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Tax Man comes knocking

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The ATO has revealed it will continue a crackdown on businesses that rely on cash payments, noting that $143 million in tax and penalties were collected last year from firms mishandling cash accounts. In a note to tax professionals, the ATO revealed that it "will begin more … visits around the country soon” as part of its Protecting Honest Business campaign.

"While we know not every business is doing the wrong thing, we found over 60 per cent of the businesses we visited so far need to take some kind of corrective action,” it said."There are businesses that operate in the cash and hidden economy, gaining an unfair advantage over those who declare their income and do the right thing. We aim to protect honest business from this unfair competition.”

Elaborating on the statement, assistant commissioner Matthew Bambrick said that more than 2,600 businesses were targeted during 2017, with follow ups on those still ongoing. During the last 12 months, eight regions across Australia were targeted: Perth CBD, Canberra, Cabramatta (NSW), Werribee (VIC), Sunnybank (QLD), Liverpool (NSW), Glen Waverley (VIC) and Glenelg (SA).

"Anecdotally, during these visits we have noticed that many businesses have a lack of record-keeping education and knowledge of appropriate processes,” Mr Bambrick said."Some businesses admitted to not recording all sales and just averaging or estimating sales information; many business owners sought recommendations for electronic payment facilities and showed significant interest in online tools and services; and a small number of businesses were identified without current ABN and GST registrations.”

As many as 60 per cent of businesses investigated have been found to have effectively hidden profits from the ATO, which Mr Bambrick suggested has resulted in a substantial underpayment of taxes. "In the first six months of 2017-2018, we have conducted 5,020 reviews and audits resulting in approximately $143 million in tax and penalties,” he said.

(Source: MyBusiness 31 January 2018) 

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