Home » Posts tagged "ATO"

Posts Tagged ATO


Individuals

15th Jul, 2019

Deduct work-related expenses

People overclaiming deductions for work-related expenses like vehicles, travel, internet and mobile phones and self-education are on the ATO’s hitlist again this year. There are three main rules when it comes to work-related claims:

  • You can only claim a deduction for money you have actually spent (and that your employer hasn’t reimbursed).
  • The expense must be directly related to earning your work
  • You must have a record to prove the

Deductions are not allowed for private expenses (eg travel from home to work that’s not required to transport bulky equipment) or reimbursed expenses (eg for the cost of meals, accommodation and travel). And although you don’t need to include records like receipts with your tax return, the ATO can deny your claim – and penalties may apply – if you can’t produce the evidence when asked.

TIP: The ATO now uses real-time data to compare deductions across similar occupations and income brackets, so it can quickly identify higher-than- expected or unusual claims.

Don’t forget sharing economy income

Money that you earn from “gig” jobs through platforms like Uber, Airtasker and Airbnb, such as transporting passengers or renting out a room or house, counts as your assessable income. This means you must declare it on your tax return.

Depending on your gig activities and expenses, you may also be able to claim deductions related to this type of income, but it’s important to keep evidence to support your claims.

Superannuation contributions and changes

Both employees and self-employed individuals can claim a tax deduction annually (maximum $25,000) for personal superannuation contributions, provided the super fund has physically received the contribution by 30 June 2019 and the individual provides their fund with a “notice of intention to claim” document.

Important to note!

New rules mean that insurance coverage will be cancelled on “inactive” superannuation accounts from 1 July 2019, unless the fund member informs the fund in writing that they want to keep the insurance. Also, where an inactive account has a low balance (under $6,000) the fund will have to send that super to the ATO for consolidation and safekeeping.

If you haven’t made contributions or rolled over your super in the past 16 months, no matter what your balance, it’s important to check in with your fund now to keep your account active and maintain the insurance you want.

TIP: The new law also bans super funds from charging exit fees when you want to leave the fund, which should make it easier to change and consolidate your super accounts when you need to.

Tags: ,


Businesses

15th Jul, 2019

Lower company tax rate

From 1 July 2016, the income tax rate applicable to qualifying companies has reduced to 27.5%. For the year ending 30 June 2019, this lower tax rate now applies for companies with aggregated turnover of up to $50 million, as long as they satisfy the “passive income test”.

Small business restructure rollover relief

Small businesses (<$10 million turnover threshold) have access to the small business restructure relief, which allows eligible taxpayers to transfer assets between related entities, including companies, trusts and individuals, without any income tax or CGT consequences. While this rollover can be very beneficial to a small business, and can lead to substantial tax savings, the eligibility rules can be complex, so care is needed.

Super guarantee contributions

The rate for super contributions paid by employers on behalf of their employees under the super guarantee for the year ended 30 June 2019 is 9.5%.

If you’re an employer, you must make super guarantee contributions for your employees quarterly, within 28 days after the end of each quarter (September, December, March and June).

TIP: Although the June 2019 quarter super guarantee contribution doesn’t have to be paid until 28 July 2018, it’s worth considering an early payment – you can only claim deductions on this year’s return for contributions that employees’ super funds receive by 30 June 2019.

Single touch payroll

From 1 July 2018, employers with 20 or more employees will have to run their payroll and pay their employees through accounting and payroll software that is Single touch payroll (STP) ready. This is a major reporting change, as employers will report payments such as salaries and wages and allowances, PAYG withholding and super information to the ATO directly from their payroll solution at the same time employees are paid.

From 1 July 2019, this system will extend to all employers.

TIP: STP reporting also means changes for employees, who will see year-to-date tax and super information in myGov. Employers no longer have to give employees payment summaries (group certificates) for information reported through STP, because this information will appear on an employee’s employment income statement in myGov at the end of the financial year.

Beware of ATO impersonation scams at tax time

The ATO warns taxpayers to be alert to malicious scammers who are using increasingly sophisticated methods and technology to impersonate the ATO. A new tactic on the rise is “spoofing”, where scammers mimic a legitimate ATO phone number caller ID to call or send SMS messages, or mimic a legitimate email domain to send emails.

