ATO data regarding Super Guarantee non-compliance The ATO has provided some information about Superannuation Guarantee (SG) non-compliance in its submission to a Senate inquiry into the impact of the non-payment of the Superannuation Guarantee. In addition to marketing and education activities to re-enforce the need for employers to meet their SG obligations, the ATO conducts audits and reviews to ascertain SG non-compliance, with 70% of cases stemming from employee notifications (the … [Read more...] about Tax update
Personal income tax cuts are law The government has finally legislated the tax cuts originally announced in the May 2016 Budget, so that the marginal tax rate of 37% now starts at $87,000. The following are the rates for adult residents for the 2016/17 income year (i.e., from 1 July 2016). Taxable income Tax on this income 0 – $18,200 Nil $18,201 – $37,000 19c for each $1 over $18,200 $37,001 – $87,000 $3,572 plus … [Read more...] about Important tax information
TAX UPDATE Pre-retirees: Avoid 'too good to be true' tax schemes The ATO has launched a new project called 'Super Scheme Smart', an initiative aimed at educating individuals about the potential pitfalls of 'retirement planning schemes', to keep them safe from risking their retirement nest egg. According to the ATO, individuals most at risk are those approaching retirement, including anyone aged 50 or over, looking to put significant amounts of money into retirement, particularly SMSF … [Read more...] about Tax update
When it comes to business, cash (flow) is king. As part of your yearly tax planning activities with your accountant or business adviser, you should be kept abreast of opportunities to capitalise on government measures designed to support the small business sector. The federal government’s $20,000 instant asset write-off scheme, introduced in the 2015 Federal Budget, allows businesses to immediately deduct the full value of every asset purchased (subject to conditions) to the value of $20,000, … [Read more...] about Are you eligible for the $20,000 instant asset tax write-off?
The ATO has advised that it is continuing its Contractor payments data-matching program. It will acquire data from businesses that it visits as part of its employer obligations compliance program during the 2016/17, 2017/18 and 2018/19 financial years. The data collected from businesses is used to identify contractors that may not be meeting their taxation obligations through: not registering correctly with the ATO; non-lodgment of returns; failing to report payments received; … [Read more...] about Contractor payments data matching program
The ATO has been working on ways to deliver a simpler business activity statement (BAS) to simplify account set-up, record keeping, BAS preparation and lodgment for agents and their clients, and make it less costly. To achieve this, several GST labels will be removed from the BAS, with small businesses only required to report: GST on sales (1A); GST on purchases (1B); and Total sales (G1). They will begin user testing from 1 July 2016 and a simpler BAS should be the standard … [Read more...] about New Simpler BAS on the way
The ATO is reminding taxpayers who earn income through the sharing economy that they have tax obligations they should consider. Examples of sharing economy services include: ride-sourcing – providing taxi travel services to transport passengers for a fare; renting out a room or a whole house or unit on a short term basis; renting out parking spaces; or providing personal services, such as web or trade services, or completing odd jobs, errands, deliveries, etc. As is usual … [Read more...] about Tax implications for the sharing economy
The ATO has stated it will be paying close attention to excessive interest expense claims, and incorrect apportionment of rental income and expenses between owners. The ATO is also looking at holiday homes that are not genuinely available for rent, and incorrect claims for newly purchased rental properties. An ATO spokesperson said that their ability to identify incorrect rental property claims is becoming more sophisticated due to enhancements in technology and the extensive use of … [Read more...] about ATO focuses on rental property owners
The ATO will begin cancelling the ABNs of approximately 220,000 trusts, where there is evidence those trusts are no longer carrying on an enterprise. Trust ABNs will be cancelled from February, where information available indicates that, for the last two years, the trust has not lodged BASs and/or trust income tax returns. The ATO will send a letter if an ABN has been cancelled, including the reason for the cancellation, and a phone number to ring to get the ABN reinstated immediately if … [Read more...] about Inactive Trusts – ABNs to be cancelled
The ATO will acquire details of real property transactions for the period of 20 September 1985 to 30 June 2017 from various sources, including state revenue offices, rental bond authorities and land title offices. Data items that will be obtained include names of landlords, lease periods, amounts of rental bond, rents payable, dates of property transfers, names of transferors and transferees and valuation details. It expects to match over 30 million records with its records of 11.3 … [Read more...] about ATO data matching on rental property transactions
Parliament recently passed legislation amending the taxation law to impose withholding obligations on the purchasers of certain Australian assets – generally property purchased from a non-resident. However, the changes will affect most purchases of property in Australia. The amendments impose a 10% withholding obligation on purchasers of 'Taxable Australian Real Property' (generally, this means an interest in Australian land) from certain foreign residents, as well as certain … [Read more...] about Buyers to withhold tax for ATO when buying certain properties
By Tim Sherlock, Senior Accountant With the Christmas break almost upon us, many employers will look to reward employees and thank clients with a gift or celebratory event… but beware of the possible Fringe Benefits Tax (FBT) and income tax implications of providing ‘entertainment’, such as Christmas parties. FBT and Entertainment Under the FBT Act, employers must choose how they calculate their FBT entertainment liability and most use either the ‘actual method’ or the ’50/50 … [Read more...] about Silly season tax traps
'myDeductions' online tool Tech-minded readers lamenting the lack of hoverboards can console themselves with a recently released online tool, myDeductions. It allows taxpayers to upload their receipts and information for deductions for the 2015/16 year simply by uploading a photo of a receipt. The deductions covered include work-related expenses, car expenses (it also includes a trip information calculator using Google maps) and other travel expenses, uniforms, self-education, and other … [Read more...] about Tax update
