Protecting honest business
We know most business owners are honest and that running a business can be difficult.
Unfortunately, there are businesses that gain an unfair advantage by not meeting all their tax and superannuation obligations. We aim to protect honest businesses from this unfair competition by addressing shadow economy activities.
The shadow economy refers to both dishonest and criminal activities that take place outside of, or involve misuse or abuse of, the tax and regulatory systems. Examples of these activities include:
- not declaring all income
- over-reporting deductions
- demanding (or paying for) work cash in hand to avoid obligations
- other illegal activities, such as illicit tobacco, sham contracting and ABN fraud.
The shadow economy is a significant economic issue that affects all of us.
We work closely with industry associations, tax practitioners and businesses to understand any issues they may have. We use up-to-date third-party data and sophisticated risk analysis profiles to identify those who may need a bit more help and those who may not be doing the right thing. Where we are concerned that a business is deliberately doing the wrong thing, we have an obligation to the community to investigate further.
We are visiting businesses around Australia as part of this work. You can register for an information session to find out more about these visits. Depending on what we find during the visit, we may contact businesses at a later stage to follow up.
We've found that the community has less tolerance for unfair practices than it once did. If you see something, let us know by reporting a concern.
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Register for an information session
No sessions are currently scheduled at this time. Check back for upcoming information sessions.
Our business visits
Our visits are part of our approach to protect honest businesses from unfair competition by addressing shadow economy activities. In addition to helping businesses that need extra support, we are also dealing with those deliberately doing the wrong thing and getting an unfair advantage, so all businesses get a fair go. We work with businesses and industry associations along with local authorities like chambers of commerce and councils.
We will be talking to businesses about:
- record keeping and payment facilities, registrations, outstanding lodgments, tax debts, and employer obligations such as super
- how to fix mistakes
- the benefits of electronic record keeping and payment methods
- ATO tools and assistance products available for them
- any other help they may need.
Depending on what we find during the visit, we may contact businesses at a later stage to follow up (for example, through a phone call, letter or additional visit), and may undertake a review or an audit.
The areas we're visiting are considered to be higher risk. This could include:
- unreported or misrepresented sales
- omitted income, including missing payments and online transactions
- overstated expenses
- lack of record keeping knowledge (in terms of sales, expenses, staff, rosters and controls)
- discrepancies between activity statements and tax returns
- businesses that are operating outside the tax system
- when lifestyle and assets don't match up, like owning property and vehicles that they would need much higher incomes to cover
- businesses reporting outside of the business benchmarks
- not complying with employer obligations.
If businesses need or ask for help, we will help them get back on track as well as show them the ATO tools and information available to assist them. However, if we're concerned that a business is deliberately doing the wrong thing, we will investigate further and take any necessary action.
No matter what kind of business you have, you don’t need to be concerned if you're doing the right thing.
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Areas we've visited
From 1 July 2019, we have visited businesses in the areas of:
- QLD – Cooktown, Port Douglas, New Farm, Teneriffe, Fortitude Valley and Newstead
- NSW – Port Macquarie, Wauchope, Hornsby, Bathurst, Bankstown, Bega and Hornsby
- VIC – Healesville, Frankston and Croydon
- WA – Broome, Cable Beach, Derby and Kununurra
- NT – Darwin.
If you've made a mistake
If you realise you've made a mistake, or left something out, it's better to talk to us as soon as possible – for example, if you:
- haven't told us about income you have earned, including cash payments
- claimed deductions you weren't entitled to
- made any other statement to us that was false or misleading.
We may reduce the penalties that apply if you come to us first.
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Making a tip-off
If you know or suspect phoenix, tax evasion or shadow economy activity, you should report it to us.
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