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ATO to visit 800 businesses in Melbourne following black economy warning signs

The ATO is planning to visit 800 small businesses in Frankston and Croydon in the coming weeks as it acts on intelligence about suspected black economy behaviour like not reporting sales.

ATO to visit 800 businesses in Melbourne following black economy warning signs
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  • Maja Garaca Djurdjevic
  • November 07, 2019
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The Australian Taxation Office (ATO) has announced it will be taking a closer look at several Melbourne suburbs in November and early December, following reports of black economy behaviour.

In and around Frankston – the gateway to the Mornington Peninsula – the ATO plans to focus on food businesses like cafés, takeaway establishments and restaurants, in addition to professional services businesses like real estate firms, management consultants and accountants. The visits will all take place in November.

In Croydon and nearby eastern suburbs, ATO officers will be more likely to visit hairdressers and beauty services, cleaning businesses, management consultants and financial advisers, and take away food businesses. The visits will start in November and wrap up in early December.

“In both locations, there are significant numbers of businesses with overdue income tax returns and business activity statements,” said ATO assistant commissioner Peter Holt.

“We’re also aware that some employers in these parts of Melbourne may not be complying with their obligations like withholding tax or paying their superannuation entitlements. These are all black economy warning signs for us.”

The ATO has also received intelligence from other regulators like the Fair Work Ombudsman and tip-offs from locals that suggest the black economy is active in these suburbs.

Tip-offs received have included allegations about businesses in and around Frankston and Croydon demanding cash from customers and paying workers cash in hand.

“Trading in cash and paying your workers in cash is legal, but it’s illegal when it’s off the books,” Mr Holt said.

He explained that visits should only take about 30 minutes and may include discussions about record keeping and payment facilities, outstanding lodgements, tax debts and managing employee entitlements such as superannuation.

The ATO plans to visit around 10,000 businesses this financial year in all states and territories, across a variety of industries.

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