SMSs and emails may ask you to click on a link and provide your personal details to get a “refund” from the ATO. Scammers may also say you need to pay a (fake) tax debt. The ATO warns that these scammers may intend to steal not only your money, but also your identity by using your personal information.

TIP: If you’re not sure whether a communication is really from the ATO, don’t respond, don’t click any links and don’t open any attachments. Call the ATO’s scam hotline on 1800 008 540 to check its legitimacy.

Tags: ,


Payment summaries and STP this tax time – taxpayers may need a myGov account

09th Jun, 2019

While it is being reported that many businesses are not ready for Single Touch Payroll (STP), one report suggests that 70% of small and medium-sized entities (SMEs) are not ready, the employees of businesses that are operating STP face some changes.

As a result of the introduction of STP, taxpayers may need a myGov account in order to get the payment summary details they need to complete their 2019 tax returns. How taxpayers receive their payment summary or income statement from their employer depends on how their employer reports their income, tax and super information to the ATO.

Employers need to let employees know if they won’t be giving them a payment summary this year.

Employees with more than one employer may receive both a payment summary and an income statement. In that situation, employees will need to check that income from their payment summaries is included in their tax return.

TIP: This major change for 2019 will see many taxpayers needing to set up a myGov account and link it to the ATO. This is not necessarily a straightforward process. If taxpayers have a myGov account already linked to other services such as Centrelink or Medicare, adding the ATO can be problematic. For example, the name on each account must match exactly – the ATO is likely to have a taxpayer’s full name whereas a Centrelink account may only have first and last name. This may prevent the ATO from being added to a taxpayer’s myGov account. The situation can be rectified but may require a trip to a Centrelink office.

Tags: ,


STP exemptions and deferrals – ATO reminders

09th Jun, 2019

With reported unpreparedness for Single Touch Payroll (STP), mainly among small businesses, and with employers having less than 19 employees needing to report their employees’ tax and super information through STP from 1 July 2019, the ATO has reminded businesses about the STP exemptions and deferrals that are available.

There are exemptions for reporting through STP for a particular financial year, for certain payments, or for certain employees.

TIP: Where there are extenuating circumstances that impact an employer’s ability to regularly report on or before pay day (eg regular intermittent internet connectivity issues that result in the ATO receiving its report a couple of days after pay day), they can apply for a recurring deferral.

Tags: ,


Ombudsman calls on ATO to cease small business recovery action where tax disputes are before AAT

09th Jun, 2019

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has issued a report into the ATO’s enforcement of debt recovery. In a press release, the ASBFEO called for the ATO to immediately cease debt recovery action where tax disputes were before the Administrative Appeals Tribunal (AAT).

The report contains three key conclusions and seven recommendations. The ASBFEO also reminds small business taxpayers in dispute with the ATO of its Small Business Concierge Service, which started on 1 March 2019. This service provides legal assistance for AAT appeals for a limited cost.

The ATO issued a press release outlining its response to the report stating its long standing policy on debt recovery for cases in dispute at the AAT is to only pursue disputed debt in “exceptional circumstances” and that there are only ”very rare cases” (eg in 2017- 18, it took garnishee action against small business in just four cases).

The ATO further stated that it will give consideration to the report’s recommendations while it awaits the Australian National Audit Office’s review of how the ATO manages tax debts for small business.

Tags: ,


Cryptocurrency: record keeping requirements and data matching program

09th Jun, 2019

The Commissioner has published a gazette notice setting out the record keeping requirements for cryptocurrency owners and traders. The ATO advises that it is undertaking a data matching program for 2014-15 to 2019-20 for such entities.

The data obtained from cryptocurrency designated service providers (DSPs) is being (and will continue to be) used to identify the buyers and sellers of crypto- assets and quantify the related transactions. Data will be matched against ATO records to identify individuals who may not be meeting their registration, reporting, lodgment and/or payment obligations.

The ATO will be working with other regulators, in particular, the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Securities and Investments Commission (ASIC) to ensure that tax law requirements align with a whole of system approach.

Tags: , ,