While most small businesses do the right thing, we continue to see cases where some don't. We're stepping up our compliance action against those that:
- omit income, including failing to report cash income
- over-claim expenses and GST credits
- use business income to pay for private expenses.
These behaviours undermine public trust, reduce funding for essential services like hospitals, schools and roads, and create an unfair advantage over businesses that meet their obligations.
Avoid common errors
Common errors we see include:
- not reporting all business income, including cash sales and contractor income
- paying workers in cash to avoid tax and super obligations
- claiming private expenses as business deductions, or incorrectly claiming GST credits
- using business bank accounts, credit cards or assets for private expenses.
- failing to keep accurate records of business transactions.
The cost of getting it wrong
Using sophisticated data, analytics and third-party information, we can identify businesses that aren't reporting correctly. Since July 2025, we’ve engaged with more than 17,000 small businesses where there were signs of omitted income, leading to close to $3 million in amended tax liabilities.
In 2025–26, our audits uncovered more than $210 million in unpaid taxes. We also issued more than $50 million in penalties to businesses that deliberately omitted or under-reported income, such as cash payments.
How to get it right
- report all business income, including cash receipts
- keep business and personal finances separate
- claim business deductions and GST credits you're entitled to
- keep accurate records and use digital tools where possible.
Support for your small business
Use our online learning coursesExternal Link and small business benchmarks to help keep your small business on track. For more information, visit Our focus areas for small business. You can also speak with a registered tax practitioner.
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