The tax office has been collecting building industry data as part of their pilot building industry suppliers data-matching project to identify and address non-compliance with tax obligations.

Data obtained for the building services industry data-matching program includes:

  • complaints information – to assist us in identifying knowledge and information gaps within the industry where education could promote more complaint behaviour
  • licensing information
  • purchase information from building industry suppliers.

Data matching is one of the main indicators the ATO uses to detect businesses participating in the cash economy.

 

How the ATO collects the data

The ATO has obtained details of individuals or businesses that hold a trade account with purchases between $10,000 and $3 million in the 2009-10 financial year from a major Australian warehouse chain.

They have also obtained complaints and/or licensing information for the 2009-10 and 2010-11 financial years from:

  • New South Wales Fair Trading
  • the Queensland Building Services Authority
  • the Government of South Australia, Consumer and Business Services.

How the ATO uses the data

Building industry data is being used to pilot the approach of using supplier data to identify businesses in the building industry who use cash transactions to avoid their tax obligations or who fail to report some or all cash transactions.

The data is used to identify:

  • individuals and businesses that may be running a part of their normal business activities off the books or operating underground by avoiding their obligations to register and lodge returns, particularly in relation to transactions between consumers and business
  • risks and trends of non-compliant behaviour by individuals and businesses that operate in the building services industry.

Where they identify taxpayers that appear to have not declared all, or part, of their income the ATO will either:

  • write to them asking them to explain the inconsistency and offering them the opportunity to make a voluntary disclosure
  • contact them directly through our audit area.

In cases where individuals or businesses fail to comply with their obligations – even after being reminded of them – other actions may be appropriate, including default assessments of tax liabilities.