True Tally Bookkeeping

April 2026

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GST, Uncategorized

ATO Cracks Down on Small Business Tax Evasion, Targets ‘Unexplained Wealth’

Leave a Comment / GST, Uncategorized /

The Australian Taxation Office (ATO) is intensifying its focus on small business tax compliance, with a particular emphasis on “unexplained wealth” and undeclared income. This strategic shift aims to address the significant “tax gap” and ensure fairer contributions from businesses across the country. The ATO is leveraging advanced technology, including artificial intelligence, to identify discrepancies and non-compliance. Key Takeaways The ATO is prioritizing the detection of “unexplained wealth” among small business owners. Increased scrutiny on undeclared income, particularly from cash-based businesses. New AI tools are being deployed to identify potential tax evasion and non-compliance. Payday superannuation reforms are being implemented, with a checklist to assist businesses. A vulnerability framework is in place to ensure empathetic treatment for taxpayers facing hardship. Targeting Unexplained Wealth and Undeclared Income ATO Commissioner Chris Jordan has identified “unexplained wealth or lifestyle for individuals and small businesses” as a top priority. The tax office is utilizing social media and other data-matching techniques to identify individuals whose reported income does not align with their displayed lifestyle. This includes monitoring for undeclared income, especially from cash-only businesses, and ensuring private expenses are not incorrectly claimed as business deductions. The ATO is also focusing on instances of unpaid superannuation and the misrepresentation of income by contractors. Leveraging Technology for Compliance An audit revealed that the ATO employs numerous AI tools to enhance tax compliance among small businesses. These tools assist in identifying omitted income in the “black economy,” assessing the accuracy of tax agent reporting, and flagging potential understatements of income or overstatements of deductible expenses. AI models are used to support decision-making, with “nudge” messages prompting taxpayers to review their figures. While AI does not make fully automated decisions, it plays a crucial role in identifying areas of concern. Payday Superannuation Reforms In a significant shift, employers will now be required to pay superannuation guarantee payments at the same time they process regular salary and wages, starting from July 1. The ATO has released a checklist to guide small businesses through this transition, emphasizing the need to review cashflow management and payroll systems. While the ATO acknowledges potential challenges, it encourages proactive preparation to avoid compliance issues. A Framework for Vulnerable Taxpayers The ATO has also introduced a vulnerability framework to ensure fairer and more empathetic treatment for small businesses and individuals experiencing hardship. This framework broadens the definition of vulnerability to include social, economic, and health-related factors. While it aims to provide tailored support and understanding, it does not waive tax obligations. The ATO will continue to use all available tools to collect outstanding debts while applying a nuanced approach to those facing genuine difficulties. Sources ATO commissioner says tax office will be targeting “unexplained wealth” of small business owners –SmartCompany, SmartCompany. New ATO checklist prepares small businesses for payday super, SmartCompany. ATO reveals hit list for businesses in 2025, SmartCompany. Audit reveals how the ATO uses AI to assess small business tax, SmartCompany. Small businesses included in ATO’s new vulnerability framework, SmartCompany.

