ATO ramps up coffee shop crackdown

The taxman will check all coffee shops that purchase more than 15 kilograms of coffee beans per week to ensure they’re not skimming cash, in the latest crackdown on the cash economy.

The Australian Taxation Office has revealed it collects supplier data as part of a coffee suppliers data-matching project.

The data identifies businesses that have purchased a total of 15 kilograms of coffee or more, per week, in the 2009-10 and 2010-11 financial years.

“Data matching is one of the main indicators we use to detect businesses participating in the cash economy,” an ATO spokesperson says.

“Our objective is to promote a level playing field… by making it hard to get away with not reporting cash income.”

The ATO has already obtained coffee supplier data from major organisations including the suppliers of Segafredo, Vittoria Coffee, Piazza d’Oro, Douwe Egberts and Lavazza.

“We match the data we obtain against business records to identify businesses that may be participating in the cash economy by not declaring all of their income,” the spokesperson says.

“We will either write to them asking them to explain the inconsistency and offering them the opportunity to make a voluntary disclosure [or] contact them directly through our audit area.”

“Where businesses fail to comply with their obligations – even after being reminded of them – other actions may be appropriate, including default assessments of a business’s tax liabilities.”

The bean-buying information is the latest addition to the ATO’s vast stores of data, used to match more than 500 million transactions a year, from eBay sales to vehicle purchases.

ATO second commissioner Bruce Quigley has warned that with increasing sources of information, people are more likely to get caught and penalised if they fail to play by the rules.

The tax office has said it will check information from hardware stores, where people spent more than $10,000, stepping up its broadside against builders and sub-contractors.

It will also try to catch cash-trading builders using information from state licensing bodies.

For cafés, efforts follow the ATO’s controversial cash benchmarking practice focused on small businesses with unusually large profits.

While the inspector-general of taxation is reviewing the program, the Organisation for Economic Co-operation and Development has applauded it as one of the “more significant approaches” for innovation and impact.