Home > Newsletters
In the 2019-20 Budget, the Government announced additional tax relief to ensure that hard-working Australians are rewarded for their effort.
From the 2018–19 income year:
Taxpayers with a taxable income:
- of $37,000 or below can now receive a low- and middle-income tax offset of up to $255;
- above $37,000 and below $48,000 can now receive $255, plus an amount equal to 7.5% to the maximum offset of $1,080;
- above $48,000 and below $90,000 are now eligible for the maximum low- and middle-income tax offset of $1,080;
- above $90,000 but is no more than $126,000 are now eligible for a low- and middle-income tax offset of $1,080, less an amount equal to three per cent of the excess.
Fees charged on super accounts are capped starting 1st July 2019 for accounts having balance of less than $6,000.00 with no exit fees, allowing members to switch their superfunds without any financial loss if they choose to.
TAXI TRAVEL EXPENSES EXEMPTION
Any benefit arising from taxi travel by an employee is exempt from fringe benefits tax (FBT) if the travel is a single trip beginning or ending at the employee’s place of work.
this may be a consideration for employers who regularly provide taxi travel to staff.
FRINGE BENEFITS TAX (FBT) ISSUES ON THE ATO’S RADAR
The ATO have identified six items that specifically relate to fringe benefits tax (FBT). The information in newsletter may help you to avoid making costly mistakes.
SMALL BUSINESS HOME-BASED BUSINESS EXPENSES
This is a very common question as to what can be claimed. This information is based on ATO summaries and we hope you find it useful.
- Your business structure affects your entitlements and obligations when claiming deductions for your home-based business expenses.
- If you operate your business as a sole trader or partnership, you can claim a deduction for the costs of running your business from home.
- There are two types of expenses for your home-based business – running expenses and occupancy expenses. Whether you can claim running expenses only, or both running and occupancy expenses, depends on whether you have an area of your home set aside as a ‘place of business’.
- If you were entitled to claim occupancy expenses or you own your home and receive rental income from your business, there may be CGT implications when you sell your home. The main residence exemption may not apply for the proportion of your home and the periods that you used it for your business.
As the owner of a small business, you can claim a deduction for expenses that you incur when you travel for your business. Common expenses include: Airline, bus, train, tram and taxi or ride-sourcing fares, car hire fees and the costs you incur (such as fuel, tolls and car parking) when using a hire car for business purposes, accommodation and meals if you are away overnight.
You cannot claim a deduction for any travel undertaken before you started running your business.
ATO TO IRON OUT FALSE LAUNDRY CLAIMS
The ATO intends to target false clothing and laundry work-related expense claims this Tax Time. In 2018, around six million people claimed work-related clothing and laundry expenses totalling nearly $1.5 billion.
CASH IN HAND PAYMENT TO WORKERS NO LONGER TAX DEDUCTIBLE
The ATO has reminded employers that any ‘cash in hand’ payments made to workers from 01.07. 2019 will not be tax deductible.Read Newsletter
AUSTRALIAN TAXATION OFFICE (ATO) SCAMS
Scammers are using technology to make it look like the calls originate from a legitimate ATO phone number. Most frequently the numbers appearing are 6216 1111 and 1800 467 033, but numbers for individual ATO staff members have been used as well.
While these scam calls may appear to be from the ATO with a spoofed caller ID, it is important to remember that a legitimate caller from the ATO will never:
- threaten you with arrest
- demand immediate payment, particularly through unusual means such as bitcoin, pre-paid credit cards or gift cards
- refuse to allow you to speak with a trusted advisor or your regular tax agent
- or present a phone number on caller ID
Never call a scammer back on the number they provide. If you are in any doubt about an ATO call hang up and phone the ATO on 1800 008 540 to check if the call was legitimate or report a scam.
SMALL BUSINESS ENTITIES
Records are required to be retained for tax purposes for between two and five years, depending on class of taxpayer. For taxpayers lodging tax returns under the SBE rules, the retention period for records is two years.
Included in this newsletter are details regarding the deductibility of different expenses for small business such as:
- Interest on Loans
- Bad debts
- Staff Leave and bonus
- Director Fees
- Motor Vehicles
- and more
THE $30,000 SMALL BUSINESS TAX BREAK TRICKS AND TRAPS
Using the instant asset write-off, you can claim a deduction for each asset that cost less than the threshold that applied when the asset was first used or installed ready for use. Different thresholds apply, so make sure you check which one applies to your asset:
- $30,000 from 7.30pm AEDT on 2 April 2019
- $25,000 from 29 January 2019 until before 7.30pm AEDT on 2 April 2019
- $20,000 before 29 January 2019.
