The Australian Taxation Office (ATO) has released a new set of updated financial benchmarks to help small-business owners do a health check on their business
Updated annually, the ATO’s benchmarks allow small-business owners to compare their performance based on metrics such as average expenses against other businesses in the same industry.
The updated benchmarks cover 100 industries and over 2 million small businesses around the country. The industries include Accommodation and food; Building and construction trade services; Education, training, recreation and support services; Health care and personal services; Manufacturing; Retail trade; and Transport, postal and warehousing.
“The benchmarks are a valuable tool for small businesses wanting to stay in good financial health,” said ATO Assistant Commissioner Tony Goding. “Think of our benchmarks like a routine test you take with your GP each year. These can help small businesses diagnose their strengths or spot the early warning signs.”
Goding added, “The benchmarks can help you see how your business stacks up. If your numbers are outside of the benchmark range compared to others in your industry it may be time for a closer look at your business plan.”
The ATO also clarified that it does not use the benchmarks in isolation. However, if small businesses find themselves falling outside the ATO’s benchmarks, they are more likely to trigger a closer examination by the office to determine if they have made mistakes or deliberately committed an unlawful act such as tax evasion.
In relation to this, the ATO has reiterated its zero tolerance towards non-compliance as small businesses that are avoiding their tax obligations are considered to be part of the shadow economy which accounts for nearly 60 per cent of the gross small-business income tax gap or around $11.2 billion per annum in missing tax.
“It’s all about levelling the playing field for honest businesses who are being undercut by their dishonest competitors that aren’t paying the tax they’re supposed to,” Goding said.
The benchmarks are accessible on the ATO website and via the ATO app business performance check tool. The key benchmark ratios can also be downloaded from data.gov.au.
