Australia ▾
  Australia   New Zealand
Join Now

Home | Price List | Contact

Login
Forgot your password?
  • Trust

    Trust

    • Acknowledgement of Trust (already own asset) - $165
    • Change Appointor and/or Guardian of Family Trust - $110
    • Change of Name of Family Trust - $110
    • Change Trustee of Family Trust - $110
    • Dealing with Forgiven Debts (White Paper) - $55
    • Debt Recognition (including pre-Div 7A Loans) - $33
    • Declaration of Trust (before you buy) - $110
    • Div 7A Loan Agreement - $65
    • Div 7A Loan Agreement for UPE - $65
    • Family Trust - $165
    • Family Trust - Streaming & Bamford Update - $165
    • Family Trust - Update to Allow Change of Appointor and Guardian - $165
    • Family Trust - Update to allow Sole Trustee - $55
    • Family Trust - Update to Exclude Foreign Persons (NSW) - $198
    • Family Trust - Wind up/Vesting - $259
    • Forgiveness of Debt - $121
    • Opening Minutes for the Unit Trust - $33
    • Partnership Deed - $220
    • Release of Unpaid Trust Entitlement - $121
    • The new small business restructure roll-over rules in practice (White Paper) - $55
    • Trust Distribution Minutes Library for 2008/09 - $99
    • Trust Distribution Minutes Library for 2009/10 - $99
    • Trust Distribution Minutes Library for 2010/11 - $99
    • Trust Distribution Minutes Library for 2011/12 - $99
    • Trust Distribution Minutes Library for 2012/13 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2012/13 - Single-Use - $110
    • Trust Distribution Minutes Library for 2013/14 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2013/14 - Single-Use - $110
    • Trust Distribution Minutes Library for 2014/15 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2014/15 - Single-Use - $110
    • Trust Distribution Minutes Library for 2015/16 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2015/16 - Single-Use - $110
    • Trust Distribution Minutes Library for 2016/17 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2016/17 - Single-Use - $110
    • Trust Distribution Minutes Library for 2017/18 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2017/18 - Single-Use - $110
    • Trust Distribution Minutes Library for 2018/19 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2018/19 - Single-Use - $110
    • Trust Distribution Minutes Library for 2019/20 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2019/20 - Single-Use - $121
    • Trust Distribution Minutes Library for 2020/21 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2020/21 - Single-Use - $121
    • Trust Distribution Minutes Library for 2021/22 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2021/22 - Single-Use - $121
    • Trust Distribution Minutes Library for 2022/23 - Multi-Use - $363
    • Trust Distribution Minutes Library for 2022/23 - Single-Use - $132
    • Trust Distribution Minutes Library for 2023/24 - Multi-Use - $363
    • Trust Distribution Minutes Library for 2023/24 - Single-Use - $132
    • Trust Distribution Minutes Library for 2024/25 - Multi-Use - $363
    • Trust Distribution Minutes Library for 2024/25 - Single-Use - $132
    • Unit Trust - $165
    • Unit Trust - Add New Member Kit - $110
  • Superannuation

    Superannuation

    • Acknowledgement of Trust (already own asset) - $165
    • Commercial Lease - $275
    • Declaration of Trust (before you buy) - $110
    • Derivative Risk Statement for SMSF - $65
    • Investment Strategy for Self Managed Super 15/16 - $65
    • Investment Strategy for Self Managed Super 16/17 - $65
    • Investment Strategy for Self Managed Super 17/18 - $65
    • Investment Strategy for Self Managed Super 18/19 - $65
    • Investment Strategy for Self Managed Super 19/20 - $65
    • Investment Strategy for Self Managed Super 20/21 - $65
    • Investment Strategy for Self Managed Super 21/22 - $65
    • Investment Strategy for Self Managed Super 22/23 - $65
    • Investment Strategy for Self Managed Super 23/24 - $65
    • Investment Strategy for Self Managed Super 24/25 - $65
    • Pension Pack for Self Managed Super - $299
    • Product Disclosure Statement (general) - $66
    • Product Disclosure Statement (Pension only) - $99
    • Self Managed Superannuation Fund Deed - $165
    • SMSF - Minute to Appoint Administrator - $33
    • SMSF - Minute to Appoint an Auditor - $33
    • SMSF - Minute to Approve Financial Statements - $33
    • SMSF - Minute to Insure The Members - $33
    • SMSF - Update Rules - $165
    • SMSF Limited Recourse Borrowing Arrangement - $330
    • SMSF Restricted Commercial Property Assessment - $695
    • SMSF Restricted Residential Property Assessment - $315
    • Statutory Declaration - $0
  • Estate Planning

