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wilsonstheman

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Hey guys,
just after some advice. I've just started my own business. I get paid mostly in cash. I've been told not to declare the cash jobs so that i dont have to pay as much income tax, and ive been told not to put the cash into my bank account as if the ATO see's it i can get penalised.

I dont like having heaps of cash laying around the house tho!

Are they really that bad , will they want an explanation for all the money going into my account?
Can i just say i had a good day at the casino?

Thanks! Ryan
 
wilsonstheman said:
Hey guys,
just after some advice. I've just started my own business. I get paid mostly in cash. I've been told not to declare the cash jobs so that i dont have to pay as much income tax, and ive been told not to put the cash into my bank account as if the ATO see's it i can get penalised.

I dont like having heaps of cash laying around the house tho!

Are they really that bad , will they want an explanation for all the money going into my account?
Can i just say i had a good day at the casino?

Thanks! Ryan
Click to expand...

Do you play poker at Burswood?

Well now you do. ;)


Maybe get a lockbox at the bank.
 

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The ATO are not dummies. If you work in an industry that mainly pays in cash (and it is your main income source) then the ATO will expect to see cash deposits going thru your bank accounts or being declared. If you appear to be living beyond your means you can be sure that it will stick out like dogs balls.
 
The ATO will often find out, if not now, but some years down the track. They have their ways of cracking down on these cash jobs, and some of them you won't believe. Now that the banks & the ATO have a closer relationship, even the little bit of interest people don't declare on their ITRs are being found out.

It's all good and well not declaring the correct earnings for the year. You may not get caught. But if you do, expect to pay the correct tax you didn't pay, a fine for not declaring correctly, and general interest charges on both the tax you didn't pay and the fine as well.
 
Some people have paid there groceries in cash but this stands out after a while.
The only thing that wont raise suspicion would be wine consumption,restraunts,entertainment paid in cash or some other hobby.
Minor renovating of house
Cash taken on holidays
 
Does the ATO have to prove where the cash came from though ? Surely if they couldnt prove it was from work they couldnt do anything?
 
You could do the right thing, declare the cash income and pay tax. Why not contribute to the society you live in and which provides the framework to earn a living and have a lifestyle that is the envy of 99.9999% of the worlds population?
 
wilsonstheman said:
Does the ATO have to prove where the cash came from though ? Surely if they couldnt prove it was from work they couldnt do anything?
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Cash doesn't just magically appear. The gambling line just won't cut it and I'm pretty sure there is no onus on them to prove anything.
 
thanks fellas just after advice.
simpleton if our goverment used it for things we need, and not spent it on crap such as the baby bonus etc i wouldnt hesitate
 

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Most of the ATO's information, or at least suspicion comes from people dobbing you in. Especially where employees leave the business on bad terms. So be careful there.

Besides, if your business is properly registered you are under more scrutiny aren't you? Why aren't you getting any income?
 
wilsonstheman said:
simpleton if our goverment used it for things we need, and not spent it on crap such as the baby bonus etc i wouldnt hesitate
Click to expand...

Somehow I doubt it, this is just a rationalisation for not wanting to pay taxes for mostly self-interested reasons (ie personal gain of money). You're happy for everyone else to pay taxes from which you benefit (roads, hospitals, schools etc etc)?

It is just like file sharers saying "I would pay if music cost less" or "the music industry is a rip-off" when basically they just don't want to pay. Even if their complaints were met they, like you, would find other justifications for not paying.
 
wilsonstheman said:
thanks fellas just after advice.
simpleton if our goverment used it for things we need, and not spent it on crap such as the baby bonus etc i wouldnt hesitate
Click to expand...

You do realise the basic reasoning behind this don't you? Or is this the reason you are working cash jobs....

Ever wondered why the "retirement" age keeps going up? Because theres not enough younger people working to support the older folk in the most basic of terms... So when you get old and want some help out from the government... don't expect to be retiring if their isn't the population to cover it...

Basically as the average age gets older, and the requirements more (rising costs, pensioners need more to survive) it makes it harder for the government to get this money. Them throwing $3k or whatever at some women to open her legs and populate Australia is peanuts compared the amount the government can reap back in taxes etc when that baby becomes an adult, plus all the skills shortages and women staying in the workforce instead of being stay at home mums etc.
 
STFUJEFF said:
The only thing that wont raise suspicion would be wine consumption,restraunts,entertainment paid in cash or some other hobby.
Minor renovating of house
Cash taken on holidays
Click to expand...

To a certain extent, I would disagree with this comment. Whilst you can write off a certain amount to these things, if everything was going under these expense items the ATO would be suspicious. A major expense being entertainment? No way would you get away with that. Also, a hobby and minor renovations of a house cannot be declared as business expenditure unless it were contributing to the practices of the business.

wilsonstheman said:
Does the ATO have to prove where the cash came from though ? Surely if they couldnt prove it was from work they couldnt do anything?
Click to expand...

There becomes a point where the ATO would start to investigate if cash magically appeared, much the same as Centrelink do, especially if it were a regular occurrence. The ATO aren't stupid, and they can have access to financial data when required, so if they suspect something is a-miss, they'll investigate you. And that's when the onus comes onto you to prove where the income has derived from, especially if you own your own business.

Jabso said:
Most of the ATO's information, or at least suspicion comes from people dobbing you in. Especially where employees leave the business on bad terms. So be careful there.
Click to expand...

I'd say on a certain percentage of ATO investigations are initiated by people dobbing a business owner in. The majority comes from inconsistencies in your income tax returns and business activity statements (if applicable). This is the ATO's main source of information and they select certain types of business activities to crack down on every year. It might just so happen that they type of business the OP is running might be selected down the track and if the ATO smell anything dodgy, they'll audit the business and require the owner to pay whatever taxes, fines & general interest charges that may apply.

Jabso said:
Besides, if your business is properly registered you are under more scrutiny aren't you? Why aren't you getting any income?
Click to expand...

This is correct. I'd be more careful of doing these types of cash jobs if the business is registered properly with an ABN & registered for GST (which you are not required to do so if you have business turnover - income, not profit - of less than $75,000). The magnifying glass is applied more regularly and at a higher intensity with these types of businesses.
 
ben cats fan I think I can recall a statistic saying that the majority of non-high income invididuals are caught after being dobbed in, unless I got it second hand and assumed it was true.

I have studied the ATO and they publicly declare they put most of their resources in going after the big boys, the people that will lead them towards uncovering a tax evasion ring, i.e. people that are costing the government the most. Like ben said they also pick a certain industry to go after each year too.
 

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How many times do you drive into a carpark and pay cash and get no receipt? The money could go staight into their pocket for all we know.

Money for nothing, but your chicks are not free.
 
ben_cats_fan said:
To a certain extent, I would disagree with this comment. Whilst you can write off a certain amount to these things, if everything was going under these expense items the ATO would be suspicious. A major expense being entertainment? No way would you get away with that. Also, a hobby and minor renovations of a house cannot be declared as business expenditure unless it were contributing to the practices of the business.
Click to expand...
I didnt say majority
I didnt say claim entertainment or renovation just use cash to pay for it.
If you drink a $20 dollar bottle of wine a night and bought it with cash who would know if you did or didnt.
You cant run everything through as cash as there is modelling for all businesses.
GST realy drove the cash economy
In the country, you dont have cash you cant get anything done.
Have you seen when you walk into a Motel how they always fill out the book in pencil.
Went to look at a Sand Blasting Bussiness, the guy was telling me how he just changed his accounting software in order to hide the amount of stock so he could sell more for cash.
This was a Multi million dollar business,imagine how much wine he drinks.
 

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