The Australian Taxation Office has visited over 1000 building and construction small businesses over the past financial year to talk with them about their tax and superannuation obligations.

It will be visiting thousands more in the coming months. And it's now using social media to catch out tax cheats.

Assistant Commissioner Matthew Bambrick told Fairfax Media the top three risky industries were hospitality, made up of 70,000 businesses; hair and beauty salons, of which there are 50,000; and building and construction, made up of 406,000 businesses.

He said tradies were now a focus because it was a much bigger industry and "they have ready access to cash".

As Fairfax Media reported, more than 5500 workers dob in their bosses to the ATO every year for allegedly illegally paying them "cash in hand".

But these are just the tip of the iceberg. The ATO estimates about 1.6 million businesses - mostly micro and small businesses with an annual turnover up to $15 million - operating across 233 industries may be part of the illegal cash economy.

Trade shows hit

As of June last year more than 250,000 building industry contractors accused of dodging their GST or income-tax obligations were hit with $2.3 billion in tax bills.

Mr Bambrick said the ATO was using data and analytics to target the building and construction industry, and was now complementing that strategy with on-site visits.

"This year the ATO has started trialling targeted engagement at events with high concentrations of the B&C population, such as attending the HIA Building and Business trade show in June," Mr Bambrick said.

"We are also focusing on new entrants to building and construction industries as part of our prevention work to put them on the right path for meeting their tax and superannuation obligations."

The scrap metal industry was also under watch. He said a lot of new businesses were setting up in the industry and often they didn't even have an ABN.

Social media to catch cheats

Mr Bambrick said while the ATO did not use social media to determine who it reviews and audits, it did cross-check what people tell them by monitoring public Facebook accounts and online websites such as Gumtree and eBay.

For example, if someone was reporting low-income but had a house valued at more than a million dollars and pictures of themselves holidaying at high-end ski resorts, "that might be something that they need to explain to us", he said.

Mr Bambrick cited another case where a nightclub operator was hiding the fact that staff were performing shows on a particular night, but then a Facebook check revealed performances did actually take place - meaning income was being concealed.

The ATO has identified the cash economy as a major tax integrity risk, which 375 ATO staff, and a budget of more than $37 million in 2015-16 monitor.

In 2015-2016 the agency monitored 127,000 cash economy businesses, conducted 15,000 audits and enforcement activities and raised over $208 million in tax and penalties.

Audits arise from visits

While the ATO will not give an exact figure of how many billions of dollars is lost to the black economy, the agency has in recent years stepped up audits of small businesses in high-risk industries.

In the past two years the ATO has undertaken visits of specific areas where hundreds of these businesses are focused including Haymarket in Sydney, Box Hill in Melbourne and areas around the Gold Coast.

ATO officers with language interpreting services for Chinese, Vietnamese, Korean, Japanese, Bosnian and Serbian languages are sent out to remind business owners of their tax obligations and in some cases this has led to audits.

Mr Bambrick said this year 95 staff were involved in walk-ins in the  Gold Coast region and visited businesses that operated at Surfers Paradise, Broadbeach, Main Beach and Carrara areas.

smh.com.au