The Australian Tax Office (ATO) has expanded their efforts to combat the “Cash Economy”. The “Cash Economy” refers to business transactions settled in cash and then not recorded as either income or expenditure. We feel that a number of small business owners will be struggling to understand that at a time of adverse economic conditions, when business owners have to literally pour money into their business from borrowings and other sources, the ATO is announcing that it will intensify its compliance and audit activities.
The ATO is sending around 100,000 letters to small operators around the country, informing them that their income is outside their industry’s “Benchmark”. Many more taxpayers will receive a phone call from the ATO regarding the “Benchmark” and their perceived low taxable income.
These “Benchmark” are a set of business percentages that have been arrived at after consultations between the ATO, representatives from various industries and professional bodies and also from information gathered from tax returns of taxpayers operating within the relevant industry.
If you receive either a letter or a call from the ATO please let us know by email or by calling 1300 889 848.
We can’t stress enough the need for all our clients is to make sure that accurate records of income and expenditure are kept so that documentary evidence exists should the ATO have any questions.