Under the guise of “protecting honest businesses” the ATO has again set out what it is doing catch those operating dishonestly in cash and in the hidden economy (getting an ‘unfair’ advantage over the ‘honest’ business owner).
The ATO says it will focus on businesses that, among other things:
- operate and advertise as “cash only”;
- ATO 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 its 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 super or employer obligations;
- operate outside the normal small business benchmarks for their industry.
We’ve heard all this before, but I can say that such an audit can be ruinous (from the experience of one matter on my desk right now). It’s no fun and the ATO has pretty sophisticated information sources and systems. So, beware.
[ATO website: Protecting honest business; FJM; LTN 204, 25/10/17; TM Oct 2017]