Earlier this year, the Tax Office announced that it would visit businesses in and around Launceston and Smithton in a bid to tackle the cash economy.
ATO assistant commissioner Peter Holt said the visits have been beneficial to both the Tax Office and small businesses, particularly its one-hour information sessions that explained the purpose of the visits and how to avoid common mistakes.
“We’re really pleased with how things went in Launceston and Smithton. We were able to help legitimate small businesses to get back on track and commence initial audit activities to those who are deliberately doing the wrong thing,” Mr Holt said.
“During our recent visit, we spoke to small businesses about their operations and discussed some of the black economy risks we were concerned about including the most common mistake we see of small businesses failing to keep appropriate records or not declaring all their income.
“From our visit, we identified a number of small businesses that raised immediate red flags including a restaurant and a store which showed signs of potential black economy activity. These signs include undeclared income and significant cash moving through the business without the income being accounted for in the books.”
Business owners were also briefed on other black economy risks such as potentially omitted income, over-claimed expenses and risks related to paying cash wages, with educational material provided on the topic.
The mobile strike visits come as part of the $318.5 million federal budget funding boost to the ATO to implement new strategies to combat the black economy, which has been estimated to cost $50 billion.
The Tax Office said that it would be visiting 10,000 businesses across the country each year for the next three to four years.
“We want to help Australian businesses get their tax and super right. We understand that people are busy and most businesses are trying to meet their obligations — but there is a difference between needing help, making mistakes and deliberate cover-ups,” Mr Holt said.
“Businesses found as part of the visits to be deliberately not doing the right thing, can expect further action from us.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.