Small businesses beware! 10,000 small businesses are set to be targeted by the ATO as part of their ongoing crackdown on the Black Economy. This is an increase from the 9,000 businesses targeted last year. So it's now more important then ever to make sure you're doing the right thing and getting the right advice!
The ATO has a hole to fill in terms of tax revenue to the tune of about $10billion and they are definitely doing what they need to do to recover it.
The ATO has been publicly disclosing the areas they’re targeting in their media releases and to date:
- 300 businesses to be visited in Bathurst NSW
- 400 businesses to be visited in Inner-North Brisbane QLD
- 400 businesses to be visited in North Queensland
- 400 businesses to be visited in Healesville Victoria
- 500 businesses to be visited in Hornsby NSW
- 350 businesses to be visited in Darwin NT
- 400 businesses to be visited in Port Macquarie NSW
- 400 businesses to be visited in Bankstown NSW
- 300 businesses to be visited in Bega and the NSW South Coast
Many of these area investigations have been because of the recently introduced voluntary tip-off service, which allows for the community to report businesses who they believe are doing the wrong thing. So, as a business owner, you should start to think twice about how you manage your business because at any given moment, your neighbour, competitor, customer, or anybody else could dob you into the ATO.
Artificial intelligence is playing a massive part in the ATO's plan to plug the small business tax hole as they are increasingly using artificial intelligence algorithms to make comparisons against other businesses in the same industry. Honestly, to go into this would not only bore you but also require a book. The end result is that not only is the ATO getting smarter in catching out bad eggs, it's now able to catch them more often!
The ATO is not only investigating businesses directly but also dealing with the tax professionals in these areas, which is wonderful news, because not all tax professionals are created equal. Truthfully, there is a very negative perception around Tax and it is often because it is very poorly understood. Clients place so much trust in their accountant to properly manage their tax affairs, and because they may not necessarily know the right questions to ask, they don’t know if something has gone wrong until it does.
Think about it, you trust somebody to do something that you're not very confident in doing, and then find out they haven't been doing it right. Wouldn't you find it hard to trust again?
So, as a business owner I would be asking myself three things at this point:
- Am I conducting myself and my business in a way that the community would applaud?
- If the ATO were to tap me on the shoulder to investigate, would my business pass an ATO investigation?
- Does my accountant give me the right advice to not only help me within my business but also to protect it from a potential ATO investigation?
You should be able to answer these questions with a firm YES, because it's not a question of 'if' you'll be investigated, it's slowly turning into a question of 'when'.