Taxman sips at the froth on the coffee

Concerned that operators are skimming off cash from coffee sales instead of properly reporting their income, the Australian Tax Office has warned the sector it will be watching closely in the coming year.

In its compliance program, released today, the ATO has also added plasterers to its traditional list of targets: the rich, big business and construction contractors.

The ATO will put Australia's baristas under the microscope by stepping up a surveillance program in which it compares bulk coffee sales to purchasing records maintained by cafes.

"We're working with the industry to better understand what their processes are and their controls of the various franchises and individual cafes," second commissioner Bruce Quigley said.

For big business, transfer pricing between Australian companies and their overseas associates remains a key area of dispute with the ATO.

At the microbusiness end of the scale, the ATO is cracking down on plasterers amid concerns about rorting of the Queensland flood reconstruction effort and a large number of complaints from the public.

"The nature of the work lends itself to a lot of cash transactions," Mr Quigley said. "We're stressing the need for people to have good records."

Unpaid superannuation is also on the hit list, with new anti-phoenixing laws that came in on July 1 making it possible for the ATO to go after the personal assets of company directors to recover the money.

"It was too easy for them to have a company set up, walk away from that company with all the debts that are owed, not only to the Tax Office but to others, and start again," Mr Quigley said.

"You can look behind the corporate veil and we can get access to the assets that they have individually in their own right, so it should help."

The ATO plans to engage with more of the 2600 Australians who control assets of more than $30 million and this year will increase audits of the more than 70,000 people with wealth of between $5 million and $30 million.

"A lot of them are into what you would call fairly aggressive [tax] schemes," Mr Quigley said. Co-operation with other state and federal agencies, including access to yacht registrations and land transfer records, meant the ATO was able to build a detailed portrait of highly wealthy individuals, he said.

Robert Jeremenko, senior tax counsel for the peak body representing tax practitioners, the Tax Institute, said the ATO appeared keen to continue the work of Project Wickenby, its operation targeting tax evasion using offshore vehicles.

"Maybe it's a case of the ATO and their new computer system, which caused them a lot of problems a few years ago, starting to pay off," he said.