The Tax Office, the cash economy and benchmarks

One of the Tax Office’s new weapons against the cash economy is its industry benchmarks.

These benchmarks set out the expected income and expenses of small, medium and large businesses, most of which operate in the cash economy.  

The ATO now has over 100 benchmarks and this year is ramping up its attack against the cash economy by issuing  about 100,000 letters. 

The letters basically question why the figures returned by taxpayers in their income tax returns do not fit the industry average.

The ATO expects that after the 100,000 questionnaires are issued, about 3,000 – 4,000 audits will be conducted.