    Estate Planning

    • Codicil to change the Executor - $99
    • Confidentiality Agreement (Non Disclosure) - $99
    • Debt Recognition (including pre-Div 7A Loans) - $33
    • Enduring Power of Attorney - NSW - $55
    • Enduring Power of Attorney - SA - $55
    • Enduring Power of Attorney - WA - $55
    • Enduring Power of Attorney (Financial, Personal/Health) - QLD - $55
    • Enduring Power of Guardianship - NSW - $55
    • Enduring Power of Guardianship - WA - $55
    • Power Of Attorney By Company - $99
    • Will - Married or Defacto No Children - $95
    • Will - Married or Defacto with Children - $95
    • Will - Single No Children - $110
    • Will - Single With Children - $110
  • Commercial

    Commercial

    • Advanced Legal Health Check for Businesses - $18
    • Buy a House with Friends Agreement - $110
    • Commercial Lease - $275
    • Confidentiality Agreement (Non Disclosure) - $99
    • Co-Owners Agreement - $110
    • Dealing with Forgiven Debts (White Paper) - $55
    • Debt Recognition (including pre-Div 7A Loans) - $33
    • Declaration of Trust (before you buy) - $110
    • Demand and Statement of Claim for Debt - NSW - $88
    • Demand and Summons for Debt - VIC - $88
    • Demand and Summons for Debt - WA - $88
    • Div 7A Loan Agreement - $65
    • Div 7A Loan Agreement for UPE - $65
    • Forgiveness of Debt - $121
    • Loan Agreement (No Security) - $110
    • Release of Unpaid Trust Entitlement - $121
    • Statutory Declaration - $0
    • The new small business restructure roll-over rules in practice (White Paper) - $55
  • Employment

    Employment

    • Confidentiality Agreement (Non Disclosure) - $99
    • Employment - Conduct Issues Letter - $33
    • Employment - Employee Expenses Policy - $55
    • Employment - Performance Issues Letter - $33
    • Employment - Request for Medical Information - $33
    • Employment - Termination Letter - $33
    • Employment - Transferring Employee Letter - $33
    • Employment Contract - $120
    • Independent Contractors Agreement - $110
    • Partnership Deed - $220
    • Statutory Declaration - $0
  • Company

    Company

    • Acknowledgement of Trust (already own asset) - $165
    • Adopt Committee Recommendations kit - $33
    • Appoint a Committee kit - $33
    • Appoint an Alternate Director kit - $33
    • Appoint Managing Director & Confer Powers kit - $33
    • Buy a House with Friends Agreement - $110
    • Change Registered Office kit - $33
    • Commercial Lease - $275
    • Company (ELodgement) - $716
    • Company (No Elodgement) - $99
    • Company Constitution Update - $99
    • Confidentiality Agreement (Non Disclosure) - $99
    • Co-Owners Agreement - $110
    • Debt Recognition (including pre-Div 7A Loans) - $33
    • Declaration of Trust (before you buy) - $110
    • Demand and Statement of Claim for Debt - NSW - $88
    • Demand and Summons for Debt - VIC - $88
    • Demand and Summons for Debt - WA - $88
    • Director‘s Indemnity Agreement - Compulsory Insurance - $197
    • Director‘s Indemnity Agreement - No Insurance - $197
    • Div 7A Loan Agreement - $65
    • Div 7A Loan Agreement for UPE - $65
    • Employment Contract - $120
    • Family Trust - Wind up/Vesting - $259
    • Forgiveness of Debt - $121
    • Independent Contractors Agreement - $110
    • Loan Agreement (No Security) - $110
    • Minutes for Members to Inspect Books - $33
    • Minutes for Resigning Director - $33
    • Opening Minutes for the Unit Trust - $33
    • Partnership Deed - $220
    • Power Of Attorney By Company - $99
    • Release of Unpaid Trust Entitlement - $121
    • Remove a Managing Director kit - $33
    • Remove and Replace a Director kit - $44
    • Replace Company Secretary kit - $44
    • Self Managed Superannuation Fund Deed - $165
    • Statutory Declaration - $0
    • Transfer of Shares Kit - $0
    • Unit Trust - $165
    • Unit Trust - Add New Member Kit - $110
  • CPD Webinars

