Last year the ATO placed a great deal of scrutiny on businesses that operate with a lot of cash transactions.
The result was a series of random visits by the ATO and audits of businesses across Australia.
The ATO have reported 11,000 business audits conducted last financial year, about seven out of 10 businesses were forced to increase the amount of tax they needed to pay.
The ATO say their aim is to combat the Black Economy but they’re not out to get small businesses.
The ATO has highlighted that not all cash-only businesses are breaking the law, and a business can legitimately run cash-only operations, they just have to follow some pretty simple rules.
Your Accountant will tell you record-keeping is at the core of running a legitimate cash business. If your actual income doesn’t match up with the data that you’ve sent to the ATO when they come knocking, you could be in a bit of trouble.
After record-keeping, you need to make sure you have all your registrations in-place. The standard registrations that any business will need are things like an ABN (or ACN) and registering for GST.