ATO knuckles down on cash-only businesses

ATO assistant commissioner Peter Holt reiterated previous commentary from the ATO that cash is increasingly giving way to digital payment methods due to their convenience, and as such, businesses that operate solely in cash can actually be limiting their sales capacity.

“Outlets that demand cash from customers may also be missing out on business from customers as more and more people tend to prefer to pay electronically, even for small purchases like a takeaway coffee,” he told sister title My Business.

“We know that cafes, restaurants and fast food outlets do tend to deal in cash more than other types of businesses. Transacting in cash is a legitimate way of doing business, and some industries do take more cash than others.”

From a regulatory point of view, Mr Holt said that cash is also prone to errors and increases the temptation to try and avoid tax liabilities.

“When cash is used to deliberately hide income to avoid paying the correct amount of tax or superannuation, it’s not a level playing field,” he said.

“We also see businesses dealing in cash often have poor record-keeping practices that contribute to more mistakes.”

Mr Holt’s comments came off the back of an ongoing campaign of business visits by ATO inspectors, targeting black economy activities such as the use of cash to avoid tax and employment obligations.

The ATO has a goal of visiting up to 10,000 businesses during the current financial year, while also conducting education seminars for SMEs at each of the locations visited.