Superannuation system: Productivity Commission draft report
The Productivity Commission has released a draft report that recommends a range of changes to improve Australia’s superannuation system.
SMSF compliance: don’t slip up
With the self managed superannuation fund (SMSF) annual return lodgment deadline upon us, minds should have already turned to meeting compliance requirements. The 2016–2017 financial year includes a few twists and turns which trustees should factor in to avoid late lodgement.
Advisory Board to help clamp down on the black economy
The Government is establishing a new Advisory Board to support its reform agenda to disrupt the black economy.
Major ATO focus on work-related clothing and laundry this tax time
This tax time, the ATO will be closely examining claims for work-related clothing and laundry expenses.
GST property settlement online forms available
From 1 July 2018, purchasers of newly constructed residential properties or new subdivisions must pay the related GST directly to the ATO as part of the settlement.
Personal tax cuts now law
The legislation to enact the Government’s seven-year personal income tax reform plan, as announced in the 2018 Federal Budget, passed Parliament on 21 June 2018.
Business lending practices in spotlight at Royal Commission
Bank lending practices for small and medium enterprises (SMEs) were in the spotlight when the Financial Services Royal Commission (FSRC) held its third round of public hearings in late May. These hearings focused on the conduct of financial services entities providing credit to SMEs.
Government announces introduction of one-off 12 month amnesty for super guarantee underpayment
The government has announced that it is introducing a one-off, 12 month amnesty for historical underpayment of the super guarantee.
ATO assessments issued for excess super pension balances
The ATO has started issuing excess transfer balance (ETB) tax assessments to self managed super fund (SMSF) members, or their agents, who had previously received an ETB determination and rectified the excess.
Businesses, get ready: GST on low value goods
From 1 July 2018, GST will be imposed on the supply low value goods from outside of Australia to Australian consumers. Businesses need to be ready for this change.
Banking Royal Commission wraps up evidence on financial advice
The Banking Royal Commission has wrapped up its two weeks of hearings focused on financial advice.
Financial Complaints Authority takes shape
Minister for Revenue and Financial Services Kelly O’Dwyer has announced the authorisation of the new financial dispute resolution scheme, the Australian Financial Complaints Authority (AFCA), which will start accepting complaints from 1 November 2018
Government to increase civil penalties for white-collar crime
In response to recent Senate Economics References Committee and Australian Securities and Investments Commission (ASIC) Enforcement Review Taskforce reports, the Federal Government has agreed to increase the civil penalties for corporate and financial misconduct (white-collar crime), for both individuals and bodies corporate.
Residential rental property travel expense deduction changes
Recent changes to Australian tax law mean that individuals, self managed superannuation funds (SMSFs) and “private” trusts and partnerships can longer claim tax deductions for non-business travel costs related to their residential rental properties
CGT main residence exemption to disappear for non-residents
A person’s Australian tax residency status may be about to assume a whole new meaning.
Data matching finds taxpayers with unnamed Swiss bank accounts
More than 100 Australians have been identified as “high risk” and will be subject to ATO investigation because they have links to Swiss banking relationship managers who are alleged to have actively promoted and facilitated tax evasion schemes.
ATO closely examines work-related car expenses
The ATO is concerned about taxpayers making mistakes or deliberately lodging false claims for work-related car expenses, and has announced it will be closely examining claims for these expenses in 2018 tax returns.
$20,000 instant asset write-off for SBEs extended by 12 months
The Government will extend the current instant asset write-off ($20,000 threshold) for small business entities (SBEs) by 12 months to 30 June 2019. This applies to businesses with aggregated annual turnover less than $10 million.
2018 Budget - Tax compliance and integrity
Important announcements regarding Tax Compliance and Integrity from the 2018 Budget which may affect you.
2018 Budget - Business Taxation
Important annoucements relating to business taxation from the 2018 Budget announcement which may affect you.
2018 Budget - Superannuation
Important announcements from the 2018 budget regarding superannuation which may affect you.
