Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

The ATO benchmark for retail newsagencies continues to be out of date

Mark Fletcher
March 15th, 2019 · 5 Comments

The Australian Tax Office uses benchmarks to trigger investigations and audits, among other things. Their benchmarks for our channel are out of date. Take a look:

I think they need to have a series of sub-cat benchmarks based on the product mix as well as the location. Rent, for example, on the high street is different to a major mall and in a rural situation it is different again.

Similar differences exist with labour, based on product mix and location.

Their cost of sales benchmark data is wrong, too, in my experience.

This matters because of actions by the ATO that can be triggered, attention that can be drawn, based on the comparison of data from a business against the benchmark.

I have sought engagement with the ATO on this, without success at this point.

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Category: Newsagency challenges · Newsagency management

5 responses so far ↓

  • 1 Graeme Day // Mar 15, 2019 at 2:12 PM

    Out of date is so right.
    If one goes by the Sales Benchmark percentage for anything without using their Gross Profit comparison percentage then they truly are living in yeaterday.
    With Sales 75% off etc and Retail stores as well as some online sales showing a Loss Bottom Line.
    Using these Sales figures to as Benchmark to anyone, shareholders, ATO ,Landlords to themselves and believing it has creditability is madness. No wonder rents remain high!

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  • 2 Jason // Mar 16, 2019 at 12:53 PM

    The benchmarks are from FY16-17 data, it doesn’t get more up-to-date than that – or are you suggesting the ATO aren’t using that dataset?

    For the variations like higher rents varying by location isn’t that largely irrelevant? Your turnover either had a corresponding increase within the ratio, you offset it with a reduction in other expenses or you have a real problem. Breaking down the ratios to location and product mix wouldn’t be statistically significant.

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  • 3 Mark Fletcher // Mar 16, 2019 at 1:27 PM

    Jason, if you follow the link the ATO notes: Last modified: 27 Feb 2019. While the graph data, yes, is from 2016/17.

    I think their data is our of date to the channel today. Further I think their grouping of the channel into one results in an inadequate benchmark for them to compare against.

    Based on data I see, breaking down the ratios to location and product mix would be beneficial to newsagents and the ATO.

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  • 4 Jason // Mar 18, 2019 at 9:05 AM

    FY17-18 data wouldn’t be complete or available yet, 16-17 is the most recent and complete dataset.

    Breaking it down still wouldn’t be statistically significant, but they provide the data for you to break it down yourself i you so choose. I can see why the ATO haven’t done what you want, it doesn’t make sense.

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  • 5 Mark Fletcher // Mar 18, 2019 at 9:07 AM

    Jason I am told the ATO is considering a breakdown, recognising that what they consider the newsagency channel does not exist.

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