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Tax practitioners have been advised to prepare themselves and their small business clients for a potential door knock by the ATO over the next 12 months as it investigates the workings of the cash economy.
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Get ready for ATO door knocks, tax and BAS agents told
11 July 2018
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Earlier this week, the ATO announced that it would be visiting businesses in inner city suburbs in Sydney, including Surry Hills and Darlinghurst, as it looks to ensure businesses are registered correctly and are paying the correct amount of tax and super by declaring all their income, with a possible audit for errant businesses.
Speaking to Accountants Daily, ATO assistant commissioner Matt Bambrick said that over the next 12 months, the tax office will deploy further mobile business visits to 30 various locations across the country as it finds an increase of businesses in need of support. The locations have yet to be finalised.
The increase in mobile visits comes as the ATO receives an additional $318.5 million in funding to implement to combat the black economy, including measures to target egregious tax practitioners who enable black economy activities.
“Tax practitioners are a very important part of the tax system, what they do with their clients influences what kind of results you see with the clients,” said Mr Bambrick.
“They are the key point of support for the clients so there are of course a few who are problematic but most tax agents are of course trying to do the right thing by the tax system and their clients so they are a key part in anything to do with the tax system.
“The increase number of visits to talk face to face is due to the increase in finding of businesses in need of support.”
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The ATO has publicly commented on how some tax practitioners may be fuelling black economy activities through the work they do with their clients and will be looking to leverage this influence by visiting tax agents during this cash economy focus.
“That’s to increase the focus we already have in relation to tax agents who may need that support from us to be able to support the client. We're just going to do more,” said Mr Bambrick.
Accountants Daily also understands that the ATO will be looking out for electronic sales suppressions tools, a move that follows a bill before parliament aimed at banning such tools.
According to the ATO, sales suppression technology and software allows businesses to understate their incomes by untraceably deleting selected transactions from electronic records in POS equipment.
The expansion of the taxable payment reporting system to three new industries, including security providers and investigation services, road freight transport, and computer system design and related services, have also been highlighted as a point of focus for practitioners to keep on top of.
The extension follows the earlier introduction of TPRS to the courier and cleaning industries as announced in the 2017–18 budget, with that set to kick in from 1 July 2018, if the bill is passed.
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