The ATO have announced that they will be visiting businesses in the Fortitude Valley, New Farm, Teneriffe and Newstead areas as part of their measures in monitoring the ‘black economy’ (e.g. cash jobs).
In particular, they will be requesting information from businesses regarding their record keeping and payment facilities, registrations, outstanding lodgements, tax debts, and employer obligations such as super. This is in order to ascertain:
- Unreported or misrepresented sales
- Omitted income, including missing payments and online transactions
- Overstated expenses
- Lack of record keeping knowledge (in terms of sales, expenses, staff, rosters and controls)
- Discrepancies between activity statements and tax returns
- Businesses that are operating outside the tax system
- When lifestyle and assets don’t match up, like owning property and vehicles that they would need much higher incomes to cover
- Businesses reporting outside of the business benchmarks
- Not complying with employer obligations.
The findings following the visit could result in further proceedings being taken by the ATO including a review or audit of the business. Cracking down on the black economy by the ATO is something we fully support as these businesses are getting a free ride on the back of other taxpayers and an unfair competitive business advantage.
However, we do have concerns about how the ATO generate their target lists as historically some ATO intelligence has not been based on solid information.
Further, whilst we respect the job the ATO are tasked with doing while they pursue black economy operators, the ATO also needs to be sure that their officers operate within the law. If the ATO does visit your business, you are not required to provide them with information that they have no legal right to access immediately and can request that they specify the required information in writing. In fact, we would suggest it is best policy not to furnish them with any information or answer any questions based on an unannounced visit. Politely ask them to put any requests in writing so you can properly consider and attend to any answers together with your advisors.
Of course, be professional and respectful.You are not trying to antagonise anyone but simply asking for due process. We would advise that businesses who are visited seek immediate tax/legal advice before adhering to the ATO’s request for information.
If you require assistance regarding such matters, contact Steve Toohey or Peter Donovan at Toohey Reid who specialise in assisting clients with ATO requests and audits.
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