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Support Available for Businesses Experiencing Difficulties
By paying their tax bill in full and on time, taxpayers can avoid paying the general interest charge ('GIC'), which is currently 11.34%, and which accrues daily for any overdue debts.
The ATO advises taxpayers that, if their business is dealing with financial difficulties, there are some options to help make their tax bill "less taxing".
ATO's Three Focus Areas This Tax Time
The ATO will be taking a close look this 'tax time' at the following common errors made by taxpayers:
Work related expenses: Taxpayers using the 'revised fixed rate method' of calculating a working from home deduction must have comprehensive records to substantiate their claims, including records that show the actual number of hours they worked from home, and the additional running costs they incurred to claim a deduction.
Super Compliance: A Crucial Update for Small Businesses.
The ATO has implemented a significant upgrade to the SBSCH, introducing SMSF bank account validation to bolster the precision and security of super contributions. This development affects all small employers utilising the SBSCH to manage super payments to their employees' SMSFs.
The growing impact of cybersecurity: safeguarding our digital economy.
In the digital age, where information is the new currency, cybersecurity has become a paramount concern for everyone. In this blog, we delve into the impacts of cybersecurity breaches on businesses, highlighting the importance of proactive measures to safeguard our digital infrastructure.
New ATO guidance on “who is an employee?”
The ATO recently issued a ruling which explains when an individual is an 'employee' of an entity for pay as you go ('PAYG') withholding purposes.
Random ATO audits ensure employment tax compliance for businesses.
The ATO has recently initiated random audits on businesses to assess their employment tax compliance and proper record-keeping.
Deductions denied for work-related expenses.
The Administrative Appeals Tribunal ('AAT') recently held that a taxpayer should not be allowed deductions for various work-related expenses, largely because the substantiation requirements had not been satisfied.
Changes in reporting requirements for sporting clubs.
Not-for-profits ('NFPs'), including sporting clubs, societies and associations with an active ABN, need to lodge an annual NFP self-review return to continue accessing their income tax exemption.
Sale of land subject to GST.
The AAT recently held that the sale of land by a taxpayer was subject to GST, as it was a supply made in the course of an enterprise being carried on by the taxpayer.
Tax rate change coming into effect from 1 July 2024.
Australian Income Tax Brackets are changing for the first time in five years.
Choosing the right PAYG instalment method.
The ATO advises that Pay as you go (‘PAYG’) instalments are calculated using either the instalment amount method or the instalment rate method. It recently provided the following two case studies to illustrate the two methods.
Taxpayers need to get their ‘rental right’.
The ATO reminds rental property owners to take care when lodging their tax returns this tax time. Taxpayers should make sure all rental income is included, including income from short-term rental arrangements, renting part of a home, and other rental-related income.
GST Warning: Ride-share providers must be GST-registered.
In accordance with the GST Act, those offering 'taxi travel' services are obligated to register for GST, irrespective of their annual turnover (i.e. the usual $75,000 threshold does not apply).
Luxury Car Tax: Determining a vehicle’s principal purpose.
The ATO recently explained how to determine the principal purpose of a car for ‘luxury car tax’ (‘LCT’) purposes (since LCT is not payable on the supply or importation of cars whose principal purpose is the carriage of goods rather than passengers).
Different meanings of ‘dependant’ for super & tax purposes.
On a person’s death, their superannuation benefits can only be paid directly to one or more ‘dependants’ as defined for superannuation purposes, unless they are paid to the deceased’s legal personal representative to be distributed in accordance with the deceased’s Will.
Reallocation of excess concessional contributions denied.
The AAT has held that there were no special circumstances in relation to a taxpayer who made excess concessional contributions in a financial year, such that the ATO could allocate some of those contributions to the previous financial year.
Downsizer contribution measure eligibility has been extended.
The downsizer contribution concession was introduced to allow older Australians selling an eligible dwelling to make additional contributions into their superannuation fund.
Masters course fees not deductible as self-education expenses.
Case: The Administrative Appeals Tribunal (‘AAT’) has held that tuition fees for a public policy Masters course were not deductible, on the basis that the course did not relate to a taxpayer's work as a music teacher.
Proportional indexation of transfer balance caps from 1 July 2023.
The ATO reminds taxpayers that, from 1 July 2023, the general transfer balance cap will be indexed.
Individuals will have a personal transfer balance cap between $1.6 and $1.9 million, based on the highest ever balance of their transfer balance account between 1 July 2017 and 30 June 2023.
Minimum Annual Payments for Super Income Streams.
The ATO reminds taxpayers that an SMSF must pay a minimum amount each year to a member who is receiving a pension that commenced on or after 20 September 2007 (e.g. account based pensions). If the minimum payment is not made by 30 June, this can result in adverse taxation consequences for the member.