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Using the margin scheme for property sales

Posted on November 15, 2017 by admin

Those selling property as part of a business sale may be eligible for the margin scheme. The margin scheme is a way of working out the GST you must pay on the property that you are selling as part of your business. The scheme is only applicable if the sale of a property is taxable. The GST on property sales is generally equal to one-eleventh of the sale price. If the margin scheme is used, the GST is calculated on the difference between the sale price and your purchase price of the property (or the property’s value on 1 July 2000 if it was acquired before that date). To meet the eligibility requirements you need to be registered for GST or required to be registered for GST. Contact our office to check your eligibility for the margin scheme when selling property as the application of GST to property-related transactions can be quite complex.

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Changes to GST on low-value imported goods

Posted on November 10, 2017 by admin

Australian goods and services tax (GST) will be implemented on sales of low-value goods imported into Australia by consumers as of 1 July 2018. According to the ATO, business will have to register for GST, change GST on sales of low-value imported goods and lodge returns if they meet the $75,000 AUD registration threshold. These business includes merchants who sell goods, electronic distribution platform operators or re-delivers. Customs duty and clearance charges will be changed to the importer at the border under existing process should goods be imported in a consignment over the value of $1,000 AUD. Through the implementation of this new law, businesses will not: – Charge GST on a sale where GST is to be charged at the border. This occurs when an item is worth over $1,000 AUD or is a tobacco product or alcoholic beverage. – Need to charge GST where it is clear that multiple goods will be shipped in the one consignment coming to a value of over $1,000 AUD. In these instances, GST will be charged at the border instead. The ATO will be holding a number of international engagements on the application of Australian GST to low-value, imported goods sales throughout […]

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ATO to focus on cash-only businesses

Posted on November 1, 2017 by admin

To protect honest, compliant Australian businesses, the Australian Taxation Office has placed a strong emphasis on targeting the cash and hidden economy. The ATO is visiting businesses that deal predominantly in cash, with a focus on those that: Fail to meet super or employer obligations, and that 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 our 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 of someone with their reported income. Are reported to the ATO by members of the community or any third party regarding potential tax evasion. Are part of an industry that is known for dealing primarily in cash only. When out visiting cash-only businesses, the ATO will be working in unison with local authorities and industry associations to asks questions and discuss: Why the business operates primarily or only in cash. The need to lodge tax returns and activity statements. How to be compliant in relation to tax and super obligations. Different claims and […]

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Assistance for new business owners

Posted on October 27, 2017 by admin

The ATO has established the ‘Business Assistance Program’ to help new business owners understand their tax obligations associated with running a business. Small businesses that have recently registered for an ABN, registered for GST or likely to register for GST in the near future and have a turnover of less than $2 million a year can access this program. The ‘Business Assistance Program’ offers tailored tax support over a 12 month period and can help with: Tax obligations based on your business structure Registering for GST and GST obligations Employer obligations Super obligations Record keeping requirements Understanding business activity statements Using the ATO’s digital services. Within 48 hours of submitting the online registration form for the program, you will receive a welcome email containing tax topics, links to useful information and information about the program.

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Selling your home and CGT

Posted on October 18, 2017 by admin

When it comes time to sell your home, you may be wondering if you will need to pay capital gains tax (CGT). Generally, if you live in the home you are selling you will not have to pay CGT under the main residence exemption. The ATO considers a dwelling as your main residence if: – you and your family live in it – your personal belongings are in it – it’s the address your mail is delivered to – it’s your address on the electoral roll, and – services such as gas and power are connected. If the home has been used to produce assessable income such as running a business from it, renting it out or flipping it, you may not be entitled to the full main residence exemption from CGT. This means you will have to pay CGT on part of any capital gain made when your sell your home. For those who use their home to produce income, i.e., renting out part or all of it, you can work out the capital gain that is not exempt by taking into account the following factors: – proportion of the floor area that is set aside to produce income […]

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Protecting honest businesses

Posted on October 13, 2017 by admin

In its effort to facilitate a fair business environment, the ATO has offered continued support for honest businesses. With an estimated $40 billion lost to the hidden economy, the need for strong diligence and continued governance over Australian businesses is essential. The Black Economy Taskforce that was established in May 2017 and various trends have since been better understood regarding strategies dishonest businesses and individuals are using to evade their tax responsibilities. Trends show that problematic areas include: The sharing economy: the money exchanged through services such as Airbnb, Airtasker and Uber are all taxable. Ensure you understand how to be compliant before engaging with these services. Cash transactions: employers paying employees in cash to avoid tax and super responsibilities costs the economy an astronomical amount, as well as contractors accepting cash payments and not accurately documenting these. Incorrect reporting: individuals and businesses failing to report their business dealings correctly are creating huge liabilities in the economy. Small reporting dishonesties by a great portion of taxpayers creates a large balance of unaccountable money; the majority of unaccountable money in relation to tax evasion.

