The ATO is watching: Credit and Debit Card Data

Written on the 13 January 2012 by Macmillans Waller Fry - Accountants

The ATO has ramped up its credit and debit card supervision and matching program. This information is designed to identify taxpayers who may be participating in the cash economy and not complying with their tax obligations.

What the ATO does

Data is acquired from banks that identify credit and debit card sales made by Australian businesses. This data is then matched against taxpayer records to identify those participating in the cash economy, and who are potentially leaving out some or all of their cash takings or in other ways not reporting all of their income.  

This matching program identifies transactions conducted for all merchants with a turnover of less than $10 million in the 2010 -11 financial year.

The ATO has revealed that it has obtained data from the following banks:

• American Express Australia Limited
• Australia and New Zealand Banking Group Limited
• Bank of Queensland Limited
• Bendigo and Adelaide Bank Limited
• BWA Merchant Services Pty Ltd
• Commonwealth Bank of Australia
• Diners Club Australia
• National Australia Bank Limited
• St George Bank, and
• Westpac Banking Corporation.

 

How the data is used

This bank data is used by the ATO to improve compliance with tax obligations by:

Identifying businesses that:

• are not reporting any or all of their income, or
• may be running a part of their business off-the-books or operating underground by avoiding their obligations to register and lodge returns, and
• obtaining intelligence to increase its understanding of the behaviours and compliance profile of businesses in receipt of credit and debit card income, and to improve fraud detection models.

 

Taxpayers that have been identified as being at risk of potentially leaving out some or all of their cash takings, running part of their business off-the-books, or in other ways not reporting all of their income, should contact the ATO to make a voluntary disclosure of any under-reported amounts.

In cases where taxpayers do not disclose under-reported amounts, the ATO may take other appropriate action, such as consideration for default assessments of a business’s tax liabilities.