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Cash In Hand Compliance Concerns For Businesses & Individuals Alike

Posted on June 20, 2022 by admin


If your business earns a part of its income in cold, hard cash, be prepared to have the Australian Taxation Office’s eyes on you this tax time. To protect honest, compliant Australian businesses, the Australian Taxation Office (ATO) has placed a strong emphasis on targeting the cash and hidden economy (known to be a part of the shadow economy). For example, they may be keeping a close eye on a sole trader electrician, whose reported earnings over the financial year versus their actual spending isn’t adding up. Or perhaps you have a side hustle (such as freelancing or selling plants at the market), and earn some cash-in-hand alongside your full-time job’s income. The ATO will be watching these businesses and individual traders that deal predominantly in cash, with a focus on those that: Fail to meet super or employer obligations, and fail to register for GST or lodge activity statements. Operate outside regular small business benchmarks specific to their industry. Show discrepancies between what they have reported and ATO collected data relating to electronic payments. Operate and advertise as cash-only. Income does not correlate with the lifestyle of the business owner, i.e., assets and spending habits exceed what is expected […]


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ATO Warns Against GST Fraud Attempts

Posted on May 30, 2022 by admin


Registering for an ABN and applying for GST refunds when you don’t own a business or are not eligible is fraud. The Australian Taxation Office (ATO) has identified a significant number of GST refund fraud attempts, totalling an estimated $850 million to around 40,000 individuals. This fraud involves predominantly participants inventing fake businesses to claim false refunds. Sophisticated risk models deployed by the ATO, coupled with intelligence received from banks including through the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia, identified a recent spike in suspicious refunds. Currently, the ATO has stopped $770 million in payments from being issued. The fraud involves offenders inventing fake businesses and Australian Business Number (ABN) applications, many in their own names, then submitting fictitious Business Activity Statements in an attempt to gain a false GST refund. Currently, this fraudulent activity has been circulating as online advertising and content, particularly on social media and their platforms.  Reminders For The Community The ATO does not offer loans. If you see someone advertising a way to get a loan from the ATO, it’s not legitimate. The ATO does not administer COVID disaster payments. If you are not operating a business, you do not need an […]


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Your Work-Related Tax Deduction Checklist For This Year’s Tax Return Made Easy

Posted on May 10, 2022 by admin


The end of the financial year is coming up next month (30 June), and you may be looking for ways in which you could make tax savings in this year’s tax return. This could be through tax deductions, expenses that you could make now for your work purposes or even with tax offsets introduced by the government. Whatever your tax situation, we’re equipped and ready to help you navigate the tricks and traps of income tax returns. Upon completing a tax return, individuals are entitled to claim deductions for expenses that are directly related to their income. These can come in a variety of forms, but must usually be work-related to be claimable.  There are three requirements individuals must meet to be able to claim a work-related deduction: the individual must have spent their money and not be reimbursed for it the expense must be related to their job and; there must be a record, like a receipt, to be able to prove it. If an expense was for work and private purposes, individuals can claim a deduction for the work-related portion. Here are some common types of deductible expenses taxpayers like employees and rental property owners can claim this […]


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Car Parking Benefit Readdresses FBT Definition, Employers To Benefit

Posted on April 18, 2022 by admin


It’s getting closer to the time that FBT returns need to be lodged, so it’s important to understand that there may be a change to the FBT liability of your business when it comes to one employee benefit. Car parking as an FBT benefit is provided on a particular day when, between 7.00am and 7.00pm: a car is parked at a work car park for the minimum parking period; an employee uses the car in connection with travel between their place of residence and primary place of employment at least once on that day; the work car park is located at or in the vicinity of the primary place of employment, on that day; a commercial parking station is located within a one-kilometre radius of the work car park used by the employee; the lowest representative fee charged by any commercial parking station for all-day parking within a one-kilometre radius of the work car park exceeds the car parking threshold; the parking is provided to the employee in respect of their employment, and the parking is not excluded by the regulations. However, a car parking benefit provided in respect of an employee is exempt where: the car is not parked […]


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COVID Deductions Rely On Work-Related Purposes (So Here’s What You Might Be Able To Claim)

Posted on March 28, 2022 by admin


People across different industries may have different items for work that they can claim a deduction on their tax returns for, but this season may see a few common occurrences across individual tax returns for 2022. On your individual tax return this year, you may notice a few expenses pertaining to COVID-19-related purchases, such as masks, hand sanitisers and RATs tests that you may be able to claim (depending on your circumstances). These deductions may have specific conditions and requirements that must be met, and failure to comply may result in the Australian Taxation Office disallowing these claims. Masks and hand sanitiser are claimable deductions for those who have required them to work in their industry (e.g. retail, hospitality, education). This is because they can be claimed as PPE (Personal Protective Equipment), but they must be directly connected to how you earn your income (for example, many State governments mandated at various points last year that hospitality workers were required to wear masks while working). If your place of employment did not provide this PPE to you, and you had to purchase it yourself, it may be claimable. Rapid Antigen Tests (RATs) however, must be purchased for a work-related purpose. […]


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Common GST Mistakes That You Might Be Making In Your IAS

Posted on March 7, 2022 by admin


GST is an area that commonly has mistakes made in it – mistakes that can be costly and require additional measures to correct it if they aren’t caught in time. Many small business owners continue to make errors when claiming GST credits in their GST returns or Business Activity Statements. A vast majority of these errors are easily avoidable and often relate to the over-claiming of GST credits. Here are the top ten common GST mistakes that can be made (and what you might be encountering yourself). Residential rental property: Incorrectly claiming GST credits on expenses relating to residential rental properties where the entity is registered for GST.  Bank fees: Generally, annual fees, monthly fees and loan establishment fees are input-taxed, and therefore, there is no GST to claim. However, GST is charged on credit card merchants’ fees and can be claimed. Private expenses: GST is not claimable on private expenses such as personal loans, director fees and drawings etc.  Interest: Interest paid on loan or chattel mortgage repayments or credit card payments does not incur GST, and cannot be claimed. The total cost of a business insurance policy: Insurance policies usually include stamp duty (which is GST-free), however, the […]


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End Of FBT Year Is Approaching – Do You Know What Benefits You’re Giving Your Employees?

