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FBT parking exemptions for small businesses

Posted on January 17, 2018 by admin

It is quite common for small businesses to provide their staff with car parking benefits, however, many business owners may not take into account the effect parking has for fringe benefits tax (FBT) purposes. Fortunately, if you are a small business, car parking benefits are exempt if you meet all of the following conditions: – the parking is not provided in a commercial car park – you are not a government body, a listed public company, or a subsidiary of a listed public company – either your gross total income for the last income year before the relevant fringe benefits tax (FBT) year was less than $10 million, or you were a small business for the last income year before the relevant FBT year. Where an employer reimburses an employee’s car parking fees, i.e., if they park at a commercial car park, this will subject the employer to FBT.

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ATO targeting mischaracterised lifestyle assets and private pursuits

Posted on January 11, 2018 by admin

The Australian Tax Office (ATO) is targeting privately owned and wealthy groups that display specific behaviours and characteristics in relation to their tax affairs and lifestyle. A large focus is currently on lifestyle assets and private pursuits that generate deductions or are mischaracterised as business activities. The ATO is also looking at those assets and pursuits which are incorrectly accounted for in terms of Division 7A or Fringe Benefits Tax (FBT). Activities that attract the Tax Office’s attention include: – private aircraft ownership or activities – art ownership and dealings – car or motorbike racing activities – luxury and charter boat activities – enthusiast or luxury motor vehicles – grape growing and other farming pursuits – horse breeding, racing and training activities – holiday homes and luxury accommodation provision – sporting clubs and other activities involving the participation of principals or associates of principals of private groups. The ATO is addressing the following tax risks: Income tax – Entities claiming deductions from ownership lifestyle assets or private pursuits against other income derived by the entity but not carrying on a business. – Individuals disposing of assets and not declaring the revenue or capital gains on those disposals. – Entities incorrectly […]

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Earning income from the sharing economy

Posted on December 21, 2017 by admin

The holiday season is a peak time for activities in the sharing economy to increase. During this time those participating in the sharing economy must not forget their tax obligations. The most common sharing economy activities around the festive season include: – Providing ride-sourcing services for a fare. – Completing jobs or errands for payment. – Renting out a room or a whole house or unit. – Renting out a vehicle or a car parking space. Depending on the activity, the tax obligations vary. The ATO is reminding those that participate in the sharing economy to consider the following: – declaring income in their tax return – what income tax deductions and GST credits they can claim for expenses related to earning income and what they can’t claim because of personal use – how all of their sharing economy earnings added together affect their income tax and GST obligations – keeping records of their income and expenses to meet their tax obligations

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Annual ATO closure

Posted on December 15, 2017 by admin

The Australian Tax Office (ATO) will be closed from midday Friday 22 December 2017 to 8.00am Tuesday 2 January 2018 over the festive season. The Tax Agent Portal Dashboard and BAS Agent Portal Dashboard will be available to check portal availability. The ATO’s technical help desk will be available from 7.00am to 6.00pm weekdays, excluding public holidays and 10.00am to 4.00pm Saturdays to assist with technical log on, connection, firewall and VPN issues. The Tax Office will hold returns and forms not processed before the annual closure until processing resumes in the New Year. Lodgements made after 7 December may not issue until the New Year.

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Early payments

Posted on December 7, 2017 by admin

Taxpayers are being reminded they can prepay amounts towards their expected tax bill to help stay on top of their tax and avoid falling into debt. To make a prepayment to the Tax Office, you must get the correct payment reference number, decide how much to pay and choose a payment method. Using the correct payment reference number is critical in ensuring the ATO credits the right account. The payment reference number can be found on a relevant notice or payment slip received from the ATO, or through the ATO portals. The ATO’s research shows keeping amounts for GST, super and income tax payments separate from other business affairs, i.e., in a separate bank account or by making a prepayment helps to stay on top of payments to the Tax Office.

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ATO’s data matching programs

Posted on November 22, 2017 by admin

The Australian Tax Office (ATO) has sophisticated data matching programs in place to ensure individuals and businesses are complying with their obligations and to uphold the integrity of the tax system for the community at large. The Tax Office uses data matching to pre-fill tax returns, ensure people and businesses are lodging tax returns and activity statements when required, correctly declaring their income and claiming offsets, and meeting their tax obligations. It helps to detect dishonest individuals and businesses operating outside the tax system, detect fraud against the Commonwealth and to recover debt. The following areas are currently under close scrutiny: Credit and debit cards The ATO obtains data from banks and financial institutions to identify the total credit and debit card payments received by Australian businesses. Specialised payment systems Data on electronic payments made through specialised payment systems to Australian businesses is analysed in conjunction with data collected through the credit and debit card data-matching program. Business transactions through payment systems Data is collected from organisations that process electronic payments for businesses in a report. Online selling Details of online sellers who sell goods and services to the value of $12,000 or more is attained. Data is obtained from […]

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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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Secrets to a savvy SMSF

January 17, 2018

Opting for a self-managed super fund (SMSF) can be a clever financial decision, but it’s not for everyone.

If you aren’t prepared to adhere to the following tips, your SMSF will most likely fail to perform as well as you would of hoped it to.

Stay informed
You can’t expect your SMSF balance to be the most profitable for you in your retirement phase if you don’t remain educated on the vastly changing compliance laws. Remaining up-to-date with these changes, and how they impact upon your nest egg is an essential aspect of making your SMSF work for you, your spouse and your children.

The ultimate long-term goal of your SMSF is to allow you to retire comfortably, maintaining the life you have become accustomed to throughout your working years. To do this, you need to have a strategy; the decisions you make regarding your SMSF should be part of this strategy, not just transfers here and there because your financial advisor told you to. Your strategy should be reviewed at least annually. You need to be aware of how each decision will impact upon and ultimately lead you towards the financial security you work so hard to achieve for your later years.

Seek advice
Running a self-managed super fund doesn’t involve having all the answers, but it does require understanding when it’s time to talk to a professional to get the best advice on your SMSF. You can never ask too many questions when it comes to your future financial security.