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ATO announces visit to 700 small business in WA following black economy alert

The ATO is planning to visit around 700 small businesses in Western Australia in August as part of its work to tackle the black economy.

ATO announces visit to 700 small business in WA following black economy alert
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  • Maja Garaca Djurdjevic
  • July 30, 2019
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The ATO will be knocking on the doors of some 700 small businesses in Broome, Cable Beach, Derby and Kununurra in August as a result of some tell-tale signs of black economy behaviour.

Assistant commissioner Peter Holt said the visits are all about ensuring a level playing field and curbing unfair competition. The Tax Office disclosed that it has received intelligence from the community that some businesses are paying their workers cash in hand and keeping them off the books.

“We’re particularly concerned about businesses in certain industries gaining an unfair edge over their honest competitors, so some industries are more likely than others to get a visit from us,” Mr Holt said.

The Tax Office explained it will be looking for businesses not being registered for GST or pay as you go withholding, lifestyle and assets far exceeding reported business income, or a lack of merchant payment facilities like EFTPOS.

“We understand that some businesses may not have merchant payment facilities due to individual circumstances. The issue is when businesses are deliberately ‘cash only’ to avoid reporting all their income,” said Mr Holt.

“By detecting and addressing this behaviour, we’re helping to keep things fair for honest small businesses.”

The Black Economy Taskforce estimates that the black economy is costing the community as much as $50 billion, which is approximately 3 per cent of gross domestic product (GDP).

“This is money that the community is missing out on for vital public services like schools, welfare, roads, healthcare and infrastructure,” Mr Holt said.

“Local visits provide us with an opportunity to talk to business owners and help them get things right. During the visits, we may discuss record keeping and payment facilities, outstanding lodgments, tax debts and managing employee entitlements such as superannuation.”

The visits are part of the ATO’s strategy to deal with the black economy. Nearly 9,000 businesses were visited in 2018-19 financial year in all states and territories, across a variety of industries.

As part of the visits, ATO officers will also be providing information about recent changes, such as single touch payroll and the extension of the Taxable Payments Reporting System to certain industries.

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