ATO conducting roving audits to put the brakes on the Black Economy

In an effort to stamp out the black economy the ATO have been combing the country over recent months conducting on site visits to businesses, with Bathurst in NSW the latest area to receive attention. 

Over the next two months, ATO officers plan to visit approximately 300 Small and Medium businesses in that area, as well as conducting public information sessions.   

The ATO claim these visits are in response to a number of tip-offs regarding businesses who are not reporting all of their sales or are paying employees “cash in hand”. 

The latest round of visits follows a blitz on businesses in the QLD regions of Moreton Bay and New Farm in Brisbane.  Since July, 2018 the taskforce have visited over 30 regions in Australia and they plan to visit over 10,000 businesses this financial year alone.   

According to the ATO, the focus of a site visit is help businesses get the help they need to comply with their tax obligations and the ATO officer will focus on: 

  • Record keeping  
  • Outstanding tax obligations 
  • Employer obligations 
  • How to fix mistakes 
  • The benefits of electronic record keeping 
  • ATO tools and products available 

After receiving a major funding boost in the latest Federal Budget, the Black Economy task force are focusing on the following key measures to improve the overall integrity of the tax system and reduce the size of the cash economy: 

  • Extension of the Taxable Payments Reporting System 
  • Eliminating the illicit tobacco market 
  • ATO enforcement targeting those engaging in the Black economy or avoiding employer obligations, including site visits and new data matching technology to better identify tax avoidance
  • Improving the integrity of the Commonwealth Procurement Process 
  • Improving digital delivery of services 
  • Introduction of the proposed economy-wide cash payment limit  
  • Removing tax deductibility of non-compliant payments 
  • Proposed changes to the ABN rules  
 What do you need to do?

 We’ve produced a number of resources to help you understand your obligations in relation to the key areas targeted by the Black Economy task force: 

  1. Employer Obligations – helping you to get it right when it comes to paying your employee’s super – Click Here for more info 
  2. Employer Obligations and New Employee Checklist – Click Here for more info  
  3. Removing tax deductibility of non-compliant payments – Click Here for more info 
  4. Extension of the Taxable Payments Reporting System –  outlined in our September newsletter
  5. Proposed limit on cash payments – outlined in our March newsletter

If you are a business that receives cash takings, it’s really important that you keep appropriate records.  In the past when we have participated in these record keeping reviews with clients, the ATO have asked for till tapes, bank statements, sales invoices, Activity Statements and copies of reports from the business’ bookkeeping system as evidence that takings are being accounted for.  Their process is to trace the flow of funds right from till tapes through to bank statements through to business accounting records and ensure this is getting declared correctly on your Activity Statement.    

The Atticus team are here to help you make sure you understand your obligations and help you comply with the rules in the most efficient manner to drive your business forward.  Talk to us if you need help.   

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