Accounting, Payroll

Fair Work Commission abolishes junior pay rates for young adult employees

Leave a Comment / Accounting, Payroll /

Young adults working in retail, fast food and pharmacies are set to receive a pay rise, after a decision by the Fair Work Commission described as “up there with the introduction of equal pay for women in the 1970s”. The commission moved to abolish junior pay rates for young adult employees while maintaining them for minors, but the staged changes won’t come into effect until December. Hearing from more than 80 witnesses across the three industries, it determined that employees aged 18 to 20 should no longer be subject to “discounted” junior rates. Terri Butler, deputy president of the Fair Work Commission, said in making the decision, it considered whether there was any difference in the value of work performed by junior employees and other employees in the same classifications under the same awards. “We have been particularly interested in the extent to which junior rates serve or do not serve the interests of children and young people,” she said. “Young teenagers who are trying to get their first job usually wanting to balance work with secondary education, can benefit from being able to accept discount rates compared with older people doing the same job.” Terri Butler is the deputy president of the Fair Work Commission. (AAP: Darren England) It decided not to vary the rates for employees who are still minors under 16. “They are in a position of particular vulnerability and greater labour market disadvantage,” Ms Butler said. “We consider that, among the other matters we’ve taken into account, there are strong fairness reasons for allowing them to continue to accept discount rates, to get their start in the workplace, gaining valuable experience.” Under the changes, it is estimated around half a million workers will be eligible for the pay rise, according to ABS data.  The ruling addresses an application to vary junior rates under the General Retail Industry Award, the Fast Food Industry Award, and the Pharmacy Industry Award. There will be a phase-in period of up to four years and the first wage adjustments are scheduled to begin in December.  ‘Landmark decision‘ “Junior pay rates” applied to people below the age of 21, meaning 18-year-olds were paid 70 per cent of the award rate, 80 per cent for 19-year-olds and 90 per cent for 20-year-olds.  Under the commission’s ruling, the rate for 18-year-olds will increase by 5 per cent each year until 2029, bringing it in line with an adult wage. Larger businesses previously claimed the case would have a “totemic” impact to the structure of employment. Big employers like McDonald’s and Coles are often stepping stones to full-time employment, with Woolworths alone providing about one in eight Australians with their first job. Woolworths alone provides about one in eight Australians with their first job. (ABC News: Simon Tucci) Advocates have argued youth should be paid adult ages because you can enlist in armed forces at 17, and can vote, drive, drink alcohol and smoke from 18. National Secretary for the Shop, Distributive and Allied Employees Association (SDA) Gerard Dwyer said it was a “landmark decision, up there with the introduction of equal pay for women in the 1970s”. “It may take longer than we would have liked, but the principle has been established that no longer will 18-year-olds be treated as second class citizens,” he said. “Their work is as valuable as anyone else’s and before too long they will be paid accordingly.” The National Union of Students said when students were underpaid it directly impacted their ability to succeed at university. “This is a real win for young people. Ending junior rates means fairer pay for the work they’re already doing and takes some pressure off students balancing work and study,” National president Felix Hughes said.

Managing a Business

Fair Work Commission abolishes junior pay rates for young adult employees

Leave a Comment / Managing a Business /

Young adults working in retail, fast food and pharmacies are set to receive a pay rise, after a decision by the Fair Work Commission described as “up there with the introduction of equal pay for women in the 1970s”. The commission moved to abolish junior pay rates for young adult employees while maintaining them for minors, but the staged changes won’t come into effect until December. Hearing from more than 80 witnesses across the three industries, it determined that employees aged 18 to 20 should no longer be subject to “discounted” junior rates. Terri Butler, deputy president of the Fair Work Commission, said in making the decision, it considered whether there was any difference in the value of work performed by junior employees and other employees in the same classifications under the same awards. “We have been particularly interested in the extent to which junior rates serve or do not serve the interests of children and young people,” she said. “Young teenagers who are trying to get their first job usually wanting to balance work with secondary education, can benefit from being able to accept discount rates compared with older people doing the same job.” Terri Butler is the deputy president of the Fair Work Commission. (AAP: Darren England) It decided not to vary the rates for employees who are still minors under 16. “They are in a position of particular vulnerability and greater labour market disadvantage,” Ms Butler said. “We consider that, among the other matters we’ve taken into account, there are strong fairness reasons for allowing them to continue to accept discount rates, to get their start in the workplace, gaining valuable experience.” Under the changes, it is estimated around half a million workers will be eligible for the pay rise, according to ABS data.  The ruling addresses an application to vary junior rates under the General Retail Industry Award, the Fast Food Industry Award, and the Pharmacy Industry Award. There will be a phase-in period of up to four years and the first wage adjustments are scheduled to begin in December.  ‘Landmark decision‘ “Junior pay rates” applied to people below the age of 21, meaning 18-year-olds were paid 70 per cent of the award rate, 80 per cent for 19-year-olds and 90 per cent for 20-year-olds.  Under the commission’s ruling, the rate for 18-year-olds will increase by 5 per cent each year until 2029, bringing it in line with an adult wage. Larger businesses previously claimed the case would have a “totemic” impact to the structure of employment. Big employers like McDonald’s and Coles are often stepping stones to full-time employment, with Woolworths alone providing about one in eight Australians with their first job. Woolworths alone provides about one in eight Australians with their first job. (ABC News: Simon Tucci) Advocates have argued youth should be paid adult ages because you can enlist in armed forces at 17, and can vote, drive, drink alcohol and smoke from 18. National Secretary for the Shop, Distributive and Allied Employees Association (SDA) Gerard Dwyer said it was a “landmark decision, up there with the introduction of equal pay for women in the 1970s”. “It may take longer than we would have liked, but the principle has been established that no longer will 18-year-olds be treated as second class citizens,” he said. “Their work is as valuable as anyone else’s and before too long they will be paid accordingly.” The National Union of Students said when students were underpaid it directly impacted their ability to succeed at university. “This is a real win for young people. Ending junior rates means fairer pay for the work they’re already doing and takes some pressure off students balancing work and study,” National president Felix Hughes said.

