The ATO has stepped up its crackdown on the shadow economy: businesses that under-report cash sales, pay staff off the books or operate outside the tax system. In recent weeks, ATO officers have made unannounced visits to hospitality venues, following earlier visits this year to farms in regional NSW and hospitality businesses on the Gold Coast. The ATO has reported receiving around a thousand tip-offs a week.
The ATO’s stated aim is to protect the businesses that do the right thing from being undercut by those that don’t. If you run a café, restaurant, trade or retail business on the Northern Beaches, it’s worth checking you’d be comfortable if they walked in tomorrow.
What the ATO looks at
- Cash sales: are all takings going through the register and into your accounts? The ATO benchmarks businesses against others in the same industry, and figures well below the benchmark attract attention.
- Wages: are all staff paid through Single Touch Payroll, with PAYG withheld and super paid? Cash-in-hand wages are a key focus.
- GST registration: businesses with turnover of $75,000 or more must be registered for GST (for ride-share and taxi drivers, from the first dollar).
- Money taken out of a company: if you run a company and draw funds for personal use, Division 7A rules apply. The ATO has named this as a current small business focus.
Your quick readiness check
- Every sale, card or cash, recorded in your POS and banked or reconciled.
- All staff set up in payroll software with STP reporting.
- Super paid with every pay run under Payday Super.
- Records kept for five years, including cash register reports.
- Personal drawings from a company documented as wages, dividends or a compliant loan.
If something isn’t right
Coming forward voluntarily before the ATO contacts you generally leads to much lower penalties than being found in an audit. If you’re worried something in your books isn’t right, talk to us confidentially and we’ll help you fix it properly.
This article is general information only and doesn’t take your circumstances into account. Speak to us before acting.
