Businesses are advised to make sure their tax records are in order, with one expert warning the Australian Tax Office is beefing up its data tracking methods.

Chartered accountant with Pilot Partners Murray Howlett says the ATO has more than just the tax status of salads on its mind at the moment: SME owners' social media accounts could also be under scrutiny, Howlett told SmartCompany.

"The ATO is very concerned about tax avoidance and making sure people are doing the right thing, so they're trying to get better at looking at what's publicly available," Howlett says.

"They're looking for inconsistencies in what people are reporting, and what their social media reveals their lifestyle to be like."

Howlett uses the example of a citizen who reported low income to the ATO but had multiple photos of "flashy cars and boats" on his social media.

In a statement to SmartCompany, the ATO revealed it has been "investing in data collection analysis to find cases of people's declared income not matching their lifestyles".

"It's a reality of the age we live in that there is more and more information publicly available, particularly through social media platforms. We never go looking for this information where people are doing the right thing and are open with us," an ATO spokesperson said in a statement.

"We only go looking when something doesn't add up. We continue to support those who do the right thing, and identify and take action against those who choose not to."

The ATO's policies surrounding the use of social media for tax compliance outline mean that ATO staff may only access social media sites found through a search with a "search provider", such as Google.