Uncategorized

New Article

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Managing Financial Risk: A Guide for Allied Health & Trades Businesses For many health and trade businesses, bookkeeping is seen as a way to “stay square with the ATO.” However, international and Australian guidance now requires bookkeepers to use a Risk-Based Approach (RBA). This means your bookkeeper will be looking at your business through a lens of financial integrity and crime prevention. 1. Why the “Risk-Based Approach” Matters to You The RBA means your bookkeeper shouldn’t treat a solo mobile massage therapist the same way they treat a multi-state construction firm. They must assess the specific risks of your industry to decide how much “due diligence” (checking your ID and money sources) is required. For Allied Health: The focus is often on high-volume transactions, government funding (NDIS/Medicare), and third-party payments. For Trades: The focus is on large cash flow, high-value asset purchases, and complex subcontractor networks. 2. Industry-Specific Risks to Discuss with Your Bookkeeper A. Allied Health (NDIS Providers, Clinics, Specialists) Source of Funds: If your clinic suddenly receives large private payments from overseas for “wellness retreats” or “unspecified consultations,” your bookkeeper is now required to flag this. Third-Party Payments: A “red flag” occurs when a patient’s bill is paid by a company or person unrelated to the patient without a clear reason. Medicare/NDIS Fraud: Bookkeepers are being trained to spot “ghost billing” (charging for services not rendered), as this is a common way to “clean” illicit money through a legitimate business front. B. Trades & Construction (Builders, Sparkies, Plumbers) Cash Intensity: If your trade business handles significant cash (e.g., residential “cash jobs”), your bookkeeper must ensure these are banked and recorded. Discrepancies between your lifestyle and your declared business income are a major trigger. Supply Chain & Subbies: Paying “subcontractors” who don’t have an ABN, or whose bank accounts are in different names than their invoices, is a high-risk activity for money laundering. High-Value Assets: Using business funds to buy luxury vehicles or property that doesn’t align with the business’s actual profit is a key area of scrutiny. 3. What Your Bookkeeper Will Ask For (And Why) To comply with the new FATF-aligned standards, your bookkeeper will need more than just your receipts. Expect them to request: Proof of Identity (KYC): Not just for you, but for any “Beneficial Owners” (anyone who owns more than 25% of the company or trust). Explanation of “Outlier” Transactions: If you have a sudden spike in revenue or a weird refund request (e.g., a client pays $10k over, then asks for the refund to go to a different account), they must document the reason. Verification of Subcontractors: They may ask for more rigorous checking of your subbies’ credentials to ensure you aren’t accidentally facilitating a “labor hire” laundering scheme. 4. Red Flags: What Your Bookkeeper is Looking For The “Refund” Scam: A customer overpays by a large amount and asks for a refund to a different bank account. Complex Structures: Creating multiple trusts or companies for a simple 3-person plumbing business without a clear tax or legal reason. Unusual Urgency: Pressuring the bookkeeper to “just get the payment through” without following the usual verification steps. 5. The Benefit to Your Business While this feels like “more paperwork,” having a bookkeeper who follows this guidance protects you: Audit Readiness: You’ll be prepared for AUSTRAC or ATO reviews. Business Integrity: You ensure your “clean” business isn’t being used by others to hide “dirty” money. Professionalism: It signals to banks and lenders that your financial records are robust and trustworthy.