    CPD Webinars

    • CPD Webinar - End Of Financial Year SMSF Planning 2025 - $110
    • CPD Webinar - End Of Financial Year Tax Rollup 2025 - $110
    • CPD Webinar - Tax and Cryptocurrency – A Square Peg in a Round Hole - $110
    • CPD Webinar - Unlocking Microsoft 365 Copilot - $110
    • CPD Webinar - UPEs and Div 7A – Implications of the Recent Bendel Decision - $110
    • CPD Webinar - When Directors are Personally Liable - $110
    • Webinar On Demand - Foreign Trust Taxation Issues - $110
    • Webinar On Demand - Advising on Family Trusts in the 21st Century - $110
    • Webinar On Demand - AI in Professional Practices - Risks and Benefits - $110
    • Webinar On Demand - Drafting Estate Planning Documents to meet Litigation Risks - $110
    • Webinar On Demand - Employee Share Schemes - $99
    • Webinar On Demand - Family Law and Trusts - $110
    • Webinar On Demand - How Binding are Financial Agreements - $110
    • Webinar On Demand - Professional Advisers as Appointor of their Client’s Family Trust - $110
    • Webinar On Demand - Recent Changes in Family Law - $99
    • Webinar On Demand - Sexual Harassment Laws in Australia - $110
    • Webinar On Demand - Tax & Family Trusts - $99
    • Webinar On Demand - Testamentary Trusts 101 - $110
    • Webinar On Demand - Trust Distributions and Section 100A - $99
    • Webinar On Demand - When Directors are Personally Liable - $110
    • Webinar On Demand - Where Death Benefit Nominations Go Wrong - $110
  • All documents

