As a push to bring in extra revenue for the government, the Australian Taxation Office (ATO) is focusing its resources on certain sectors of the economy that are seen as hotbeds of tax non-compliance.
The hair and beauty sector has been targeted for particularly close attention, as many of these are cash-only businesses and the industry has the third highest number of reports about potential tax evasion.
It is typical in cash-only businesses, that the ATO will find under-reporting of takings leading to the failure of paying the right amount of income tax and GST. On top of this, many cash-only businesses are failing to account for tax and superannuation properly on their employees’ wages.
Cash-only business will be put on the ATO’s radar, but if all takings are properly recorded, purchases are substantiated and payments to directors and staff are correctly documented and taxed, business owners should be able to deal quickly and efficiently with any questions that may come their way.
The best advice for any hair and beauty businesses in particular is to get regular help from their accountant to ensure they stay compliant with the law.