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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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Why Having A Motivation For Your Business Is Important In Business Planning

Posted on June 13, 2022 by admin


What is the origin story of your business? Why did it begin? Many people might say publicly that they went into business to make a better future. Others might say that they began the business to pursue a passion. You may have simply wanted to earn money on your own terms, and create a better world for yourself. More money, more free time, and more control or flexibility around your own work are often the reasons that people go into business. In a perfect world, you would have that control over your own work, be working fewer hours and have more money while pursuing your dream job and career goal. This may sound perfect, but it is rarely the outcome that people get from their own business. In most instances, people may find that their hours increase, their income drops and though they now possess control, may also find that their business now also has control over them. The amount of work that may need to be done as a business owner can be overwhelming, but it must be completed. Instead of having one boss to answer to, all your customers are now your boss. Owning a business can grant you […]


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Who Has The Power To Make Your Financial Decisions?

Posted on June 6, 2022 by admin


As you grow older, your aim may be to live a long, happy and healthy life. This is hopefully with the mental capacity to make your own financial and lifestyle decisions, and the appropriate superannuation to fund it. But not everyone is always able to do this as they grow older. In the worst-case scenario, you may find yourself unable to make those choices yourself due to a diminished mental capacity (such as from mental deterioration, illness etc). If you can’t make your financial decisions, this could be bad. There is often a misconception that people who lose their capacity to make, for example, financial decisions will simply be able to have their partner or spouse step in to make those decisions on their behalf. This is not the case. Even if you are in a relationship with someone or own property jointly with them, they do not automatically have the power to make those financial decisions for you. This is where estate planning comes into play. An estate plan records what you want to be done with your assets after your death. It can include documents such as: your will a testamentary trust (as part of your will) superannuation […]


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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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Super Guarantee Change – Deadlines, Payments & Everything Your Business Needs To Know Before The EOFY

Posted on May 23, 2022 by admin


It is easy to get caught out with superannuation, particularly when you are the owner of a business. With so many things to occupy your mind, superannuation may slip from the forefront. But as a business owner, you must pay the superannuation guarantee for your staff, and you must pay it on time. A failure to pay it on time will mean that you are no longer able to receive a tax deduction for the payment for that financial year.  On top of that, you can face hefty penalties (which you won’t get a tax deduction for either!). Now imagine being five days late on a $10,000 super payment, losing the tax deduction on that payment and then copping a $20,000 penalty as well.  The first thing is to make sure that your super is paid well before the time it is due. This should be a priority payment (a payment that you make before anything else). As the end of the financial year approaches, it is time to be thinking about the June Super Guarantee payment. You may have until July 28 to make the payment but leaving it until then will not net you a tax deduction until […]


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How You Structure Your SMSF Could Impact The Trustees In The Fund

Posted on May 16, 2022 by admin


The way in which a self-managed super fund is structured could change its legal compliance requirements. If you are in the process of setting up an SMSF, you will need to make a decision about how to structure it appropriately to suit.  An SMSF can be structured as a single-member fund or a multiple-member fund, with the trustees of those funds deemed as either to be individual trustees or a corporate trustee Examining the circumstances of your members could help to narrow down the structure that will be best suited. You can also work out from the requirements of each structure whether or not a fund structure would be suitable for the needs of your members.  Individual Trustees Individual trustees in a single-member fund will have two trustees within the fund. One trustee must be the fund member, but cannot be the other trustee’s employee (unless they are also relatives). An example of a single member trust fund structure could be a family super fund, where the members are trustees for the fund. Individual trustees in a multiple-member fund structure generally have between two to six members. Each fund member must be a trustee and each trustee must be a […]


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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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Director Identification Number Compliance Reminder For Businesses

Posted on May 2, 2022 by admin


As of 5 April 2022, new Directors will need to have applied for their Director Identification Number (DIN) prior to their appointment to the position. Existing directors were required to obtain a DIN prior to the end of the transitional period (30 November 2022), whereas directors of Indigenous Corporation have until 30 November 2023. Failure to do so could result in penalties for non-compliance. What Is A Director Identification Number? Previously a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company. Introduced in November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN). This director identification number is a unique identifier that a director will apply for once and keep forever. They were brought in as a part of a broader regulatory strategy to address the issue of phoenixing – this is where controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company. DINs are recorded in a […]


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The Benefits & The Downsides Of SMSF Set UP

Posted on April 25, 2022 by admin


One of the benefits of establishing or opting for an SMSF is due to the control they are given over where the money is invested. While this sounds enticing, the downside is that they involve a lot more time and effort as all investment is managed by the members/trustees. They are also often the targets of fraud and scams. Firstly, SMSFs require a lot of ongoing investment of time: Aside from the initial set-up, members need to continually research potential investments. It is important to create and follow an investment strategy that will help manage the SMSF – but this will need to be updated regularly depending on the performance of the SMSF. The accounting, record keeping and arranging of audits throughout the year and every year also need to be conducted up to par. Data shows that SMSF trustees spend an average of 8 hours per month managing their SMSFs. This adds up to more than 100 hours per year and demonstrates that compared to other superannuation methods, is a lot more time occupying. Secondly, there are set-up and maintenance costs of SMSFs such as tax advice, financial advice, legal advice and hiring an accredited auditor. These costs are […]


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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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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.