    All documents

    • Acknowledgement of Trust (already own asset) - $165
    • Adopt Committee Recommendations kit - $33
    • Advanced Legal Health Check for Businesses - $18
    • Appoint a Committee kit - $33
    • Appoint an Alternate Director kit - $33
    • Appoint Managing Director & Confer Powers kit - $33
    • Buy a House with Friends Agreement - $110
    • Change Appointor and/or Guardian of Family Trust - $110
    • Change of Name of Family Trust - $110
    • Change Registered Office kit - $33
    • Change Trustee of Family Trust - $110
    • Codicil to change the Executor - $99
    • Commercial Lease - $275
    • Company (ELodgement) - $716
    • Company (No Elodgement) - $99
    • Company Constitution Update - $99
    • Confidentiality Agreement (Non Disclosure) - $99
    • Co-Owners Agreement - $110
    • CPD Webinar - End Of Financial Year SMSF Planning 2025 - $110
    • CPD Webinar - End Of Financial Year Tax Rollup 2025 - $110
    • CPD Webinar - Tax and Cryptocurrency – A Square Peg in a Round Hole - $110
    • CPD Webinar - Unlocking Microsoft 365 Copilot - $110
    • CPD Webinar - UPEs and Div 7A – Implications of the Recent Bendel Decision - $110
    • CPD Webinar - When Directors are Personally Liable - $110
    • Dealing with Forgiven Debts (White Paper) - $55
    • Debt Recognition (including pre-Div 7A Loans) - $33
    • Declaration of Trust (before you buy) - $110
    • Demand and Statement of Claim for Debt - NSW - $88
    • Demand and Summons for Debt - VIC - $88
    • Demand and Summons for Debt - WA - $88
    • Derivative Risk Statement for SMSF - $65
    • Director‘s Indemnity Agreement - Compulsory Insurance - $197
    • Director‘s Indemnity Agreement - No Insurance - $197
    • Disclaimer - Email - $55
    • Div 7A Loan Agreement - $65
    • Div 7A Loan Agreement for UPE - $65
    • Employment - Conduct Issues Letter - $33
    • Employment - Employee Expenses Policy - $55
    • Employment - Performance Issues Letter - $33
    • Employment - Request for Medical Information - $33
    • Employment - Termination Letter - $33
    • Employment - Transferring Employee Letter - $33
    • Employment Contract - $120
    • Enduring Power of Attorney - NSW - $55
    • Enduring Power of Attorney - SA - $55
    • Enduring Power of Attorney - WA - $55
    • Enduring Power of Attorney (Financial, Personal/Health) - QLD - $55
    • Enduring Power of Guardianship - NSW - $55
    • Enduring Power of Guardianship - WA - $55
    • Family Trust - $165
    • Family Trust - Streaming & Bamford Update - $165
    • Family Trust - Update to Allow Change of Appointor and Guardian - $165
    • Family Trust - Update to allow Sole Trustee - $55
    • Family Trust - Update to Exclude Foreign Persons (NSW) - $198
    • Family Trust - Wind up/Vesting - $259
    • Forgiveness of Debt - $121
    • Independent Contractors Agreement - $110
    • Investment Strategy for Self Managed Super 15/16 - $65
    • Investment Strategy for Self Managed Super 16/17 - $65
    • Investment Strategy for Self Managed Super 17/18 - $65
    • Investment Strategy for Self Managed Super 18/19 - $65
    • Investment Strategy for Self Managed Super 19/20 - $65
    • Investment Strategy for Self Managed Super 20/21 - $65
    • Investment Strategy for Self Managed Super 21/22 - $65
    • Investment Strategy for Self Managed Super 22/23 - $65
    • Investment Strategy for Self Managed Super 23/24 - $65
    • Investment Strategy for Self Managed Super 24/25 - $65
    • Loan Agreement (No Security) - $110
    • Minutes for Members to Inspect Books - $33
    • Minutes for Resigning Director - $33
    • Opening Minutes for the Unit Trust - $33
    • Partnership Deed - $220
    • Pension Pack for Self Managed Super - $299
    • Power Of Attorney By Company - $99
    • Product Disclosure Statement (general) - $66
    • Product Disclosure Statement (Pension only) - $99
    • Release of Unpaid Trust Entitlement - $121
    • Remove a Managing Director kit - $33
    • Remove and Replace a Director kit - $44
    • Replace Company Secretary kit - $44
    • Self Managed Superannuation Fund Deed - $165
    • SMSF - Minute to Appoint Administrator - $33
    • SMSF - Minute to Appoint an Auditor - $33
    • SMSF - Minute to Approve Financial Statements - $33
    • SMSF - Minute to Insure The Members - $33
    • SMSF - Update Rules - $165
    • SMSF Limited Recourse Borrowing Arrangement - $330
    • SMSF Restricted Commercial Property Assessment - $695
    • SMSF Restricted Residential Property Assessment - $315
    • Statutory Declaration - $0
    • The new small business restructure roll-over rules in practice (White Paper) - $55
    • Transfer of Shares Kit - $0
    • Trust Distribution Minutes Library for 2008/09 - $99
    • Trust Distribution Minutes Library for 2009/10 - $99
    • Trust Distribution Minutes Library for 2010/11 - $99
    • Trust Distribution Minutes Library for 2011/12 - $99
    • Trust Distribution Minutes Library for 2012/13 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2012/13 - Single-Use - $110
    • Trust Distribution Minutes Library for 2013/14 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2013/14 - Single-Use - $110
    • Trust Distribution Minutes Library for 2014/15 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2014/15 - Single-Use - $110
    • Trust Distribution Minutes Library for 2015/16 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2015/16 - Single-Use - $110
    • Trust Distribution Minutes Library for 2016/17 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2016/17 - Single-Use - $110
    • Trust Distribution Minutes Library for 2017/18 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2017/18 - Single-Use - $110
    • Trust Distribution Minutes Library for 2018/19 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2018/19 - Single-Use - $110
    • Trust Distribution Minutes Library for 2019/20 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2019/20 - Single-Use - $121
    • Trust Distribution Minutes Library for 2020/21 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2020/21 - Single-Use - $121
    • Trust Distribution Minutes Library for 2021/22 - Multi-Use - $350
    • Trust Distribution Minutes Library for 2021/22 - Single-Use - $121
    • Trust Distribution Minutes Library for 2022/23 - Multi-Use - $363
    • Trust Distribution Minutes Library for 2022/23 - Single-Use - $132
    • Trust Distribution Minutes Library for 2023/24 - Multi-Use - $363
    • Trust Distribution Minutes Library for 2023/24 - Single-Use - $132
    • Trust Distribution Minutes Library for 2024/25 - Multi-Use - $363
    • Trust Distribution Minutes Library for 2024/25 - Single-Use - $132
    • Unit Trust - $165
    • Unit Trust - Add New Member Kit - $110
    • Webinar On Demand - Foreign Trust Taxation Issues - $110
    • Webinar On Demand - Advising on Family Trusts in the 21st Century - $110
    • Webinar On Demand - AI in Professional Practices - Risks and Benefits - $110
    • Webinar On Demand - Drafting Estate Planning Documents to meet Litigation Risks - $110
    • Webinar On Demand - Employee Share Schemes - $99
    • Webinar On Demand - Family Law and Trusts - $110
    • Webinar On Demand - How Binding are Financial Agreements - $110
    • Webinar On Demand - Professional Advisers as Appointor of their Client’s Family Trust - $110
    • Webinar On Demand - Recent Changes in Family Law - $99
    • Webinar On Demand - Sexual Harassment Laws in Australia - $110
    • Webinar On Demand - Tax & Family Trusts - $99
    • Webinar On Demand - Testamentary Trusts 101 - $110
    • Webinar On Demand - Trust Distributions and Section 100A - $99
    • Webinar On Demand - When Directors are Personally Liable - $110
    • Webinar On Demand - Where Death Benefit Nominations Go Wrong - $110
    • Will - Married or Defacto No Children - $95
    • Will - Married or Defacto with Children - $95
    • Will - Single No Children - $110
    • Will - Single With Children - $110
  • Bulletin