Personal tax rates: staged seven-year reform plan starting from 2018–2019
In the 2018–2019 Budget, the Government announced a raft of new measures relating to personal taxation, please find the important announcements below which may affect you.
Single Touch Payroll reporting: ATO urges employers to get ready
The ATO is urging employers with 20 or more employees to start preparing now for the Single Touch Payroll (STP) reporting regime, which will be mandatory from 1 July 2018
Super guarantee: ATO compliance approach to non-payment
The ATO has released a fact sheet explaining its compliance approach to employers who fail to meet their superannuation guarantee (SG) obligations.
Superannuation rates and thresholds for 2018–2019
We summarise some of the key superannuation rates and thresholds for the upcoming financial year:
Goods and services tax on low-value imported goods
From 1 July 2018, goods and services tax (GST) will apply to some offshore supplies of goods valued at $1,000 or less that are purchased by consumers and brought into Australia.
Capital gains tax withholding: updated information for trustees
The foreign resident capital gains tax (CGT) withholding regime requires purchasers of Australian property to withhold an amount from the purchase price (for remission to the ATO) if the vendor is a foreign resident.
ATO releases latest small business benchmarks
The ATO has released its latest small business benchmarks, providing over 100 different industries with average cost of sales and average total expenses.
"Transition to retirement" pensions to become simpler
In welcome news for superannuation members, the government has announced plans to simplify the payment of transition to retirement income streams (TRISs) so that they will always be permitted to automatically revert to a dependant upon the death of the original pensioner
Court finds pay-as-you-go amounts "withheld" from salary payments
The Federal Court has ruled that pay-as-you-go (PAYG) amounts were “withheld” from a taxpayer's salary payments so that she was entitled to a tax credit, despite the amounts never being remitted or notified to the ATO by her employers.
ATO Embarking on e-Audits
The ATO has recently published information about the “e-Audit” technology it uses as part of its tax compliance activities.
Windfarm grant was an assessable recoupment
The Full Federal Court has dismissed a taxpayer’s appeal and held that a Commonwealth grant of almost $2.5 million for the establishment of a windfarm was an assessable recoupment (Denmark Community Windfarm Ltd v FCT [2018] FCAFC 11).
ATO now issuing excess transfer balance determinations
The ATO has advised that is now sending out excess transfer balance (ETB) determinations to individuals who have exceeded their superannuation transfer balance cap and not taken steps to remove the excess amount.
Social security means testing of lifetime retirement income streams
The Department of Social Services (DSS) has released its proposed means testing rules for pooled lifetime retirement income streams.
Corporate tax avoidance: latest ATO targets
The ATO has provided an update on its latest focus areas and the compliance projects it is undertaking to reduce corporate tax avoidance.
Moving to combat the black economy
The Black Economy Taskforce was established in 2017 “to develop an innovative, forward-looking whole-of-government policy response to combat the black economy in Australia, recognising that these issues cannot be tackled by traditional tax enforcement measures alone"
Bill to change residential property GST arrangements
A Bill has been introduced into Parliament that, when passed, will require purchasers of new residential premises and new subdivisions of potential residential land to pay the goods and services tax (GST) on the purchase directly to the ATO as part of the settlement process from 1 July 2018.
Changes to small business CGT concessions
Treasury has released draft legislation to make sure that taxpayers will only be able to access the small business CGT concessions for assets that are used (or held ready for use) in the course of a small business or are an interest in a small business
Bill to implement housing affordability CGT changes
As part of the 2017–2018 Budget, the Federal Government announced a range of reforms intended to reduce pressure on housing affordability
Guidance for SMSFs on transfer balance reporting
The ATO has released further guidance on when SMSFs need to report events affecting their members’ transfer balance accounts (by making a transfer balance account report, or TBAR) for the purposes of the $1.6 million pension cap.
Superannuation integrity changes
The Government has released a consultation paper and exposure draft legislation to give effect to the following superannuation taxation integrity measures it announced in the 2017–2018 Federal Budget:
Tax consequences of trust vesting
The ATO has issued a long-awaited ruling on trust vesting, including changing a trust’s vesting date and the CGT and income tax consequences of vesting
Taxing employee share scheme dividend equivalent payments
The ATO has made a new determination that dividend equivalent payments made under an employee share scheme (ESS) are assessable to an employee as income when they receive the payment for or in connection with services they provide as an employee.
