The Australian Taxation Office has issued a fresh warning to Aussie businesses doing “cashies” as it cracks down on tax evasion.
The shadow economy — people and businesses that deliberately avoid paying the right amount of tax — is estimated to cost the Australian economy $12.4 billion every year in unpaid taxes. The ATO is trying to change that, this year announcing a “crackdown” on several groups of Aussies it suspects aren’t paying up.
ATO assistant commissioner Tony Goding said it was getting harder for businesses to hide from the ATO, with taxable payments annual report (TPAR) data helping it to spot dodgy behaviour.
“We know there are some who deliberately don’t report, or under-report, their income, making it unfair for honest businesses,” Mr Goding said.
“Dodgy businesses doing ‘cashies’ are being put on notice as the ATO continues to crack down on shadow economy behaviour.
“If you are asking for cash and not declaring it to the ATO, you will receive a ‘please explain’ from the ATO and you will be penalised. It’s not a matter of if, it’s a matter of when.”
Businesses who make payments to contractors may be required to lodge a TPAR by August 28, 2023.
Mr Goding said failure to meet that deadline may be seen as a “red flag and prompt closer scrutiny”.
“The taxable payments reporting system is just one tool in the ATO’s tool belt helping expose missing income and keeping things fair for businesses doing the right thing,” he warned.
“We use a range of information in the TPAR to check for red flags, like not including income, not lodging tax returns or activity statements, over-claiming GST credits or misusing Australian Business Numbers.”
The ATO recently issued more than 16,000 penalties to businesses who didn’t lodge their TPARs for previous years, despite receiving reminders, with an average penalty of $1110.
Cash business-owners are one of a host of Aussies being targeted in the ATO’s crackdown, as well as side hustlers, landlords and people who work from home.
Fellow ATO Assistant Commissioner Tim Loh recently said as many as nine in 10 tax returns for property investors were incorrect.
“We are really focused this year on making sure rental property owners and their registered tax agents understand their obligations. We are going to be increasing our activities in this area,” he warned.