Top 3 Docs Quick Launch

Create New Company Create New Family Trust Create New SMSF

New Release

Trust Distribution Minutes Library for 2024/25 - Multi-Use
View Full Range

Join
it's free

Join Now Join Now

Need legal advice or a specially customised legal document?

Contact our partner law practice

Click here to arrange a quote

Support - Help is here

Support
help is here

  • FAQ
  • Enquire Online
  • Contact Us
Print Version Back

Is the ATO the new agent of Communism?

Issue: 400 - Tuesday, 31 January 2012

In this Issue

  1. Is the ATO the new agent of Communism?
  2. LawCentral Documents Price List

1. Is the ATO the new agent of Communism?

Question: I operate a business supplying and installing solar power systems at residential properties. I am a one man show. I do get help from my wife with the admin side of things though. Occasionally I need to engage some contract labour to help with installations. About 3 months ago I got a letter telling me I am being audited by the ATO. Last week I received some interim audit report saying I’ve earned an extra $180,000 of income. It even says I have to pay a 75% penalty for “intentionally disregarding the tax law”.

To compete with the big players in the market, I sell the hardware for a low markup and rely on the installation cost to get by. The ATO says I’m supposed to use the same markup as everyone else in my industry or I must be defrauding the ATO. Is this right? Or is it some kind of price fixing?

Small Business Owner, Adelaide, SA

Answer: You are definitely not alone in being targeted by an overzealous ATO. We have had many similar tales of woe from all over the country. When I see how some of the ATO Benchmarks are applied, I see red. Not the red haze of anger, but the good old fashioned cold war red of communism. I have to wonder, is the ATO attempting to implement its own policy of state controlled pricing?

The ATO developed the Small Business Benchmarks (Benchmarks) over a number of years. They collected data from a (supposedly wide) range of business in a particular industry. From those statistics, the ATO created the benchmark ratios that businesses should operate within.

There are literally hundreds of business industry codes (business code) which the ATO uses. Taxpayers and their accountants have to select a business code that ‘best fits’ their business. The ATO then looks at your reported business income and expenses from the income tax return. Your reported figures are compared to the benchmark for your business code.

If your reported figures are outside the benchmark for the business code that ‘best fits’ your business – then you are likely to be selected for an audit.

Training Video

» Click here to view

The most common question I get from clients subject to benchmark audits is this:
“If I have to use the same markup as everyone else in my industry and we all buy our stock for the same price from the wholesalers, who have to use the same markup as all the other wholesalers in the industry too, then isn’t that price fixing?”

Why do people always ask me this question?

It is because the ATO penalises people for using free market economic theory in their businesses. By that I mean, businesses are penalises for choosing to use a lower markup in order to achieve a greater market share, or to preserve their existing market share. In my view that is very much a legitimate business practice. Indeed it is a practice which has been adopted for centuries to ensure the continued growth of a business’ customer base.

Why is selling stock at a discounted price such a bad thing according to the ATO?

Since the introduction of the self assessment system of taxation, the ATO has struggled to keep pace with its compliance duties. With operating budgets being continually squeezed tighter by Canberra, the poor old ATO is forced to use shortcuts to do its job.

Benchmarks are the flavour of the month as far as shortcuts go at the ATO. The benchmarks allow the ATO to be lazy when selecting businesses or individuals for audits. The benchmarks then assist the overstretched auditors to cut corners and meet performance targets.

How are the benchmarks being used by the ATO?

