ATO’s tracing technology is getting better and better each year when it comes to detecting any off-the-book transactions and side hustles that you may have thought were slipping past the radar.
Cash is making a comeback post-COVID, with plenty of it now back in circulation, and although it may be tempting to leave cash payments, and even some business to business payments, from your returns, Assistant Commissioner Andrew Watson says this is a mistake.
The ATO has warned all SMEs to avoid the temptation and ensure that they are declaring all cash transactions. The taxable payment reporting system will reveal many transactions, and even money earnt away from the core business, so it is important that this is still classed as income.
Other temptations for business owners exist around business to business payments as well as some point-of-sale technology. However, the ATO receives a variety of reports for building and construction, courier, cleaning and IT industries, so it’s important that all payments are included. If they are not, suspicions will be raised.
Andrew says that the technology that takes exchanges “off-till” is being scrutinized actively by the ATO. Digital versions of ‘slipping cash bills under the till’ are illegal in Australia, although there is an emergence of such technology.
Electronic sales suppression technology is a modern approach to hiding some transactions and some business owners wrongly believe that having some of the alternative payment methods and simply not declaring them is going to be enough to fool the ATO.
However, the warnings are clear. The ATO are aware of the tools and resources that are used by businesses and, through their own tracing tools and reports, are able to identify discrepancies.
The consequences can be quite a costly and lengthy experience that no business owner should want to go through. By declaring all of your income, you can put yourself both at ease and on the right side of the ATO.
If you’re finding it hard to pay your taxes, there are a number of solutions. Our team at YBM are able to approach the ATO on your behalf, discussing your situation directly with them, and determining the best path forwards.
Additionally, our Business Advisory team is on hand to work through cash flow budgets and identify strategies to help you better manage those times when tax installments are due.
Make sure you discuss your situation with one of our team members so that we can provide the right advice to help your business thrive. Click here to contact us today!