Small Business Benchmarks

Let us help keep your business out of the ATO's view!

Through a combination of advanced data matching and small business benchmarking the ATO is working harder than ever to unveil those small businesses that are participating in the cash economy. The ATO have released more than 70 industry benchmarks for a wide range of business activities. These benchmarks will be used by the ATO and will identify those businesses engaging in the cash economy. More than 100,000 small businesses suspected of operating in the cash economy will be contacted this year.

But dont panic! We can help you. Contact us on 03 9746 6479 to make sure your business is not on the target list!

What are the Small Business Benchmarks?

The small business benchmarks analyse the performance of small business including sales, turnover, profit and the value of the various business inputs and costs including materials, wages, equipment. From this data a series of guidelines have been developed to help both the ATO and small business to measure their performance against the benchmarks.

The following types of benchmarks have been developed for the small business sector:

Performance benchmarks: key business ratios for various industries

Cash sales benchmarks: comparing the ratio of cash sales to total sales for various industries

Input benchmarks: show an expected range of income for tradespeople based on the labour and materials they use.

Small businesses whose performance fall significantly outside the one or more of the ATO small business benchmarks is very likely to be selected for a review or audit.

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What is the purpose of the Small Business Benchmarks?

• To gauge the performance of your business against other business within your industry
• To ensure that tax obligations are being met and that all transactions (especially cash) are being recorded
• To assist the ATO in identifying businesses that are possibly avoiding tax and determine selection for audit or review.

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Are the Small Business Benchmarks simply a guide?

Yes, the business benchmarks are essentially a guide and there may be valid reasons for a business to be reporting data that falls outside of the stipulated benchmarks. But be warned - any variation in data will more than likely present your business as a likely candidate for a tax office audit. The ATO considers that notable differences will shed light on those businesses that are not recording and paying tax on all transactions – particularly cash transactions!

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How does the ATO collect data about my business?

The ATO will gather information about your small business via:

• Information reported on Activity Statements
• Information lodged in Tax Returns, and
• Data matching undertaken with banks to identify credit and debit card sales

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How can my business reduce the risk of an ATO review or audit?

Ensure that your record-keeping and bookkeeping practices are accurate and up-to-date

Ensure that your business activity statements have been carefully review for errors and omissions prior to lodgement.

Allow us at Platinum Accounting & Taxation to review your records and analyse your business performance against the small business benchmarks.

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Which small businesses are subject to the Small Business Benchmarks?

More than 70 industries have been benchmarked including:

Archictects | Automotive Electrical | Bakeries | Barber and men's hairdressing | Beauty Services | Bricklaying | Butchers | Cabinet makers | Cake shops & patisseries | Carpentry | Caterers | Chicken Shops | Chiropractic and Osteopathic services | Clothing retailing | Coffee Shops | Computer Retailing | Couriers | Concreting | Cement Rendering | Dentists | Discount and variety stores | Driving schools | Electrical Services | Fence construction | Fish and chips shops | Florists | Footware retailing | Fruit and vegetable retailing | Fuel retailing | Furniture removalists | Garden supplies retailing | Gift stores | Glazing services | Hairdressers | Health food retailing | Ice cream retailing | Jewellers | Kebab shops | Meat retailing | Motor vehicle parts retailing | Nail salons | Painting services | Pest control services | Plasterers and plastering | Plumbing services | Pubs and bars | Restaurants | Roofing | Takeaway food services | Pizza shops | Taxi drivers | Tutoring and coaching | Tyre retailing | Veterinary services

If your business falls into any of the industries listed here, we are very experienced with these industries and are well placed to assist you in complying with the ATO's small business benchmarks. Contact us on 03 9746 6479 for more information.

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