The tax office has announced that its investigators will be hitting the streets, visiting businesses directly as part of its ongoing crackdown on the “black economy”.
In a statement, the ATO said that it will drop in as many as 500 small businesses across Tasmania, with areas in and around Launceston and Smithton a key focus for officers, who may show up unannounced.
Of particular concern to the ATO are businesses that advertise as being cash only, as well as those that operate outside of its business benchmarks for their particular industry and location.
“Businesses that pay cash in hand, or fail to lodge income tax or business activity statements, get an unfair advantage and make it harder for other businesses who are doing the right thing,” assistant ATO commissioner Peter Holt said.
“By detecting and addressing this behaviour, we’re helping ensure a level playing field for honest small businesses.”
The most likely businesses to receive a visit from ATO officers in Tasmania this month have been identified as:
- Restaurants and cafes
- Vehicle repairers
- Personal care businesses including hairdressers and nail salons
- Construction businesses
- Clothing stores
- Grocery stores/small supermarkets
Not just checking up on, but checking in with
According to Mr Holt, another purpose of the visits is to make ATO officers available to help honest businesses on the ground who may have questions or struggle with trying to play by the rules.
“Good record-keeping is essential in business, and that’s one of the problems we’ve helped people fix through our visits. We’ll be happy to give you a hand to get things right,” he said.
“We obviously want businesses to succeed, so we put a lot of effort in to support, education and assistance services. We offer seminars, videos, a dedicated small business newsroom, an after-hour call back service, even an app that businesses can use to check the performance of their business on the go.
“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.”
Prior to its visits, the ATO will be conducting information sessions for local business owners on what happens during these visits, and how to avoid common mistakes that are uncovered by investigators.
Tassie visits part of nationwide crackdown
While Tasmania may be the current focus, Mr Holt warned that the ATO’s crackdown on undeclared income is an ongoing, nationwide endeavour.
“In the 2019–20 financial year, we’ll be visiting a further 10,000 small businesses across the country, including in Tasmania,” he said.
“The black economy is estimated to be costing the community as much as $50 billion, which is approximately 3 per cent of gross domestic product (GDP). This is money that the community is missing out on for vital public services, like schools, roads, healthcare and infrastructure.”
The ATO was given a $318.5 million funding boost in last year’s federal budget, in order to expand its capabilities to detect undeclared income and chase taxes owed.
Last November, the tax office said that it would visit 10,000 businesses in 30 locations across Australia within a 12-month period, evenly spread between metropolitan, regional and remote areas.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.