Xero’s Head of Security, Paul Macpherson, gives some tips to help all Xero users stay safe online. If at any time you have concerns about your security, contact us immediately, or email firstname.lastname@example.org. We’ve recently noticed an increase in the volume of phishing attacks and malware scams. This is an industry-wide problem for business software, online banking and other websites. Our security team has been tracking a small number of incidents—the result of phishing attacks, where a … [Read more...] about Xero users: How to stay safe online
Your important documents may be sent to the myGov secure website The ATO has a stated aim of reducing paper and instead sending refunds and activity statements electronically. This will be done securely via the myGov federal government website, where your documents will be stored and can be retrieved at any time. What is myGov? myGov is a fast, simple way to access government services online. A secure myGov account lets you link a range of Australian Government services with one … [Read more...] about ATO going paperless – how you may be affected
For 2014/15 individual income tax returns to be lodged this year, the ATO says it will be focusing on: unusually high work-related expense claims across all industries and occupations; expenses claimed that have already been reimbursed by employers; and claims for private expenses such as travel from home to work. The ATO’s ability to identify and investigate claims that differ from the ‘norm’ is improving each year at a rapid rate. Every return is scrutinised and it is … [Read more...] about ATO warns over-claiming is easier to detect than ever
Although all large and medium-sized employers were meant to be ready for SuperStream by 30 June this year, the ATO has advised that, for those who are not yet ready, it will extend that date by four months until 31 October 2015. SuperStream for small employers with 19 or fewer employers started from 1 July 2015. … [Read more...] about Employers – ATO extends SuperStream deadline
A recent risk review conducted by the ATO showed that up to 70% of employers that have Fringe Benefits Tax (FBT) obligations are non-compliant. This could leave businesses exposed to hefty fines and penalties. Read on to find out if you’re at risk… Fringe Benefits are benefits given to an employee by an employer in addition to their salary. The most common Fringe Benefits comes in the form of company cars given to employees to use which is garaged at or near the Employee’s place of residence … [Read more...] about What the FBT?!?!
Everyone’s looking to save a few extra bucks. Here are four ways you can reduce your taxable income (if you earn a salary) through Salary Packaging – and thus save yourself some cash. Novated Leasing. If you’re looking to buy a new car, consider Novated Leasing. This is an arrangement whereby your employer agrees to make the Lease payments on the Motor Vehicle and you make a Pre & Post Tax Contribution from your Salary to cover the costs of the Lease payments. Clear as mud? Suffice to … [Read more...] about Four ways to save cash through salary packaging
From fridges to moisturiser, there are hundreds of surprising items that are tax deductible. Depending on your industry, here’s what you could claim. With the Federal Government’s recent renewed focus on supporting small business through tax relief in the Budget [link to Budget article], we take a look at some of the lesser-known existing exemptions that many business owners aren’t claiming. So strap in as we enter the weird, wacky and wonderful world of business tax exemptions. Note that … [Read more...] about Weird And Wonderful Business Tax Deductions You Probably Didn’t Know About
The ATO will have an increased focus on rental property deductions this Tax Time. It will be paying closer attention to excessive deductions claimed for holiday homes in 2015, and will also be actively educating rental property owners about what they can and cannot claim. For example, the ATO will be writing to rental property owners in popular holiday locations, reminding them to only claim the deductions they are entitled to, for the periods the property is rented out or is genuinely … [Read more...] about ATO increases focus on rental property deductions
The ATO is again warning the public to be aware of a phone scam that is circulating, where fraudsters are intimidating people into paying a fake tax debt over the phone. The aggressive scam attempts to force people to pay a fake tax debt immediately by threatening arrest if they don’t comply. If you receive a call from the ATO we recommend you ask for the caller’s name and either call our office with the details or phone them back through the ATO’s switchboard on 13 28 69. … [Read more...] about ATO warns about aggressive phone scams
Cash flow is the lifeblood of any business. The highest profile measures in the recent Federal Budget focus on providing cash flow relief while stimulating consumption. But there are other ways that small businesses can take advantage of the budget, such as the ability to ensure you have the correct structure in place. 1. CASH FLOW MEASURES There are some key budget measures that aim to increase cash flow for small businesses. Importantly, to maximise these opportunities, you should … [Read more...] about How business owners can take advantage of the Federal Budget
We’ve all been there. Standing around the barbie, listening to someone bang on about how little tax they pay. But when you scratch the surface, you often find out the reason they’re not paying tax isn’t due to clever fiscal management… it’s because they’re not making any money. Paying tax is not necessarily a bad thing. For one, you get that warm inner glow from contributing to society. But more importantly, it means you’re making money. Now let me be clear – as the late great Kerry … [Read more...] about EOFY Planning – Why spending money to save on tax doesn’t make sense
Some of the areas that the ATO has stated it will be focusing on are: Work-related expenses: motor vehicle expenses for travelling between home and work; overnight travel; and the work-related proportion of use for computers, phones and other electronic devices. Rental property expenses: excessive deductions being claimed for holiday homes (deductions should be limited to the amount of income earned, or to the number of days actually rented out at a commercial … [Read more...] about Are you an ATO audit target?
