CALL US: (07) 3367 0999 | EMAIL US:

What Are The Consequences Of Improperly Lodged Tax Returns?

Posted on May 4, 2021 by admin


With tax return season approaching quickly this year, you may have already started looking into lodging your income tax return. Ensuring that your details are correct and that any information about your earned income from the year is lodged is the responsibility of the taxpayer and their tax agent. However, if during this income tax return process the tax obligations of the taxpayer fail to be complied with, the Australian Taxation Office has severe penalties that they can enforce. Australian taxation laws authorise the ATO with the ability to impose administrative penalties for failing to comply with the tax obligations that taxpayers inherently possess. As an example, taxpayers may be liable to penalties for making false or misleading statements, failing to lodge tax returns or taking a tax position that is not reasonably arguable. False or misleading statements have different consequences if the statement given results in a shortfall amount or not. In both cases, the penalty will not be imposed if the taxpayer took reasonable care in making the statement (though they may still be subject to another penalty provision) or the statement of the taxpayer is in accordance with the ATO’s advice, published statements or general administrative practices […]


Keep Reading...


The Sharing Economy And Your Tax Return – How You Could Be Affected

Posted on April 19, 2021 by admin


In Australia any income earned by a job may be considered to be taxable income. Those who receive their income via the sharing economy are no exception to the rule. In fact, there can be further complications that result from incorrect understandings of how the income tax and goods & services tax may apply to those individuals. The sharing economy is a socio-economic system built around sharing resources, often through a digital platform like a website or an app that others can purchase the right to use for a fee. Popular sharing economy services and activities that could be subject to income tax include Being a Driver for popular ride-sharing/ride-sourcing services and obtaining fares for those services Renting out a room, whole house or a unit on a short term basis Sharing assets (such as cars, parking spaces, storage space or personal belongings) through platforms such as Camplify, Car Next Door, Spacer, Toolmates or Quipmo. Creative or professional services provided by individuals through online platforms to fill a need of others (also known as the gig economy) Here are some of the things you need to bear in mind about the income and goods & services tax for these popular […]


Keep Reading...


Interest On Your Home Loan Could Be Tax-Deductible

Posted on April 12, 2021 by admin


It’s a simple, step-by-step process used by many Australians to increase their income. Borrow money from a financial institution, invest in a second property and pay off the loan with the profit accrued from the investment property (ie. rent from tenants). But did you know that the interest on a home loan for the purchase of an investment property can be claimed as tax-deductible? To clarify – claiming a tax deduction on the interest of a loan can only be used on the loan that was used to purchase the investment property. It also must be used to earn income, because a property that is solely residential isn’t eligible for any tax deductions (except in certain situations where the residence may be used to produce income, like home business or office). Here are a few examples of when tax deduction claims on your property are not allowed: If the secured property is being used for living as a primary residence, and no income is made from it. Refinancing your investment loan for some other purpose (like buying another property). Using the loan for a private purchase, other than the purchase of a home. If the investment property is a holiday […]


Keep Reading...


Easy ways for your Small Business to Stay ahead at Tax Time.

Posted on March 19, 2021 by admin


As an employee in a business, often there are perks that can come with the job. A company car, fuel money, perhaps some technology to help make things easier. Small business owners however have to be a lot more mindful of how they use the money from their business. Any money or assets that a business has earned or possesses, is solely the property of that business. That means that there are numerous issues that can arise from dipping into these company funds. As a business owner, it’s important to keep records and correctly report transactions if using company money or assets (e.g, company car). These can include instances such as taking money out of your company for yourself or your family receiving money from it (for example, as a director, shareholder or an associate) using your company’s assets for private purposes. For small businesses, this can be easily done through: Salary, wages or director’s fees Repayments of a loan you have previously made to the company A fringe benefit, such as an employee using a company car Dividends (formal distribution of the profits) A loan from the company If a business does not report correctly or keep appropriate records […]


Keep Reading...


What you need to know about luxury car tax

Posted on February 25, 2021 by admin


Luxury car tax or LCT is a 33% tax on cars that have a value (including GST) above the set threshold. However, the tax is only on the value which is above the threshold. Businesses and individuals that sell or import luxury cars are required to pay LCT. You can make LCT payments in instalments or annually. If you choose to report your payments in instalments, they will be included in your GST instalments. If you choose to pay GST annually, then you don’t need to worry about reporting monthly or your quarterly BAS. You may be able to defer paying LCT by quoting your ABN. You are able to do this if you are only going to be using your car to: Hold it for trading stock (doesn’t include holding it for hire or lease) Carry out research and development for the car’s manufacturer Export it GST-free If and once you stop using your car for the above purposes, then you will need to start paying LCT.


Keep Reading...


