An interesting tax avoidance scam has been uncovered recently, involving thousands of tradesmen around Australia and hardware chain Bunnings Warehouse. Because of the amount of cash transactions that occur in the trade industry, a large number of these service providers have been able to circumvent the tax system.
Large amounts of contract workers in Australia have been able to beat the system by replacing their own ABN number with Bunnings ABN number on invoices, making the transactions untraceable to their actual recipients. This has created a black economy of sorts for tradesmen as a result of the large amount of unaccounted for payments. Paul Drum, a member of the government’s national tax liaison group has responded to this issue, proposing that the Government implements a system “to make sure we can verify ABNs on a real-time basis”. This new system would ensure that all contractor transactions are accounted for in real time, eliminating the possibility of contractors escaping tax payments and ensuring the Government does not lose out on hundreds of millions of dollars.
Understanding Your Tax Obligations
If there is a chance that you are not fully aware of all of your tax obligations, there are a range of online guides that can help you. The ATO website has a comprehensive guide to what payments need to be reported each year, including details about businesses in building and construction. We recommend giving the website a look by clicking here, as it is a valuable resource designed to help you make sure that you are fulfilling your tax obligations. As always, you are welcome to contact one of our taxation experts on (07) 3367-0852 if there are any further questions you had regarding your tax planning options. We would love to hear from you!