Posted on February 14, 2022 by admin


As a part of your employees’ employment contracts, do they receive benefits such as a car space, gym membership or even a car to drive? These are what’s known as fringe benefits, which is a ‘payment’ to an employee that takes a different form to salary or wages. This incurs a specific kind of tax separate from income tax known as fringe benefits tax, which is based on the taxable value of the fringe benefits provided. FBT applies even if the benefit is provided by a third party under an arrangement with the employer. Knowing what is and what isn’t deemed as a fringe benefit will assist you in working out what you might provide to your employees as a benefit for working with you. Examples Of Items That Are Fringe Benefits Allowing an employee to use a work car for private purposes Giving an employee a discounted loan Paying an employee’s gym membership Providing entertainment by way of free tickets to concerts Reimbursing an expense incurred by an employee, such as school fees Giving benefits under a salary sacrifice arrangement with an employee. Examples Of Items That Are Not Fringe Benefits The following are not fringe benefits: Salary and […]


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Business Activity Statements – How To Take The Sting Out Of The Quarterly Payment

Posted on January 24, 2022 by admin


Been hearing a lot about business activity statements, and feeling more than a little pressure? Kicking off the new year for your business shouldn’t be shrouded in the darkness that can be a looming BAS. But how can you be certain that your business is prepared? To start with, demystifying the BAS might alleviate some of that anxiety and pressure your business may have been facing. Essentially, a business activity statement (BAS) is a government form that all businesses must lodge to the Australian Tax Office (ATO). All businesses registered for GST need to lodge a business activity statement (BAS). This can be done with the assistance of a registered tax agent or BAS agent. A BAS is a summary of all the business taxes you have paid or will pay to the government during a specific period of time. You may lodge your BAS monthly, quarterly or annually (depending on the size of your business you may not have the annual or quarterly option) or may do so through your tax/BAS agent. When lodging your BAS, you need to include these payments within it: Goods and services tax (GST) Pay as you go (PAYG) income tax instalment Pay as […]


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Can Christmas Parties Be Tax-Deductible?

Posted on December 6, 2021 by admin


While your business may not necessarily be planning an extravagant bash after the events of this year, a Christmas party may be on the menu for your hard-working employees. Planning out your Christmas party in a COVID-safe manner with a little knowledge of the tax deductions you might be able to claim back can make the giving a little sweeter this year. The Venue You can take advantage of the $300 (including GST) minor benefit and exemption rule to hold a Christmas function for your current employees and their spouses. To do so, the party would need to be held on the premises of the business, and during a business day. If your costs are below $300 per person, FBT will not be incurred but you will not be able to claim tax deductions or GST credits. However, if you provide benefits to your employees over $300, it will incur fringe benefits tax (FBT). This means if the Christmas party that you hold is priced at over $300 per person (for the cost of food and drink consumed by employees and spouses) at your in-house party, you will incur and need to pay FBT on the expenses of your employee’s […]


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What Happens To My Tax If I Have More Than One Job?

Posted on November 18, 2021 by admin


Are you in the process of getting a second job to supplement your income? Or have you already received one, and are now simply confused about what you are being taxed on? Gaining employment in a second position or job means that you may have a higher amount of tax withheld from your pay. Though this might sound daunting, it is simply because you are already claiming the tax-free threshold from another paying job. The tax-free threshold in Australia is $18,200. If you are claiming your tax-free threshold, you are not paying tax on the first $18,200 earned in each income year. The tax-free threshold is equivalent to earning: $350 a week $700 a fortnight $1,517 a month Withholding tax at a higher rate means that you are less likely to have a tax debt at the end of the income year You may be receiving pay from two or more payers at the same time if you: have two or more jobs have a regular part-time job and receive a taxable pension or government allowance. In these instances, your new employer will give you a Tax file number declaration to complete. Centrelink is also a payer who will give […]


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Cash In Hand Compliance Concerns For Businesses & Individuals Alike

June 20, 2022

If your business earns a part of its income in cold, hard cash, be prepared to have the Australian Taxation Office’s eyes on you this tax time.

To protect honest, compliant Australian businesses, the Australian Taxation Office (ATO) has placed a strong emphasis on targeting the cash and hidden economy (known to be a part of the shadow economy).

For example, they may be keeping a close eye on a sole trader electrician, whose reported earnings over the financial year versus their actual spending isn’t adding up. Or perhaps you have a side hustle (such as freelancing or selling plants at the market), and earn some cash-in-hand alongside your full-time job’s income.

The ATO will be watching these businesses and individual traders that deal predominantly in cash, with a focus on those that:

When out visiting cash-only businesses, the ATO will be working in unison with local authorities and industry associations to ask questions and discuss:

If the ATO comes across a business that is doing the wrong thing or failing to meet its obligations, they have a duty to take action. This may result in the business facing an audit and possible prosecution.

Its imperative that you are fulfilling your obligations and know where you stand, particularly with;

If you do make a mistake upon completing your tax return but make a voluntary disclosure detailing your errors, the ATO will work with you to rectify this and create a solution.