In my experience with the ATO’s use of the benchmarks – the benchmarks are being treated like ‘black letter law’. The only problem is, the benchmarks are not law at all – rather, the benchmarks are merely policy or a guideline.

A very troubling aspect of the benchmarks is that the cost of goods sold (COGS) ratio is applied very strictly. The problem with that approach is that the ATO is essentially enforcing a policy which encourages price fixing in the market.

Let’s take the scenario from this week’s question. After having examined the business codes produced by the ATO, there is no code for ‘solar panel supply and installation’, so the closest thing is ‘solar hot water system installation’. Then to select the correct benchmark to use, from the ATO website there is again nothing applicable, so there is no option but to select either ‘electrical services’ or ‘plumbing services’ or ‘airconditioning and refrigeration installation’ as being the closest fit.

From that complete mess, the ATO has taken the reported figures from our friend’s income tax return and assessed it against any one of a number of benchmarks that the ATO thinks is closest to the correct business. So from the outset, the ATO is comparing apples with durian.

After comparing our friend’s reported figures with a benchmark that may not be appropriate, the ATO auditor makes two assumptions:

  1. There is absolutely nothing flawed in the benchmark system; and
  2. The taxpayer must be a fraudster.

The poor taxpayer then gets put to the stress and expense of proving their innocence. This is in instances where the ATO may not have even looked at the taxpayer’s records for the full financial year.

Once the ATO has pretended to consider the response put forward by the taxpayer, an assessment is made that the taxpayer must have not declared all of their income. The ATO says the taxpayer’s record keeping is not good enough and therefore the ATO cannot rely on the reported income amounts. Ironically, the ATO then relies on those very same records to say the COGS are correct. The reported COGS are used to calculate what the ATO says is the true income based on the benchmarks.

Once the ATO has deemed the taxpayer to have earned a truckload more cash, without any evidence that the income was in fact earned, the ATO applies a penalty of 75% on the basis that the taxpayer intentionally lied about their income. Even though the taxpayer never knew they earned the extra money, because they didn’t earn more than they reported.

How do the benchmarks encourage price fixing?

Rather than being at liberty to make legitimate business decisions – the benchmarks enforce a very limited range within which a business can operate. Of course businesses are always free to make their own decisions about what price to sell stock at. However, if a business chooses to sell stock at a lower gross profit margin, they are penalises by the ATO in the form of more frequent audits.

In most cases there is nothing wrong with the business that is targeted by the ATO for a benchmark audit. In most cases the business is healthy and makes a good profit in the eyes of the business owner.

The longer the benchmarks are used as a basis of targeting businesses for ATO audits – and then making default assessments of the business income, the more businesses change their behaviour to report inside the benchmarks. The problem with that is many businesses report outside of the benchmarks for very legitimate reasons. By changing their business strategy and ensuring their COGS is within the benchmarks, the businesses are [perhaps unknowingly] engaging in price fixing conduct.

Price fixing usually involves two or more businesses coming to an agreement to charge a particular price for a particular product or service – with the aim of making each other more profitable. The difference between conventional price fixing and the benchmarks is that businesses are not coming to an agreement with each other – rather the profit margin for their products is forced upon them by the ATO. Although the businesses are not charging the same price for their products by agreement, they are still making a conscious decision to charge the same price as the rest of the market for fear of negative tax consequences.

What do you do if the ATO selects you for an audit?

The first thing you need to do is contact your accountant and tax lawyer immediately. The next thing you need to do is become a Platinum Member to learn our secret tips for ATO audits.

Platinum Members, click here to view content

How do you avoid being audited on a regular basis?

The short answer, you can’t. However, once you’ve placated the ATO for a few years – and shown them that you operate legitimately outside the Benchmarks, you should be fine.

The best way to avoid being audited is to stay on top of your book keeping. Keep your accountant busy. Collect up all your invoices, receipts, and payments and hand it all over to your accountant. They need that to double check the figures that you report on your BAS.

Being one step ahead of the game is the best defence when dealing with the ATO.

Can you avoid the Benchmarks altogether?

Unfortunately, there is no avoiding the Benchmarks for your industry. Even if you deal exclusively with electronic transactions – you are still subjected to the Benchmarks.

I know it is not fair. Why should the ATO be allowed to ‘determine’ that you have under-declared your income purely based on some arbitrary number?

