ATO to launch black economy hotline

In its effort to fight the black economy, the Australian Taxation Office (ATO) will set up a new black economy hotline on 1 July 2019.

“We want people to contact us and tell us about instances where people might not be doing the right thing,” deputy commissioner Deborah Jenkins said.

The ATO’s mobile strike approach to battling the black economy has so far seen it visit 7,700 small businesses in 22 locations. These visits have resulted in around 1,300 further compliance interactions on those businesses.

Around 1,800 tax and BAS agents with outstanding income tax or activity statements have been identified and differentiated treatment strategies are being deployed to re-engage or address behaviours and non-lodgment.

“Our strategy isn’t just about firmer action because we recognise that people sometimes just don’t understand their obligations, so we have a range of education topics available and are also currently tailoring products to build business management, financial, digital and tax and superannuation acumen,” Ms Jenkins explained.

She revealed that while 92 per cent of small businesses use a tax professional to lodge their tax return, only 53 per cent use a tax professional to lodge their BAS.

Ms Jenkins noted that while businesses who regularly engage a tax professional tend to be operating well, “not every business who uses a tax professional is getting it right”.

“Sometimes this might be unintentional on the part of both parties, but sometimes it is intentional under reporting or over-claiming. We understand that tax practitioners rely on the information their clients provide, but we do expect that you’ll do some basic checking and ask questions to ensure your clients have included everything that they need to. If it doesn’t sound right, ask again,” Ms Jenkins advised.

The ATO's crackdown will continue in the 2019-20 financial year, with the Tax Office expecting to visit around 10,000 small businesses across the country.

As part of the visits, the ATO will also be visiting tax practitioners of small businesses in these areas as part of our early intervention strategy. These visits are expected to help it better understand the drivers behind agent behaviour and provide education and support to encourage willing participation of their clients in the tax and super systems.