Fringe benefits tax: employees’ private use of vehicles
The ATO has issued guidance for employers on determining an employee’s private use of a vehicle.
Disclosing business tax debt information to credit agencies
The Federal Government has released draft legislation and a draft legislative that will authorise the ATO to disclose a business’s tax debt to registered credit reporting bureaus.
ATO guidelines: profit allocation within professional firms
The ATO has become aware that its guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements, including the use of related-party financing and self managed superannuation funds (SMSFs).
Housing affordability measures now law
Legislation has been passed to implement the 2017–2018 Federal Budget housing affordability measures. The following will start on 1 July 2018:
5 money mindsets that hold you back
What’s holding you back from taking control of your financial future? Discover the five mind tricks that can stop you from achieving financial success and what you can do to avoid them.
Super assets total $2.3 trillion at June 2017
APRA has released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the June quarter 2017.
First Home Super Saver Scheme – draft legislation
Treasury has released draft legislation to implement the 2017–2018 Federal Budget superannuation measures aimed at improving housing affordability by the establishment of the First Home Super Saver Scheme (FHSSS).
Segregated current pension assets
A warning has been issued from the Actuaries Institute that tens of thousands of self-managed super funds (SMSFs) could be at risk of incorrectly claiming exempt current pension income (ECPI) under the ATO's approach to segregated current pension assets.
Super system reforms
Australian Prudential Registration Authority (APRA) has written to RSE licensees setting out its approach to the Government’s super system reforms aimed at enhancing APRA's prudential powers to improve member outcomes.
GST: simplified accounting for food retailers
The ATO has released a draft determination on the choice available to you, if you are a food retailer, to use a simplified accounting method (SAM) to help you to work out your net amount by estimating your GST-free sales and GST-free acquisitions of trading stock
New downsizing cap available
If you are aged 65 or over, your home is your main residence for CGT purposes and you have owned it for a minimum of ten years, you could benefit from new draft legislation.
Activity statements can now be lodged in advance
The ATO says nil activity statements can be generated early in some cases. Under normal bulk processes, activity statements generally issue from the ATO by the end of the month.
ATO increases its scrutiny on work-related expenses
Despite wide publicity on the issue, the ATO has reminded taxpayers that it is increasing its scrutiny on work-related expenses. Last year over 6.3 million people made a work-related expense claim for clothing and laundry expenses, totaling almost $1.8 billion.
Further guidance for tax losses via a new “similar business” test
The ATO has released a draft guideline on how they will apply the new “similar business test” to supplement the existing “same business test” used for testing whether a company can utilise an earlier year tax loss.
Foreign resident CGT withholding: early recognition of tax credit
The Commissioner has made a determination to modify the time at which the vendor is entitled to a tax credit in respect of an amount withheld under the foreign resident CGT withholding rules.
Budget changes to foreign resident CGT: draft legislation
Draft legislation has been released to implement 2017–2018 Federal Budget measures relating to the CGT liability of foreign residents.
Bill to increase Medicare levy
The Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 has been introduced to implement the Government's 2017–2018 Budget announcement to increase the Medicare levy by 0.5% to 2.5% from 1 July 2019 in order to help finance the National Disability Insurance Scheme (NDIS).
Companies should consider reporting tax liabilities: AASB
Sometimes it’s unclear how tax law applies to a company transaction or circumstance and how the ATO will treat it. New guidance from the International Financial Reporting Standards Interpretations Committee (IFRIC) explains how companies should reflect this uncertainty in their accounting for income taxes.
ASIC takes action on super fund disclosures
Under Australia’s superannuation law, super funds must disclose transparency information on a website and keep it up to date at all times.