The flaw in the system is that it fails to recognise that no two businesses are the same. Not even if they operate in the same industry. The Benchmark system fails to consider:

  • the demographic of the client base;
  • changing trends towards using electronic payment methods over cash;
  • the region the business operates in;
  • the payment policies of the business itself; and
  • what happens to the business when the main man (or woman) takes extended leave.

Don’t forget to make good use of your team of professionals. Your accountant, advisers and tax lawyers are all there to be utilised. Their job is to make your life easier.

Build these documents now:

  • Bankruptcy Notice
  • Div 7A Loan Agreement
  • Independent Contractors Agreement
  • Loan Agreement (also for Debt/Equity rules)

Read these bulletin articles now:

  • ATO audits cash sales. Am I going to jail?
  • My client lied to the ATO - now what?
  • ATO Data Matching to eBay
  • Asset Protection

Keywords: Audit, ATO, Cash Economy, Fraud, Tax Fraud, Gaol, Prison, Disclosure, Recorded Interview, Interview, Tax Audit, GST, Small Business Benchmarks, Benchmarks, Brett Davies, Tim Poli, Tax Objection


2. LawCentral Documents Price List

Document Name


RRP
(incl. GST)


Platinum Price
(incl. GST)

Acknowledgement of Trust (already own asset)
$165
$150
Adopt Committee Recommendations kit
$33
$22
Appoint a Committee kit
$33
$22
Appoint an Alternate Director kit
$33
$22
Appoint Managing Director & Confer Powers kit
$33
$22
Appoint New Director kit
$33
$22
Are you an Accidental Spammer?
$55
$55
Bankruptcy Notice
$198
$198
Build a Company
$99
$95
Business Succession - Insurance, Tax & Facts
$399 $99
Special Price

