ATO withdraws cash sales benchmarks

The ATO’s cash sales benchmarks, for the 2009 year, released in November 2010 have been withdrawn from use.

The cash sales benchmarks, covering fifteen industries, are a part of the Austrlaian tax Office’s comprehensive suite of small business benchmarks across 107 industries that they use to identify and deter activities in the cash economy.

The ATO claims it is on a small part of their complance activity and is just one tool that they use in the course of our compliance activities with our key focus remaining on evidence of businesses declaring all income through appropriate record keeping.

Cheryl-Lea Field, Deputy Commissioner, Tax Practitioner and Lodgment Strategy, advised tax agents this week that “We only raise assessments based on cash sales benchmarks when there are inadequate or no records to substantiate their declared income.”

Cash sales benchmarks identify the expected ratio of cash sales to total sales and are based on credit and debit card sales data provided by financial institutions, as well as information provided by small businesses on activity statements.

A review of the data used to calculate the cash sales benchmarks has identified inconsistencies in the way in which cash-outs paid by businesses to their customers were recorded. (An example of cash-out is when a customer requests additional cash when purchasing goods or services.) Accordingly, the ATO believes it is appropriate to withdraw the cash sales benchmarks at this stage. The ATO is refreshing the data used to calculate these benchmarks and will release updated cash sales benchmarks for 2010 later this year.

The 15 industries covered are:

  • Beauty services
  • Fuel retailing
  • Meat retailing and butchers
  • Clothing retailing
  • Garden supplies retailing
  • Newsagents
  • Coffee shops
  • Grocery retailing and general stores
  • Pubs, taverns and bars
  • Florists
  • Hair dressers
  • Restaurants
  • Fruit and vegetable retailing
  • Hardware and building supplies retailing
  • Takeaway food services