Records you need to keep on rental properties

Posted on February 18, 2021 by admin


When you own a rental property, keeping records is important. These will help you meet tax obligations. Generally, only individuals with their name on the title deed declare income and claim expenses. Remember that the records must be kept in English or should be easily translatable into English, and kept for a minimum period of 5 years. The records you need to keep include: Dates and costs of buying the property: These will help work out any capital gain or loss when the property is disposed of – the date entered into the contact is the purchase date, not the settlement date. Any rent and rent-related income: This will be required to report tax return. Expenses associated with the property: These are important to claim deductions you may be entitled to. These records should include the name of the supplier, the amount of the expense, nature of the goods or services, the date the expense was incurred, date of the document Significant changes: These include repairs or improvements or partial or all sale of the property – the cost of repairs and improvements should be kept separate from depreciation costs so that deductions and capital gains and losses can be […]


Keep Reading...


The amounts you don’t need to include as income

Posted on February 15, 2021 by admin


Amounts which are not classified as income are split into 3 categories. Exempt income This is income that you do not pay tax on, although, some exempt income may be taken into account when determining: Tax losses of earlier income years that you can deduct Adjusted taxable income of dependants Some examples include certain Government pensions, certain Government allowances, certain overseas pay, some scholarships, etc. Non-assessable, non-exempt income This is also income that you don’t pay tax on – it does not affect your tax losses. Some examples include the tax-free component of an employment termination payment (ETP), genuine redundancy payments, super co-contributions, etc. Other amounts There are also other amounts that are not taxable. Some examples include: Rewards or gifts received on special occasions, prizes won in ordinary lotteries, child support and spouse maintenance payments, etc.


Keep Reading...


Tax treatment of insurance payments for damaged or destroyed property after a disaster

Posted on February 4, 2021 by admin


The Australian weather can be unpredictable, resulting in intense weather conditions. Bushfires, severe storms or floods can cause personal properties and assets a lot of damage. In the case that this does occur, individuals need to determine the tax treatment of any insurance payouts or relief payments that they may receive. Usually, individuals are unlikely to experience tax consequences for payments for personal property or assets. Personal property or assets include your home and household assets. On the other hand, if an individual’s income-producing assets incur damage, then they will need to determine the proper tax treatment of the payouts or relief payments that they receive and the costs involved in repairing or replacing the assets. If you have been working from home and using personal assets to produce income (such as a personal laptop you are repurposing) then determining which tax treatment applies could get complicated. You may have to talk to the ATO or an advisor to clarify the specificities of your situation.


Keep Reading...


Trustees and beneficiaries registering for tax in trusts

Posted on January 28, 2021 by admin


Trusts have their own tax file number (TFN) that should be used to complete tax returns. Trusts are also able to apply for an Australian business number (ABN) on the condition that the trust is carrying on an enterprise. If a trustee applies for a TFN or ABN, then this is in the capacity of a trustee and is separate from any other registration the trustee may require for other capacities. Trustees The trustee is responsible for managing the tax affairs associated with the trust. This includes registration of the trust in the tax system, lodgement of trust tax returns, as well as paying certain tax liabilities. Beneficiaries For beneficiaries, their share of the trust’s net income is included in their tax returns. Further, payments on the expected tax liability may need to be made, for which the pay as you go (PAYG) instalment system can be used.


Keep Reading...


Taxation of your unused leave when leaving a job

Posted on January 21, 2021 by admin


When your job ends, whether there has been a termination of employment or redundancy you will receive a payment for unused leave. This payment will be taxed differently from your normal income. The taxation will vary depending on the reason why you left the job and any unused entitlements that have been accrued over your employment (long service leave or sick leave). Lump sum payments that you receive for unused annual leave or unused long service leave are taxed at a lower rate than other income. These lump sum payments will appear on your income statement or payment summary as either ‘lump sum A’ or ‘lump sum B’. These payments may also be taxed differently if you lost your job as a result of Covid-19.


Keep Reading...


Business
advice

taxation
planning

compliance
services

News

What Are The Consequences Of Improperly Lodged Tax Returns?

May 4, 2021

With tax return season approaching quickly this year, you may have already started looking into lodging your income tax return. Ensuring that your details are correct and that any information about your earned income from the year is lodged is the responsibility of the taxpayer and their tax agent. However, if during this income tax return process the tax obligations of the taxpayer fail to be complied with, the Australian Taxation Office has severe penalties that they can enforce.

Australian taxation laws authorise the ATO with the ability to impose administrative penalties for failing to comply with the tax obligations that taxpayers inherently possess.

As an example, taxpayers may be liable to penalties for making false or misleading statements, failing to lodge tax returns or taking a tax position that is not reasonably arguable. False or misleading statements have different consequences if the statement given results in a shortfall amount or not. In both cases, the penalty will not be imposed if the taxpayer took reasonable care in making the statement (though they may still be subject to another penalty provision) or the statement of the taxpayer is in accordance with the ATO’s advice, published statements or general administrative practices in relation to a tax law.

The penalty base rate for statements that resulted in a shortfall amount is calculated as a percentage of the tax shortfall, or in the case of no shortfall amount, as a multiple of a penalty unit. This percentage is determined by the behaviour that led to the shortfall amount or as a multiple of a penalty unit, which are as follows:

If a statement fails to be lodged at the appropriate time, you may be liable for a penalty of 75% of the tax-related liability if:

To ensure that the statements, returns and lodgements are done correctly, and avoid the risk of potential penalties, contact us today. We’re here to help.