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February 12, 2015 at 12:50 pm #990827DavejochowMember
- Total posts: 38
I was reading an advertisement in the paper about a big national storage company who offered 10% discount to those who paid upfront in cash. I imagine that if someone from the ATO read this they would be contacting the company voicing their disapproval. Am I wrong? Can you offer incentives to customers to pay of front, because it seems like an obvious way to avoid tax/ get. ThanksFebruary 12, 2015 at 1:56 pm #1178741MyGreatIdeaMember
- Total posts: 2,278
I think you’ll find that “cash” means not on credit card, by direct debit, or paying monthly. Even so, there’s nothing illegal about using cash to pay for goods or services :confused:
They ask for an upfront payment and offer a discount in return.
It’s a great way to improve your cashflow and has nothing to do with avoiding tax.
WendyFebruary 12, 2015 at 9:18 pm #1178742ThexArmMember
- Total posts: 253
I agree with Wendy there is nothing wrong in offering discounts for paying upfront. It’s a very good accounts receivable strategy. Also, paying cash is legal. Although it is a bit of work handling cash as you need to first secure it in the premises, then go to the bank to deposit and a bit of hassle in bank reconciliation.
But if as Wendy mentioned cash includes EFT then no trouble. It’s a simple and quick.February 13, 2015 at 1:15 am #1178743Jason RamageParticipant
- Total posts: 3,165
No expert here although as cash is legal tender/currency I am sure that all and any offer incentivising someone to pay in the form of cash is acceptable. It is not discriminatory, I don’t believe, to do this.
But reading between the lines and referencing the ATO being curious (not how you put it though) is this because you think the busieness is not declaring said cash? The ATO may look into the practice as a revenue avoidance scheme if they think this is the case, although I truly disbelieve that they could halter this type of campaign for any sound reason.
Hope that makes sense?
JasonJason Ramage | Lucas Arthur Pty Ltd | E: firstname.lastname@example.org P: 61 3 8324 0344 M: 61 412 244 888February 13, 2015 at 1:23 am #1178744MissSassyMember
- Total posts: 1,255
As others have said, it is not illegal to offer a 10% discount for the payment of cash. This does not mean that they are not going to declare the cash payments, it just means they are offering a discount – just like any other business offers a discount at different times. Payment upfront means they have the money before the service is offered, good for their cashflow.
A business that was to say “Oh if you pay cash I will knock off the GST”, that is a completely different statement.
Be careful not to assume about a business, I am sure the ATO will not have any issues with this promotion.
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