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ATO to focus on cash-only businesses

Posted on 1 November '17 by , under Tax.

To protect honest, compliant Australian businesses, the Australian Taxation Office has placed a strong emphasis on targeting the cash and hidden economy.

The ATO is visiting businesses that deal predominantly in cash, with a focus on those that:

  • Fail to meet super or employer obligations, and that fail to register for GST or lodge activity statements.
  • Operate outside regular small business benchmarks specific to their industry.
  • Show discrepancies between what they have reported and our collected data relating to electronic payments.
  • Operate and advertise as cash only.
  • Income does not correlate with the lifestyle of the business owner, i.e. assets and spending habits exceed what is expected of someone with their reported income.
  • Are reported to the ATO by members of the community or any third party regarding potential tax evasion.
  • Are part of an industry that is known for dealing primarily in cash only.

When out visiting cash-only businesses, the ATO will be working in unison with local authorities and industry associations to asks questions and discuss:

  • Why the business operates primarily or only in cash.
  • The need to lodge tax returns and activity statements.
  • How to be compliant in relation to tax and super obligations.
  • Different claims and tax deductions businesses can make.
  • The general community preference to have EFTPOS or electronic payment options available to them.
  • Benefits of electronic payment and record keeping facilities.
  • Relaying tools and services businesses can use if they are struggling to ensure they are compliant with Australian tax laws.
  • Any other help they may need.

If the ATO comes across a business that is doing the wrong thing or failing to meet their obligations, they have a duty to take action. This may result in the business facing an audit and possible prosecution.

If you have made a mistake and make a voluntary disclosure detailing your errors, the ATO will work with you to rectify this and create a solution.