IF you take cash, expect a letter. In the next year the Tax Office plans to send out 100,000 letters – 270 a day – to small businesses whose cash takings it has previously been unable to get a handle on.

 

This week it published a list of it’s “benchmarks” for 15 types of businesses that have largely escaped the crackdown on the cash economy because it was unable to estimate how much they should be taking.

 

It began the program with trades two years ago, publishing benchmarks for what tradespeople such as bricklayers should be taking based on their purchase of bricks.

 

The benchmarks use a different approach, targeting businesses such as clothing shop, florists and hairdressers, setting standards for what cash each business is likely to take over and above its credit and debit card sales.

 

Proclaimed in the Government Gazette this week is an order allowing the Tax Office to get debit and credit card data relating to 200,000 small businesses from banks including Westpac, the Commonwealth and the Bendigo and Adelaide Bank.

 

“We’ll have their sales by merchant card. We will compare that to the sales they report on their activity statements, and if the excess seems low we will send them a letter,” the senior assistant commissioner, Chris Barlow, said. We recognise that… shops selling haute couture have probably 80 per cent of sales by credit card, where as shops selling cheaper clothes probably 80 per cent of the sales will be in cash. We have a range of benchmarks based on turn over and the average sales price”

 

The beauty of the approach for the Tax Office is that the letters are sent out to only a proportion of non-conforming businesses but these will provide it with vital information.

 

“With the earlier benchmarks we found that those who had received the letter were 40 per cent more likely than those that had not to lift their cash reporting for the following year,” Mr Barlow said.

 

• Hairdressers
• Nail salons
• Coffee shops
• Florists
• Clothing
• Fruit & Veg
• Petrol Stations
• Milk Bars
• Butchers
• Hardware
• Nurseries
• Newsagents
• Pubs & Bars
• Restaurants
• Takeaway food shops

 It began the program with trades two years ago, publishing benchmarks for what tradespeople such as bricklayers should be taking based on their purchase of bricks.

 

The benchmarks use a different approach, targeting businesses such as clothing shop, florists and hairdressers, setting standards for what cash each business is likely to take over and above its credit and debit card sales.

 

Proclaimed in the Government Gazette this week is an order allowing the Tax Office to get debit and credit card data relating to 200,000 small businesses from banks including Westpac, the Commonwealth and the Bendigo and Adelaide Bank.

 

“We’ll have their sales by merchant card. We will compare that to the sales they report on their activity statements, and of the excess seems low we will send them a letter,” the senior assistant commissioner, Chris Barlow, said. We recognise that… shops selling haute couture have probable 80 per cent of sales by credit card, where as shops selling cheaper clothes probably have 80 per cent of the sales will be in cash. We have a range of benchmarks based on turn over and the average sales price”

 

The beauty of the approach for the Tax Office is that the letters are sent out to only a proportion of non-conforming businesses but these will provide it with vital information.

 

“With the earlier benchmarks we found that those who had received the letter were 40 per cent more likely than those that had that had not to lift their cash reporting for the following year,” Mr Barlow said.

 

• Hairdressers
• Nail salons
• Coffee shops
• Florists
• Clothing
• Fruit & Veg
• Petrol Stations
• Milk Bars
• Butchers
• Hardware
• Nurseries
• Newsagents
• Pubs & Bars
• Restaurants
• Takeaway food shops