Small Business Benchmarks Updated by ATO

(last update 01/04/2014)

See this post for details of the ATO's 2014 hit list - Tradies 2014 Tax Returns Targeted.

Small business benchmarks are financial ratios developed by the ATO from information provided by sub-contractors and businesses on their tax returns and activity statements. The benchmarks can be used to help  compare the performance of your business operation against similar businesses in your industry.

The ATO uses benchmarks and other risk indicators to identify businesses that may be under
reporting income or over reporting expenses. Benchmarks are also use by the ATO where a business does not have evidence to support their return and can also be used to determine income that has not been reported. 

Benchmarks are published for businesses with different turnover ranges across more than 100 industries. They are generally published as a range, to recognise the variations that occur between businesses due to factors such as location and the businesses circumstances.

Businesses reporting outside the benchmarks may attract the ATO's attention. The ATO recognises that variations and differences will apply to many small business operations, for example, higher costs or lower selling prices than others in the industry, but the difference may also be an indication that a business is not recording and paying tax on all its transactions, especially cash transactions.

Small business benchmarks are listed by both business type (A–Z) and business industry categories based on our business industry codes or Australian and New Zealand Standard Industrial Classification (ANZSIC codes).

You can also find the benchmarks by using the search function and searching by:
  • business type or industry
  • going to - see this link to the ATO's list of Benchmarks A–Z.
Small business operators and sub-contractors should talk to their accountant who is able to check financial information against the ATO's Benchmarks. If you find you are outside the benchmarks for your industry, check that you have correctly recorded and reported income and deductions for your business. To do this you should review your record-keeping systems and procedures to ensure they meet the legal requirements. From experience I can assure you that businesses dislike the pain of an ATO adjustment more than a big refund.

If  you want further assistance with benchmarks, My Tax Zone has the genuine qualifications, skills and experience to attend to your professional accounting and bookkeeping needs. Please contact our office on:

07 3208 3888

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

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.

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Our Web Based Tax Return App will step you through all the necessary questions to increase your 2014 tax refund estimate and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started! 

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