $156,179 in unpaid GST and $283,602 pay as you go withholding, as well as total penalties of $156,096.

Reference

  • 24th July, 2018
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