$90
Buy a House with Friends Agreement
$99
$89
Capital Gains Tax Asset Register kit
$33
$33
Certificate of Compliance for SMSF
$33
$22
Change Registered Office kit
$33
$22
Change Trustee of Family Trust
$110
$110
Changes to Section 109UB
$33
$22
Child Maintenance Trusts - The Facts
$88
$66
Codicil to change the Executor
$99
$90
Commercial Lease
$220
$199
Common Sense Guide to PC Security
$55
$55
Company Constitution (Add Div 7A)
$77
$75
Company Constitution Update (incl Div 7A)
$99
$95
Confidentiality Agreement (Non Disclosure)
$55
$55
Contractual Will Agreement
$195
$165
Convert to a Single Director Company
$99
$95
Copyright Assignment Agreement
$250
$250
Debt Forgiveness Kit
$99
$99
Debt Recognition (including pre-Div 7A Loans)
$33
$33
Declaration of Trust (before you buy)
$99
$99
Demand and Statement of Claim for Debt - NSW
$55
$55
Demand and Summons for Debt - ACT
$55
$55
Demand and Summons for Debt - NT
$55
$55
Demand and Summons for Debt - QLD
$55
$55
Demand and Summons for Debt - SA
$55
$55
Demand and Summons for Debt - TAS
$55
$55
Demand and Summons for Debt - VIC
$55
$55
Demand and Summons for Debt - WA
$55
$55
Demonstration for Financial Spectrum Software
Free
Free
Deregistration of a Company
$88
$88
Derivative Risk Statement for SMSF
$55
$55
Director`s Indemnity Agreement
$44
$33
Directors Conflict of Interest Kit
$44
$33
Disclaimer - Email
$55
$50
Div 7A Loan (including 2008 Amnesty)
$44
$44
Div 7A Loan Agreement
$44
$44
Employer Sponsored Super Kit for Super Fund
$88
$77
Employment Contract
$99
$87
Enduring Power of Attorney - ACT
$55
$55
Enduring Power of Attorney - NSW
$55
$55
Enduring Power of Attorney - QLD
$55
$55
Enduring Power of Attorney - SA
$55
$55
Enduring Power of Attorney - VIC
$55
$55
Enduring Power of Attorney - WA
$55
$55
Equipment Rental Agreement / Lease of Chattel
$299
$275
Executor`s Handbook
$88
$80
Family Trust
$275
$220
Family Trust - Update Rules, Appointor or Trustee
$165
$145
Guide to Leasing Commercial Property - SMSF
$55
$44
Hybrid Discretionary Trust
$599
$550
Income Equalization within a Corporate Group
$55
$50
Independent Contractors Agreement
$220
$199
Investment Strategy for Self Managed Super
$55
$50
Investment Strategy for Self Managed Super 06/07
$55
$50
Investment Strategy for Self Managed Super 07/08
$55
$50
Investment Strategy for Self Managed Super 08/09
$55
$50
Investment Strategy for Self Managed Super 09/10
$55
$50
Investment Strategy for Self Managed Super 10/11
$55
$44
Is there a life before or after bankruptcy?
$22
$22
IT Services Agreement
$99
$99
Key Persons Insurance Kit
$66
$55
Loan Agreement (also for Debt/Equity rules)
$99
$88
Managed Discretionary Account (FSRA Compliant)
$99
$99
Medical Power of Attorney (Living Will)
$55
$55
Minutes for Members to Inspect Books
$33
$22
Minutes for Resigning Director
$33
$22
Mortgage Broker Assignment Deed
$249
$249
MySF Manager - DIY Edition (SMSF Software)
$660
$660
National Privacy Principles and the Internet
$55
$55
Negative Gearing Manual for 2006
$55
$44
Negative Gearing Manual for 2007
$55
$44
Negative Gearing Manual for 2008
$55
$44
Negative Gearing Manual for 2009
$55
$44
Negative Gearing Manual for 2010
$55
$55
Opening Minutes for the Unit Trust
$33
$22
Partnership Agreement
$220
$197
Pension Pack for Self Managed Super
$299
$275
Power Of Attorney By Company
$99
$99
Product Disclosure Statement (general)
$66
$55
Product Disclosure Statement (Pension only)
$99
$95
Remove a Managing Director kit
$33
$22
Remove and Replace a Director kit
$44
$33
Replace Company Secretary kit
$44
$33
Representative Agreement (FSRA Compliant)
$90
$90
Residential Tenancy Agreement
$77
$77
Retail Leases Manual
$55
$55
Revocation of Power of Attorney
$55
$55
Salary Packaging Car Kit
$110
$99
Self Managed Superannuation Fund Deed
$220
$197
Service Trust Agreement
$220
$199
SMSF - Deed Update
$165
$145
SMSF - Deed Update Asset Protection & B/Nomination
$99
$87
SMSF - Guide to Transacting with your own Fund
$22
$22
SMSF - Minute to Appoint Administrator
$33
$22
SMSF - Minute to Appoint an Auditor
$33
$22
SMSF - Minute to Approve Financial Statements
$33
$22
SMSF - Minute to Insure The Members
$33
$22
SMSF - Revert to Accumulation Phase
$99
$90
SMSF - Update Instalment Warrants
$149
$122
SMSF - Update Trustees and Members
$99
$99
SMSF - Why You Need a Product Disclosure Statement
$22
$22
SMSF- Minute to Approve Financial Statements 07/08
$33
$22
SMSF- Minute to Approve Financial Statements 08/09
$33
$22
SMSF- Minute to Approve Financial Statements 09/10
$33
$22
Software Development Agreement
$99
$99
Software Licence Agreement
$275
$275
Sophisticated Investor Certificate
$22
$22
Statutory Declaration
Free
Free
Tax Intelligent Options Trader Guide
$99
$99
Transfer of Shares Kit
Free
Free
Trust Distribution Minutes Library for 05/06
$99
$90
Trust Distribution Minutes Library for 06/07
$99
$90
Trust Distribution Minutes Library for 07/08
$99
$90
Trust Distribution Minutes Library for 08/09
$99
$90
Trust Distribution Minutes Library for 09/10
$99
$90
Trust Distribution Minutes Library for 10/11    $99    $90
Unit Trust
$330
$275
Unit Trust - Add New Member Kit
$110
$99
Website Terms And Conditions
$99
$99
Will - Single
$99
$90
Wills - Mutual
$165
$145


  • Legal Documents Online
  • Trust
  • Superannuation
  • Estate Planning
  • Commercial
  • Employment
  • Company
  • CPD Webinars
  • All Documents
  • Price List
  • Join Us
  • Join for Free
  • Memberships
  • About Law Central
  • About Us
  • * Our Guarantee
  • Printing and Binding
  • Site Map
  • Terms and Conditions
  • Privacy Policy
  • Disclaimer
  • Support
  • FAQ
  • Contact Us
  • Feedback
  • Connect
You should follow us on Twitter Subscribe to our RSS feed Follow us on Linked In Subscribe to our Legal Bytes channel

Copyright © 2000-2025 Law Central Co Pty Ltd ABN 98 091 824 225
Site Map | Terms and Conditions | Privacy Policy | Disclaimer