ATO Audit Hot Spots

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The ATO have completed more audits in the following areas than any other year, as the ATO are collecting more data:

Small Business Benchmarks

Small business benchmarks are a guide to help you compare your business’s performance against similar businesses in the same industry. The ATO has an app tool, which is the easiest way to see how your business compares to competitors. If you enter all your data into the app tool and you are outside the range it is best to contact your accountant to discuss.


The ATO will audit your GST, if your GST refund appears to be out of the ordinary or large. The ATO are checking for fraudulent claims, therefore keeping documentation is important or your claim could be rejected. Please note that if you are in business, then you are not required to keep a receipt if your purchase is less than $82.50 including GST.

Payroll tax

Depending on which State you are in, there are different thresholds for payroll tax. It is important to regularly check if you are close to the threshold for payroll tax in your State. The major area of concern is that subcontractors & contractors are not included on the payroll tax threshold. Each business needs to make an assessment and decide whether a subcontractor or contractor is deemed an employee or not. If they are deemed to be an employee, you need to ensure that super has been paid and included on any payroll tax calculations.

Work Related Expenses

If you have large claims for work related expenses, then you will need documentation for each claim. Please note that a bank statement showing the amount of the expense is not sufficient for the ATO audit, they will require actual invoices.

Related:  North Sydney Small Business Update: Workplace Compliance and New Developments

The main areas to be aware of are:

  • Laundry for clothing (need dry cleaning receipts or proof that you use protective clothing)
  • Travel (need to have a travel diary)
  • Telephone (need to have a 4-week log book)
  • Motor Vehicle claims (need to be able to substantiate kilometres travelled)
  • Transport of bulky tools (need to ensure that there is no safe place to keep at work)

If you would like to know more about audit, you can click here to know more about Chan & Naylor services. You can leave your details here and we can schedule you for a free consultation. We’ll contact you to explain more.

Whether you are a beginner, seasoned investor or business owner, our property and business tax accountants can give you guidance to maximise the financial areas of your life. We can also give you an integrated and tailored solution of your superannuation, taxation, property investment, asset protection, estate planning and more.

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