The ATO has released new figures on its shadow economy work, and the headline number is a big one. According to a Yahoo Finance report published on 23 September, the ATO received 52,000 reports of unfair business practices in 2025-26, roughly 1,000 every week. Around 83 per cent were assessed as suitable for further review.

What the ATO is hearing about

The report says hospitality was a common source of tip-offs, with about 2,500 in the past financial year. Building and construction, and hairdressing and beauty services, were also commonly reported. The usual allegations were not declaring all income, cash in hand payments, not paying the correct super, under-reporting income and poor record keeping.

The ATO says tip-offs can be made anonymously, and that they can come from workers, customers, suppliers or competitors. It also shares information with partners such as the Fair Work Ombudsman. In its words, "there are eyes everywhere."

Why this matters even if you do the right thing

Most small business owners are not hiding anything. But a tip-off can still lead to questions, and the best answer is a clean paper trail. A simple mistake that sits in the books for years looks very different from one you found and fixed yourself.

A short self-check

  • All income is recorded. Card, cash, online and bank transfer sales should all reach your accounting software and your BAS.
  • Staff are paid properly. Check that every worker is on the payroll with correct pay, payslips and super, and that contractors really are contractors.
  • Lodgments are up to date. Overdue BAS, income tax returns and super obligations are the easiest things for the ATO to see.
  • Records are kept. Keep receipts, invoices, bank statements and payroll records so you can explain any figure.
  • Personal and business money is separate. Mixed transactions make your records harder to defend.

If you find a mistake

The ATO says that disclosing an error before it notifies you of a review or audit generally earns a bigger penalty reduction than waiting. For simple errors in a return or activity statement, you can often request an amendment instead. Either way, speak to your accountant or tax agent about the right way to fix it.

What to do this week

  • Spend 30 minutes reconciling takings against what you reported.
  • Check your payroll and super records for the first quarter of the 2026-27 year.
  • Book a catch-up with your accountant if anything looks out of place.

Getting your house in order now is far easier than doing it in response to a letter from the ATO.