Friday, November 12, 2010
It published this week a list of "benchmarks" for 15 types of businesses that have until now largely escaped its crackdown on the cash economy because it was unable to estimate how much they should be taking.
It began the program with trades two years ago publishing benchmarks for what tradespeople such as bricklayers should be taking based on their purchases of bricks.
The new benchmarks use a different approach, targeting businesses such as frock shops, florists and hairdressers, setting standards for what each is of cash each business is likely to take over and above its credit and debit card sales...
Proclaimed in the Government Gazette this week is an order allowing the Tax Office to get debit and credit card data relating to 200,000 small businesses from banks including Westpac, the Commonwealth and the Bendigo and Adelaide Bank.
"We'll have their sales by merchant card, we will compare that to the sales they report in their activity statements, and if the excess seems low we will send them a letter." Senior Assistant Commissioner Chris Barlow told the Herald.
"We recognise that high end clothes shops selling haute couture have probably 80 per cent of sales by credit card, whereas at shops selling cheaper clothes probably 80 per cent of the sales will be in cash. We have a range of benchmarks based on turnover and the average sale price."
"A proportion of those businesses that don't conform will get letters suggesting they might have made a mistake and inviting them to make a voluntary disclosure."
The beauty of the approach for the Tax Office is that sending letters to only a proportion of non-conforming businesses provides it with vital information.
"With the earlier benchmarks we found that those that had received the letter were 40 per cent more likely than those that had not to lift their cash reporting the following year,"
Published in today's SMH
You take cash?
Expect a letter if you're in
. Nail salons
. Coffee shops
. Florists shops
. Fruit and veg
. Petrol stations
. Milk bars
. Garden shops
. Pubs and bars
. Takeaway food
ATO 2010 Benchmarks
. Four hundred 'please explain' letters per day - how the Tax Office gets money
. You'll get mail. From the Tax Office.
. Who the Tax Office is Targeting