Friday, 6 December 2013
by Sonia Nair
The Tax Office has turned its sights to businesses in the hair and beauty industry, following its recent crackdown on the café and plastering industries.
The performance of the hair and beauty industry as a whole is summarised below:
- 2,140 businesses have three or more income tax returns outstanding
- 27,158 taxpayers within the industry lodged the 2012-13 income tax return, and 27% of these reported income greater than $75,000
- 34,689 businesses appear to be getting their tax right, but 18.5% of businesses in this industry are rated as higher risk according to the Tax Office’s omitted-income models, and
- 2,264 businesses are reporting more than 4% outside the key benchmark ratio established by information from members of the industry.
“We are working with this industry to better understand the cash controls and other businesses’ processes, so we can better identify the potential risks in both the franchised and non-franchised parts of the industry,” the Tax Office said in a statement.
“Initially, our focus is on providing help and education to the industry as well as encouraging taxpayers to meet their lodgement obligations. During this phase, we will work closely with industry associations, tax practitioners and businesses to understand how the industry works and how we can support a level-playing field.”
The Tax Office encouraged businesses to make their own self-corrections if they are concerned they have made a mistake in the past.
Businesses in the hair and beauty industry are considered those that offer:
- haircut and styling
- barber shop services
- beauty treatment services
- hair removal, depilatory and electrolysis services
- make-up services
- nail care services
- skincare services.
Conversely, the Tax Office said it would not target businesses engaged in providing medical skincare services – such as cosmetic surgery and dermatology services, or those that provide medical or surgical hair replacement or transplant services.
The revenue collection agency’s crackdown on the hair and beauty industry comes on the back of a similar move targeted towards the café and plastering industries in 2011-12. Read about it here
To access Taxpayers Australia's news archive, click here