Update on the small business benchmarks
In a recent speech, the Tax Commissioner remarked that the ATO has found that approximately 90% of businesses in benchmarked industries fall within a benchmark ratio.
On the other hand, 76,000 businesses nationally reported income that is significantly below the benchmarks.
In addressing this in 2010/11, the ATO wrote to around 30,000 businesses and, of these businesses, 17% have since started reporting income commensurate with the benchmarks.
The ATO says that this means over 5,000 businesses have now lowered their risk profile and may be less likely to be subject to audit.
The plastering and café industries have been selected for review as part of the ATO’s 2012/13 Compliance Program in response to benchmark performance, referrals and expectations of the public, and from historical trends.