Despite the success of its enforcement against the Black Economy, the Australian Taxation Office (ATO) believes the economic impact is 3% of GDP or around $50 billion dollars. Thus, with more funding, the taxation office continues with its efforts to protect honest businesses from the Black Economy. This time, it has a more targeted approach. For the first time, the ATO has calculated the small business tax gap at 12.5% or $11.1 billion dollars. This means small business will be the ATO’s target.
One way to fight the black economy is the extension of the taxable payments annual report (TPAR). Cleaners, couriers and construction industry businesses had to lodge their taxable payments annual report by 28 August. Whilst the construction industry has been lodging them since 2012, it is the first year that cleaning and courier businesses were required to lodge. Unfortunately, a number of these businesses failed to lodge on time.
Mixed businesses, which provide a range of services other than just cleaning or courier services, may also need to report if payments they received for cleaning or courier services make up 10% or more of their total GST turnover.
Additionally, the black economy taskforce is doing a number of road trips. The team visited around 350 small businesses in Darwin, 400 in Cooktown and Port Douglas, 400 in Healesville, and 500 in Hornsby. These visits are now coming from tip-offs or “community referrals”. The number of calls to the tip off line has increased with the new ATO tax integrity centre opening on 1 July. One third of the tip-offs include information about under reporting of income. The ATO is also looking at businesses that do not have merchant payment facilities and are “cash only”. The majority of their tip offs are coming from competitor businesses.
Know more about the ATO’s continuous efforts to put an end to the Black Economy. Subscribe to Effective PD’s webinar. Visit www.effectivepd.com.au. Effective PD offers an innovative way for busy accountants to be on top of their game with continuing professional development in a brief, flexible and easy way.