Tax assessments confirmed for undisclosed business income
The Administrative Appeals Tribunal has ruled that the ATO was correct to issue tax assessments of $3.7 million and penalties of $3.3 million to a business taxpayer that had underreported its income and failed to lodge several years worth of tax returns. The taxpayer, PSI Pty Ltd, argued that it owned and rented out several Sydney properties, but did not engage in other business activities or receive the significant amounts of income that the ATO had assessed to it.
Federal Court rules on PAYG avoidance
The Federal Court and Administrative Appeals Tribunal have agreed with the ATO that a business, Sunraysia Harvesting Contractors Pty Ltd, was making use of a “sham” arrangement with three other companies to avoid pay as you go (PAYG) and payroll accounting responsibilities
Tax debts: setting up a payment plan
Does your small business have a tax debt? The ATO encourages you to get in touch to set up a payment plan. If the debt is $100,000 or less, you can use the ATO’s self-help service to easily arrange paying by instalments.
Asset write-offs
Small businesses with a turnover of less than $10 million can get an immediate deduction for assets that cost up to $20,000 each in their 2016–2017 return. The $20,000 threshold now applies until 30 June 2018.
Working holidaymakers and tax returns for 2017
If your business employs working holidaymakers – or you’ve been one yourself this year! – you need to know about the “backpacker tax” changes that came into effect from 1 January 2017.
Employee travel expense deductions
The ATO has also released new guidance on work-related travel deductions. To claim for transport or other employee travel expenses (like accommodation and meals) in your tax return, you must have incurred the expenses as part of gaining or producing your taxable income. Private and domestic travel expenses, including the costs of your ordinary home-to-work travel, aren’t claimable.
Work-related expense claims under scrutiny
Will you claim work-related expenses on your tax return this year? The ATO now uses real-time data to compare people’s tax returns with others in similar occupations and income brackets. This year it’s focused on identifying higher-than-expected claims for expenses related to work vehicles, travel, internet and mobile phones, and self-education, and may even check people’s work deduction claims with their employers.
What can I claim against my tax?
Please take just 2 minutes to read this article. We’ll explain:
• Deductions you can claim
• The importance of a fantastic tax accountant
• The “tax trap” you need to avoid
• Links to more information about specific deductions
Improve the transparency of tax debts
The Government has announced that it will allow the Australian Taxation Office (ATO) to disclose tax debt information to registered credit reporting bureaus (CRBs). The ATO will only be able to disclose tax debt information of a business where certain criteria are met.
Are you using the correct award rates?
As we are now well into the new financial year, it’s time to ensure that you’re paying up to the correct award rates.
Here is a quick how-to-guide that we've put together to make sure you are up to date with the current rates!
New draft GST guidelines issued
Draft Law Companion Guideline LCG 2017/D4 (the Draft) deals with how the ATO intends to apply the Netflix and low-value imported goods measures to supplies made through electronic distribution platforms (EDPs).
“Netflix” tax: who is an Australian consumer?
From 1 July 2017, the supply of services, digital products or rights are connected with Australia (and so potentially liable to GST) if made to an Australian consumer by an overseas-based supplier. This is referred to as the digital import or “Netflix tax” rules.
Single Touch Payroll operative for early adopters
Single Touch Payroll (STP) is here. It had a “soft” or voluntary start on 1 July 2017. From that date, employers may choose to report under STP. For those who qualify (ie employers with 20 or more employees), STP will be mandatory from 1 July 2018.
SMSF annual return: key changes for 2016–2017
The ATO has released the 2017 self-managed superannuation fund (SMSF) annual return and instructions.
Super reforms: changes to TRIS, CGT relief, pension cap and LRBA integrity rules
The Treasury Laws Amendment (2017 Measures No 2) Act 2017 makes a range of technical amendments to the super reform legislation.
Work-related deductions denied: lack of documenting evidence
A pipe fitter has been denied deductions by the Administrative Appeals Tribunal (AAT) for work-related expenses. The AAT disallowed the claims because the taxpayer was unable to produce adequate documentary evidence.
ATO update on Manage ABN Connections
The ATO says feedback from tax professionals on the Manage ABN Connections identified that further work is required to meet their needs.
