Archive for 'Tax'
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.
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.
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.
Details of online sellers who sell goods and services to the value of $12,000 or more is attained. Data is obtained from online selling sites where the data owner or its subsidiary:
– Operates a business in Australia that is governed by Australian law.
– Provides an online marketplace for businesses and individuals to buy and sell goods and services.
– Tracks the activity of registered sellers.
– Has clients whose annual trading activity amounts to $12,000 or more.
– Has trading activity for the years in focus.
Data is obtained from ride-sourcing facilitators operating in Australia and/or their financial institutions to identify ride-sourcing drivers. This information is used to notify drivers and help them understand their tax obligations.
Motor vehicle registries
The Tax Office acquires data from all the state and territory motor vehicle registering bodies to identify all motor vehicles sold, transferred or newly registered, where the transfer and/or market value is $10,000 or more.
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.
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 November 2017.
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 tax deductions businesses can make.
- The general community preference to have EFTPOS or electronic payment options available to them.
- Benefits of electronic payment and record keeping facilities.
- Relaying tools and services businesses can use if they are struggling to ensure they are compliant with Australian tax laws.
- Any other help they may need.
If the ATO comes across a business that is doing the wrong thing or failing to meet their obligations, they have a duty to take action. This may result in the business facing an audit and possible prosecution.
If you have made a mistake and make a voluntary disclosure detailing your errors, the ATO will work with you to rectify this and create a solution.
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.
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
– period you use it for this purpose
– whether you’re eligible for the ‘absence’ rule
– whether it was first used to produce income after 20 August 1996.
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.
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.