The ATO benchmarks your clients, why don’t you?

Jun 10th, 2011

The Australian Taxation Office (ATO) has created benchmarks to assist small businesses with business improvement and to identify businesses that may be avoiding their tax obligations by not reporting some or all of their income. The new main target of the ATO benchmarks is the cash economy of Australia, making it harder for businesses to get away with not reporting cash transactions. The ATO has undertaken data matching with banks to identify credit card and debit card sales, as well as information provided by small businesses to the ATO on activity statements.

In 2010 many accountants received at least one letter from the ATO relating to a company or partnership submission. As the ATO only use one ANZSIC code for the main entity (if there are multiple entities underneath the major entity with different ANZSIC codes), subsidiary businesses are not always assessed under a different ANZSIC code. From all reports this type of scenario has triggered a response from the ATO. This incorrect listing may also be impacting the data received and compiled/analysed by the ATO and should be considered when using the ATO benchmarks.

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