Tax office to crackdown on “cash in hand” black economy

THE taxman will crack down on cash-in-hand payments, targeting blue collar workers in its quest to catch out cheats.

As Australians fill out their tax returns, the Australian Tax Office will today reveal it’s hit list for professions in the crosshairs. High claims by building and construction labourers, construction supervisors and project managers as well as sales and marketing managers.The hospitality and carpentry industry will also come under scrutiny for failing to pay employees their superannuation entitlements.

The ATO’s Second Commissioner Bruce Quigley said one of the biggest problem areas they will be targeting is the traditional Australian way to pay cash in hand which has resulted in some small businesses hiding their income.

“It certainly is something that we have seen,” he said. Mr Quigley also said a high amount of claims increased in the construction industry and was the reason they have become the latest group to come under the microscope. “Higher claims seem to be emerging in the building, construction and labourers, construction supervisors and project managers as well as sales and marketing managers,” he said. “When there’s disturbing trends we really then do focus more on these particular industries or occupations.”

Last financial year GST compliance work including reviews and audits of small and medium businesses resulted in the ATO raising $587 million in GST liabilities. The ATO data-matches more than 640 million transactions each year from sources including banks, share registries, employers, merchants, states and territories and other government departments. Last year data and information matching raised $973 million in revenue adjustments from about 450,000 reviews and audits.

Mr Quigley also said some industries were at a higher risk o f not complying with superannuation guarantee obligations, including cafes and restaurants, carpentry services and real estate services.

He said they will be audited.

“These are industries that deal a lot in cash, especially when you talk about cafes and restaurants and it’s based on the trends we’ve seen,” Mr Quigley said.

“We investigate every complaint we get about employers not paying their employee’s superannuation guarantee entitlement.”

In the 2011-12 financial year the ATO transferred more than $275 million of employer super contributions to members accounts after compliance action and this year expects to contact around 19,500 employers as a result of these complaints.

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