The Australian Taxation Office (ATO) has hit a major milestone of over 300,000 tip-offs from the community about tax avoidance and other dishonest behaviours since 1 July 2019. In the 2024–25 financial year alone, almost 50,000 red flags were raised by the community who spotted something suspicious.
Most of the tip-offs received related to shadow economy activity, like demanding cash payment for work or incorrectly claiming business expenses. The ATO estimates the community is missing out on billions in stolen taxes every year from this behaviour, which weakens funding for essential services such as health, education, transport, infrastructure and disaster response.
ATO Assistant Commissioner Tony Goding said businesses who dodge their tax and super obligations are simply stealing from fellow Australians.
‘When someone cheats the system, they’re not just breaking the law, they’re freeloading on honest businesses and the rest of the community.’
‘Paying tax is not optional. Sooner or later, and probably sooner, if you’re operating in the shadow economy, the ATO will discover this, through our extensive data-matching through initiatives including the Taxable Payment Reporting System and the Sharing Economy Reporting Regime, our industry benchmarks or as a result of a tip-off from one of your workers, customers or competitors.’
Spotting the red flags
Tip-offs help level the playing field and protect honest businesses. This year, Australians reported businesses and individuals who:
- didn’t declare their income
- demanded or paid for work in cash to avoid tax
- lived lifestyles that didn’t match their known income
- failed to report all sales.
But it’s not just ‘cash only’ signs that should raise eyebrows. A luxury car parked outside a business that claims to be struggling? A café that’s always busy but never seems to report profits or employees? Workers being paid in cash and not receiving payslips or super? These are the suspicions that Australians are flagging.
‘People evading their tax and super obligations are directly harming honest businesses and putting an increased burden on other Australians. There really is no excuse.’
‘It’s unfair competition and it’s illegal. And when you’re caught, you don’t just have to cough up the tax. You’ll also face significant penalties plus interest on unpaid taxes and possibly even criminal sanctions,’ Mr Goding said.
Hot spots across Australia
In 2024–25, New South Wales residents raised 15,907 tip-offs, followed closely by Victorians with 11,890 and Queenslanders with 10,630.
While Sydney and Melbourne topped the charts for tip-offs, red flags aren’t just flying in the capital cities.
In fact, the top 5 regional areas for tip-offs this year were mostly in Queensland:
- Newcastle, NSW
- Robina, QLD
- Sunshine Coast Hinterland, QLD
- Townsville, QLD
- Toowoomba, QLD
‘From coastal towns to inland hubs, communities are calling out suspicious behaviour and helping the ATO crack down on the shadow economy,’ Mr Goding said.
Industries under the microscope
The top 3 industries seeing a surge in red flags this year are:
- building and construction
- cafés and restaurants
- hairdressing and beauty services.
‘With tip-offs often coming from customers, employees, other businesses, and even family and friends, the community is clearly fed up with dodgy behaviours and is stepping up to help us make things fairer,’ Mr Goding said.
Raise the red flag
The ATO receives almost 1,000 tip-offs every week from people who know or strongly suspect tax evasion.
These tip-offs can sometimes be the first sign that something isn’t quite right.
‘When we receive information through a tip-off, we cross-check the information and assess whether further action is required,’ Mr Goding said.
And the numbers speak for themselves, in 2024–25 around 85% of tip-offs analysed were found to be suitable for further investigation.
This investigation is carried out by specialised teams within the ATO, who share information with our cross-agency partners including through the Shadow Economy Taskforce.
If you suspect someone is ripping off the tax and super system, raise the red flag and report it. It only takes a few minutes and you can remain anonymous. Visit us at www.ato.gov.au/tipoff or call us on 1800 060 062.
Example
Charlie’s construction company
Charlie owns a construction company and sometimes does his admin from home. To boost his take-home pay, he accepts cash and then under declares his business income.
After hearing about AI tools from friends, Charlie has the ‘great idea’ to generate fake receipts for business expenses. He even brags to others about how ‘real’ they look. But when he shares this hack with Billy, a fellow business owner, it doesn’t sit right.
Billy knows paying tax is not optional and that Charlie’s actions are hurting honest businesses like his. He raised the red flag and reported a tip-off to the ATO.
The matter was referred to a specialist shadow economy audit team and their investigation uncovered:
- Charlie’s reported business income was 5 times lower than his actual earnings
- business income was deposited directly into Charlie’s personal account
- Charlie had fabricated payslips and receipts.
After ATO officers spoke with Charlie, it was clear he understood his obligations as a business owner – he just chose to ignore them.
Charlie was hit with over $2 million in estimated income tax and penalties, and his case was referred to the Australian Federal Police for criminal investigation.
Notes to journalists
- ATO Assistant Commissioner Tony Goding is available for interviews on request.
- A high-resolution headshot of Assistant Commissioner Tony Goding is available for download from our media centre.
- Media grabs of ATO Assistant Commissioner Tony Goding discussing the shadow economy are available from the ATO media centre.
- ATO stock footage and images are available for use in news bulletins from our media centre.
Contact details:
ATO Media Unit | [email protected] | 02 6216 1901