The problem with ATO newsagency business benchmarks continues

Another newsagent is being audited by the ATO as their ratios fall outside the ATO published benchmark. The problem is, the newsagent has not done anything wrong. They have not under reported income, employed people off the books or done anything to warrant the audit. Their only ‘crime’ is submitting end of financial year numbers that do not fit the ATO narrow model.

This poor business is now penalised with an expensive audit – for which the ATO will offer no compensation, even when they find the business has done nothing wrong.

It is appalling the ATO sets its benchmarks without reasonable industry consultation and triggers an audit without justification other than a comparison with their benchmarks.

An ATO audit of a business that has not done anything wrong is a further tax on the target business. For a small business using external accounting services the cost can be considerable. This is why I say the ATO ought to refund the real cost of complying with the audit request, so the ATO is financially responsible for its actions.

If they ATO had to pay for wasteful audits it might be encouraged to revisit its benchmarks and thereby trigger less unwarranted audits.

The problem with thenATO is they do not engage on any rinsable level when you try and discuss anything like this with them. They are your worst nightmare government bureaucracy. There is no consideration that they have done anything wrong and always a presumption of guilt, especially when it comes to small business.

I urge newsagents to read through the entire benchmark page and see whether you fit within the ATO expectations.