If you own or manage a small business that uses cash transactions you’re a target of the Australian Taxation Office (ATO).
The ATO has revealed it will use extra funding from the Federal Government to increase its efforts to catch small businesses operating a cash-based transaction system inappropriately. As well as extra resources that the increased funding provides, the ATO has also improved its data matching abilities to help identify businesses that might be doing the wrong thing.
The ATO’s second commissioner Bruce Quigley says he expects around 26,000 small businesses that mainly operate in cash to be audited over the next year.
Other targets of the ATO for the 2010/11 financial year have been revealed. They are:
- Trusts used by small to medium business enterprises
- Shareholder loans
- Small businesses that have received BAS refund claims
- Employers who aren’t meeting obligations to make tax and superannuation payments for employees
- Companies with a turnover of $100 to $250 million
- Small businesses that claim losses
- Fringe benefits tax, particularly in the area of motor vehicles
- Capital asset sales
- Wealthy taxpayers, particularly those operating in private groups and executives earning in excess of $1 million a year
In better news for small businesses, the ATO has decided to extend the Small Business Assistance Package until the end of the 2010/11 financial year. The package allows small businesses with a turnover of less than $2 million a year to access 1-year interest free payment arrangements and defer activity statement payments.
Here to help
If you are concerned you might be targeted by the ATO or want to know more about the Small Business Assistance Package, contact Davenports. As with all financial matters, it is better to act early and be prepared rather than address issues at the last minute.