Businesses next up for ATO visits

Approximately 400 businesses in Victoria and 500 in New South Wales have been tagged for planned visits by the ATO in August and September.

It is a part of the 10,000 businesses that ATO is planning to visit each year to target the black economy. The timeframe of the ATO to conduct such visits will be within the next four years.

Businesses that will be targeted in Victoria have been triggered by community tip-offs in industries such as building and construction whereby certain businesses gain unfair competitive edge over their honest competitors.

Such advantages are around the areas of sham contracting, underpayments and paying wages in cash, all of which are signs of black economy activities as per a comment made by ATO assistant commissioner Peter Holt. Other areas of concerns are the use of cash payments to hide income and not meet other obligations, for example, paying cash wages without keeping records, not declaring cash sales, not recording some sales and other activities to avoid their tax and super obligations

Further to this, Mr Holt commented that targeted businesses in New South Wales will be visited to cover topics around super and PAYG tax withholding obligations. Such visits give opportunity to engage the businesses for one on one education sessions about the tools and information they need to correctly register, lodge on time, maintain accurate business records and correct any mistakes. Recent changes, such as Single Touch Payroll and the extension of the taxable payments reporting system to certain industries will also be discussed.

In addition, the ATO publishes business metrics as benchmarks for certain industries and can be used as a comparison on how your business is performing against similar business in your industry. Benchmarks are used by the ATO in addition to other risk indicators to identify if businesses are avoiding their tax obligations.

If you have any concerns on how the above may affect you, please contact your tax professional.

Source: Written by Michael Rodriguez, Director of Cambridge & Kent, Sydney, August 2019.