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Reporting SMSF changes

Posted on October 5, 2017 by admin

Self-managed super fund trustees must notify the Australian Tax Office (ATO) if there are changes to their SMSF. Trustees must provide written notice within 28 days if there are changes to: the name of the fund the address of the fund details of the contact person the membership of the fund the trustees of the fund the directors of the fund’s corporate trustees your SMSF’s bank account details and Electronic service address. The above details are used by the ATO to determine if your fund meets the definition of an SMSF. Providing incomplete or inaccurate information may make it impossible for your fund to receive rollovers or contributions. If any of these details change for your SMSF, contact our office to update your details.

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Imported services and GST

Posted on September 27, 2017 by admin

Under the new law introduced on 1 July 2017, Australian GST registered businesses that import services or digital products for business purposes do not have to pay GST. These businesses will need to supply their Australian business number (ABN) and a statement that they are registered for GST to the supplier at the time of purchase to ensure they are not charged GST. Overseas businesses registered under the simplified GST system for non-residents do not have an ABN and cannot issue a tax invoice. If a business believes that GST has been charged, they will need to contact the supplier and seek a refund if appropriate. However, if an Australian business is not registered for GST or their purchases are not for business use, they will need to pay GST and will not be able to claim it back.

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Ride sourcing – Claiming car expenses

Posted on September 20, 2017 by admin

Those who participate in ride-sourcing (i.e., Uber, GoCatch) as a driver can access a number of tax deductions come tax time. You may be able to claim expenses such as: – Parking fees – Road tolls – Mobile phone costs – Fees or commissions charged the facilitator – Other expenses – to the extent that they relate to work-related travel. Under the logbook method (the business-use percentage of car expenses) include: – Petrol – Depreciation of your car – General vehicle running costs such as insurance, car rego and repairs – Maintenance. Expenses you cannot claim include: – Fines, such as parking and speeding fines – Fuel tax credits – The cost of getting and maintaining a standard driving licence – Costs of a capital nature, such as car purchase price – Personal or private expenses, such as the private use of a car used for ride-sourcing activities. If you use your car for both personal and work-related use, you will need to apportion your car expenses appropriately. If the owner of the car is a spouse or de-facto partner, you can still claim deductions for the car as it is considered a joint asset. You may be eligible for […]

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Sharing economy and tax

Posted on September 14, 2017 by admin

The ATO is reminding those who work in the sharing economy to be aware of their tax obligations. The sharing economy connects buyers (users) and sellers (providers) through a facilitator who usually operates an app or a website. Some popular examples include Airbnb, Stayz, Uber, Deliveroo, Airtasker and so on. Different rules apply, depending on what type of sharing economy activities are undertaken by an individual. Those who rent out part or all of their home are reminded to: – declare what they earn in their tax return; – apportion related expenses as appropriate before claiming deductions and – understand it may affect their capital gains tax if they sell their home in the future. Individuals who participate in ride-sourcing activities need an ABN, to register for GST from the day they start, to pay GST on the full amount of every fare and to keep records of income and expenses for both GST and income tax purposes. GST credits associated with your ride-sourcing enterprise are deductible. Those providing other goods and services through the sharing economy need to remember to declare what they earn and apportion related expenses.

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SMSF annual return for pension phase trustees

November 15, 2017

Self-managed super fund (SMSF) trustees who are in pension phase must lodge their SMSF annual returns if they remain active, or choose to wind up the fund.

The ATO is warning SMSF trustees about their regulatory obligations and is paying close attention to those SMSFs that are not meeting their lodgment obligations.

Trustees must lodge a Self-managed superannuation fund annual return 2017 if it was a self-managed super fund on 30 June 2017, or a self-managed super fund that was wound up during 2016-17.

Super funds that are not SMSFs at the end of 2016-17 must use the fund income tax return 2017 and, where required, a separate super member contributions statement.

Even if your fund does not have a tax liability, your SMSF must lodge an SMSF annual return.