ATO Campaign on Tradies and "Cash Economy"

For some time now the ATO has been monitoring certain industries using "benchmarks" on income and expenses establised over the past few years.

As a accountant/tax agent, we have been informing clients of ATO expectations. Now, it seems, they are ready to strike.

In today's Courier Mail, the ATO annunced: "TENS of thousands of trades-people across the country could soon face tax audits after the Australian Taxation Office launched its biggest-ever crackdown on accountants and tax agents operating in the cash economy."

Tradies are not the only target. Any business operating in the "cash economy", including takaway shops and restaurants, may be at risk.

From my own experience, many small businesses have been doing it tough since the GFC, resulting in lower incomes and in some cases higher costs. In any case, if the figures included in tax returns can be properly substantiated, there should be no problem.

We had a case recently where a water business was traveling under benchmark income figures purely because of rain fall in South East Queensland over the last couple of summer seasons. Because the business operator kept detailed records, the ATO satisfied itself that all was above board.

If you fit the profile of under performing compared to benchmark figures, in all likelyhood you would have received a relevant letter from the ATO with all the appropriate warnings. If so you should be well prepared.

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle - checklist of eTax and Assessable Income and deductions and checklist of eTax and Allowable Deductions.

 For help with your eTax return see our eTax Return Checklist.

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