Instant asset write-off extended for small business entities
The Treasury Laws Amendment (Accelerated Depreciation For Small Business Entities) Act 2017 extends the period during which small business entities (SBEs) can access accelerated depreciation. The extension is for 12 months, ending on 30 June 2018.
Tax cut for small businesses: ATO will amend returns
For the 2016–2017 income year, the company tax rate for small businesses decreases to 27.5%. Companies with turnover of less than $10 million are eligible for this rate. The maximum franking credit that can be allocated to a frankable distribution has also been reduced to 27.5% for these companies.
Your 2017 EOFY Tax Minimisation Tips
With another financial year finishing, there are many obligations that business owner's need to consider and action.
Some of these action items will help to minimise your tax. We have outlined these points below to assist you.
Is it tax deductible?
Everyone wants to pay less tax right? To do that you need to know what you can claim… and what you can’t.
2017-2018 Federal Budget Update
In prior years, there were many changes to superannuation and small business taxation. This year’s Budget only had a few changes in these areas.
Depreciation – the tax deduction lots of property investors forget to claim.
There are lots of property related tax deductions that all investors claim: council rates, water rates, property management fees, repairs. But depreciation is one that many people don’t even know about.
Do you have your tax debts under control?
From 1 July 2017, a new tax measure will come into play for small businesses, and we’re here to help prepare you for this tax change.
What every employer needs to know about fringe benefits
On 31 March 2017, the Fringe Benefits Tax (FBT) year ends. The ATO will be reviewing whether all employers who should be paying FBT are, and that they are paying the right amount.
Tax Planning Starts Now
There are 5 key things all business owners must consider right now. Some of them are brilliant wealth creation ideas. Please read on…
2017 / FEB: ATO develops work-related expenses risk profiles
The ATO has developed work-related expenses risk profiles to help it identify how work-related expense deduction amounts compare for similar taxpayers.
2017 / FEB: Onus on taxpayers to show no fraud or evasion: Full Federal Court
Several taxpayers have been unsuccessful in their appeals to the Full Federal Court in which they challenged tax assessments that dramatically increased their assessable income for certain income years.
2017 / FEB: No disclaimer of trust interest: unsuccessful appeal
A beneficiary of two trusts whose assessable income was increased from some $70,000 to some $13 million in light of her entitlement to distributions from the trusts has been unsuccessful in claiming on appeal that she had “disclaimed her interests” in the trusts.
2017 / FEB: Admin penalties of 75% for failing to lodge FBT returns
The AAT has confirmed that 75% administrative penalties were rightfully imposed on several companies for their failure to lodge FBT returns over a four-year period.
2017 / FEB: New ATO data-matching program: ride-sourcing
The ATO has announced a new data-matching program involving ride-sourcing providers. Under the program, the ATO will acquire data to identify individuals who may be engaged in providing ride-sourcing services during the 2016–2017 and 2017–2018 financial years.
2017 / FEB: Taxation ruling on commercial website deductibility
A new taxation ruling from the ATO sets out the tax deductibility of expenditure incurred in acquiring, developing, maintaining or modifying a commercial website for use in carrying on a business.
2017 / FEB: Taxpayer failed to prove that payments were “loans”
In a recent case, the Full Federal Court has found that several taxpayer companies had not discharged the onus of proving that assessments the Commissioner of Taxation issued to them were excessive.
2017 / FEB: ATO priority on settling cases – but not at any cost
In a new tax determination, the ATO states that a beneficiary is not entitled to a bad debt deduction for an amount of unpaid present entitlement (UPE) that the beneficiary purports to write off as a bad debt.
Time to take that holiday
‘There are just not enough hours in the day!’ you cry with a desperation rivalling Tom Hanks’ Wilson-I’m-Sorry and fall to your knees in despair.
Okay, maybe that’s a little dramatic. But if you’re a business owner, I’m sure that sentiment or something like it has at least crossed your mind before. Maybe more than once.
And when you’re working crazy hours six or seven days a week just to get everything done, sometimes a deserted island with only a volleyball for company doesn’t actually sound so bad...