Many small businesses may be unaware that the Australian Tax Office can access data direct from the bank regarding their credit and debit card sales. The use of computerised data-matching to information reported on activity statements allows the ATO to determine your businesses cash sales.

Late last year the ATO released a new category of industry specific small business benchmarks focusing on cash sales. These benchmarks establish what level of cash sales the Tax Office believes a business should be making. These benchmarks will be used by the ATO to identify businesses that are not reporting as much cash income as others in the same industry.

The cash sales benchmarks have initially been released for 15 industries:

• Restaurants
• Coffee shops
• Takeaway food services
• Newsagents
• Hairdressers
• Beauty services
• Clothing retailing
• Florists
• Pubs, taverns and bars
• Grocery retailing and general stores
• Fruit and vegetable retailing
• Meat retailing and butchers
• Fuel retailing
• Hardware and building supplies
• Garden supplies retailing

Cash sales benchmarks for additional industries will doubtless follow.

A business whose cash sales fall significantly outside the benchmarks can expect contact from the ATO. Although a business may have a good reason for reporting outside the benchmarks, as always when dealing with the ATO the onus remains on the taxpayer to prove their innocence. Good and complete record keeping is essential for a business to minimize the time and cost in dealing with the ATO in these matters.

If you have any concerns regarding the level of cash sales reported by your business, Taggart Partners can review your business figures against the ATO benchmarks. If you would like a review, or require any further information, please do not hesitate to contact our office.