WARNING - CASH BUSINESSES ON ATO RADAR!!

The ATO has begun sending out letters and emails to tax agents of businesses (as well as businesses directly) who they have identified as being predominantly cash-only businesses. 

This serves as a timely warning that the ATO is now taking the cash economy very seriously.  They will investigate and levy interest and penalties where serious abuse of the tax system is identified.

This is a timely reminder for businesses to review their business processes, fix any mistakes and move into the digital age. 

Businesses that accept cash payments only and/or penalise customers for paying electronically will be contacted by the ATO and their tax returns scrutinised.  All cash received is taxable income and must be declared in a tax return. 

It is understandable that businesses see tax as a burden and try to minimise this by skimming cash.  However, when you factor in the value of lost sales (when customers shop elsewhere) and the negative impact of an ATO investigation (interest and penalties), this may very well outweigh the supposed benefits of being predominantly a cash-only business.  

Should you wish to discuss this further, please contact our office.