Uncategorized

New Article

Leave a Comment / Uncategorized /

Managing Financial Risk: A Guide for Allied Health & Trades Businesses For many health and trade businesses, bookkeeping is seen as a way to “stay square with the ATO.” However, international and Australian guidance now requires bookkeepers to use a Risk-Based Approach (RBA). This means your bookkeeper will be looking at your business through a lens of financial integrity and crime prevention. 1. Why the “Risk-Based Approach” Matters to You The RBA means your bookkeeper shouldn’t treat a solo mobile massage therapist the same way they treat a multi-state construction firm. They must assess the specific risks of your industry to decide how much “due diligence” (checking your ID and money sources) is required. For Allied Health: The focus is often on high-volume transactions, government funding (NDIS/Medicare), and third-party payments. For Trades: The focus is on large cash flow, high-value asset purchases, and complex subcontractor networks. 2. Industry-Specific Risks to Discuss with Your Bookkeeper A. Allied Health (NDIS Providers, Clinics, Specialists) Source of Funds: If your clinic suddenly receives large private payments from overseas for “wellness retreats” or “unspecified consultations,” your bookkeeper is now required to flag this. Third-Party Payments: A “red flag” occurs when a patient’s bill is paid by a company or person unrelated to the patient without a clear reason. Medicare/NDIS Fraud: Bookkeepers are being trained to spot “ghost billing” (charging for services not rendered), as this is a common way to “clean” illicit money through a legitimate business front. B. Trades & Construction (Builders, Sparkies, Plumbers) Cash Intensity: If your trade business handles significant cash (e.g., residential “cash jobs”), your bookkeeper must ensure these are banked and recorded. Discrepancies between your lifestyle and your declared business income are a major trigger. Supply Chain & Subbies: Paying “subcontractors” who don’t have an ABN, or whose bank accounts are in different names than their invoices, is a high-risk activity for money laundering. High-Value Assets: Using business funds to buy luxury vehicles or property that doesn’t align with the business’s actual profit is a key area of scrutiny. 3. What Your Bookkeeper Will Ask For (And Why) To comply with the new FATF-aligned standards, your bookkeeper will need more than just your receipts. Expect them to request: Proof of Identity (KYC): Not just for you, but for any “Beneficial Owners” (anyone who owns more than 25% of the company or trust). Explanation of “Outlier” Transactions: If you have a sudden spike in revenue or a weird refund request (e.g., a client pays $10k over, then asks for the refund to go to a different account), they must document the reason. Verification of Subcontractors: They may ask for more rigorous checking of your subbies’ credentials to ensure you aren’t accidentally facilitating a “labor hire” laundering scheme. 4. Red Flags: What Your Bookkeeper is Looking For The “Refund” Scam: A customer overpays by a large amount and asks for a refund to a different bank account. Complex Structures: Creating multiple trusts or companies for a simple 3-person plumbing business without a clear tax or legal reason. Unusual Urgency: Pressuring the bookkeeper to “just get the payment through” without following the usual verification steps. 5. The Benefit to Your Business While this feels like “more paperwork,” having a bookkeeper who follows this guidance protects you: Audit Readiness: You’ll be prepared for AUSTRAC or ATO reviews. Business Integrity: You ensure your “clean” business isn’t being used by others to hide “dirty” money. Professionalism: It signals to banks and lenders that your financial records are robust and trustworthy.