The ATO has identified employers in the following industries as having a higher risk of not meeting their super obligations: child care services; building and industrial cleaning; and pubs, bars and taverns. The ATO is currently running an education campaign for business owners in these industries to help them better understand their super obligations. It will be undertaking audits from July 2015 of employers who continue to not meet super obligations for their employees. The … [Read more...] about ATO super crackdown – child care, building, cleaning, pubs
Are you an ATO audit target? The ATO has announced it's audit 'hit list' for this financial year: Work-related expenses: motor vehicle expenses for travelling between home and work; overnight travel; and the work-related proportion of use for computers, phones and other electronic devices Rental property expenses: excessive deductions being claimed for holiday homes (deductions should be limited to the amount of income earned, or to the number of days actually rented … [Read more...] about ATO on the warpath
A recent case before the Administrative Appeals Tribunal (AAT) involved a company that had withheld nearly $850,000 in pay as you go (PAYG) withholding that it had deducted from its employees' salaries and wages. It was obviously in some financial trouble, and failed to remit any of the monies to the ATO before being wound up. Company directors have a legal responsibility to ensure that their company meets its PAYG withholding and superannuation guarantee (SG) obligations. This doesn't … [Read more...] about Directors liable for company’s PAYG withholding
With the Christmas break almost upon us, many employers and businesses will be planning to reward employees with a celebratory party or event. However, you should be aware of the possible Fringe Benefits Tax and income tax implications of providing 'entertainment' (including Christmas parties) to employees and clients. FBT and Entertainment Under the FBT Act, employers must choose how they calculate their FBT entertainment liability and most use either the 'actual method' or the '50/50 … [Read more...] about Tax treatment of employee / client parties and gifts
An article in the Sydney Morning Herald recently caught my eye about a man suing the ATO for ruining his life. Bold move, I thought - assuming he probably contributed to the issue by not regularly lodging a return. But as I read on, I grew to really feel for the guy. In 2006 the ATO incorrectly issued Gary Kurzer a bill for $200,000 (the bill was later corrected to $8,554). It took 5 years of legal battles before the ATO finally acknowledged their mistake. In that time, he … [Read more...] about Sticking it to the man!
Superannuation Guarantee is now 9.5% - ensure your software is up-to-date (talk to us if you're unsure of your obligations) Issue PAYG W payment summaries to your employers AND send/transmit to the ATO If your Wages and Super is over $550,000 - ensure you attend to your annual Payroll tax obligations Review and complete your annual WorkCover certificate of wages (do you need to review your forward estimates?) … [Read more...] about REMINDER: Annual employer obligations you must attend to
With the Government determined to balance the budget, the ATO is reviewing the $17.7b uncollected taxes over 2012/13 (60% owed by small businesses). Talk to us to discuss strategies to ensure you have the cash flow available to meet your tax obligations. The Inspector General of Taxation (IGT) has announced a review of the ATO's approach to debt collection. The ATO has stated that more recent increases are a result of economic conditions and its assistance to viable businesses to … [Read more...] about ATO to get tough on outstanding $18b unpaid tax
Can you smell it? Yep, fear. As 30 June approaches, people start thinking about the dreaded 'T' word. Well, help is at hand. Below are a few tools that will not only help you maximise your deduction, they also provide some great tips to simplify and streamline your affairs: Get smart and save at 30 June: some things that all business owners and individuals should consider before and immediately after 30 June. Some will help streamline your affairs and make things more efficient, and … [Read more...] about Cool tools to help you at Tax Time