GIC AND SIC RATES FOR THE 2019 JUNE QUARTER
The ATO has published the 2019 June quarter rates for the General Interest Charge (‘GIC’) and the Shortfall Interest Charge (‘SIC’):
- GIC annual rate 8.96%
- GIC daily rate 0.02454794%
- SIC annual rate 4.96%
- SIC daily rate 0.01358904%
2020 SUPERANNUATION RATES AND THRESHOLDS RELEASED
The ATO has published the key 2020 superannuation rates and thresholds. These include:
- concessional contribution limit $25,000
- Non-concessional contribuiton limit $100,000
- CGT cap limit $1,515,000
- Division 293 tax threshold $250,000
TD 2019/2 – VALUE OF GOODS TAKEN FROM STOCK FOR 2018/19
This Determination provides the amounts the Commissioner will accept for 2018/19 as estimates of the value of goods taken form trading stock for private use by taxpayers in certain specified industries these amounts are unchanged from the 2017/18 year.Read Newsletter
2019/2020 Federal Budget Update
This budget summary is presented in an environment of political uncertainty. We have a federal election in the next 2 weeks and in the event of an A.L.P. victory, it is likely that they will develop a “mini budget” in June to incorporate some of their stated policies.
An electoral cycle of three years is not a lot of time to implement economic policy and in the event the A.L.P. are successful, we expect them to hit the ground running.
Note that this budget is handed down in a politically charged atmosphere – as such we stress that at all times, we strive to be apolitical while paying due respect to the government of the day.Read Newsletter
HOLIDAY FUN THAT WON’T BREAK THE BANK!
School holidays can play serious havoc with household budgets. How do you keep the kids/grandkids entertained without breaking the bank? Try our cheap, fun activities……
TAX CRIME CASE STUDIES
The ATO, along with our partner agencies, access various information sources and use sophisticated analytics, to identify people who deliberately break the law to either:
- avoid paying the right amount of tax;
- claim refunds or other payments they are not entitled to.
These case studies demonstrate how the ATO is effectively cracking down on those who commit tax crime.
SINGLE TAX PAYROLL EXTENDED TO SMALL EMPLOYERS
STP changes the way employers report their employees’ tax and super information to the ATO.
Using payroll or accounting software that offers STP, employers now send their employees’ tax and super information into the ATO each time they run their payroll and pay their employees.
This is a big change for small employers and the deadline of 1 July could be difficult. So, employers with 19 or less employees can start reporting any time from 1 July – 30 September. If they start during this period they will be reporting on time.Read Newsletter
KEY TAX CHANGES FOR 2019
Companies and Small Business
- lower corporate rate of 27.5% for companies with turnover < $50m and have no more than 80% of their assessable income from passive income
- immediate write off for assets less than $25,000 to 30.06.2020….
- Car expenses cents per kilometre rate increased to 68 cents….
DOES AUSTRALIAN HAVE AN ESTATE TAX?
The answer is no but effectively there is a death tax on superannuation benefits paid out to non-dependents
FAME AND NAMING RIGHTS
Taxation of income for an individual’s fame or image, which will apply from 1 July 2019. The measure aims to ensure that all remuneration (including payments and non-cash benefits) provided for the commercial exploitation of a person’s fame or image will be included in the assessable income of that individual.
ISSUES FOR SENIOR AUSTRALIANS
The funds that are allocated to the surviving member takes him/her over the $1.6 million limit which poses the question as to whether these funds should be retained in Superannuation. Although tax on funds in accumulation is only 15%, we need to consider the following…………….Read Newsletter
ARE YOU BETTER OFF AS A HOME OWNER OR A RENTER?
Sometimes it is a beneficial to rent and invest. Depending on your circumstances and needs at the time.
If you regularly change work locations – There are enormous selling and relocating costs and other expenses of selling a home every time you move. Renting while investing is a great option in this case. You may also find that you could purchase several investment properties which would add to your financial stability………
THE USE OF ELECTRONIC DEVICES IN THE WORKPLACE
Does you current workplace policy adequately cover the circumstances suitable for your workplace, and the devices that may be used by your employees at your workplace?
TAXABLE PAYMENTS REPORTING SYSTEM TO AFFECT ROAD FRIEGHT INDUSTRY FROM 1 JULY 2019
The draft guidance material on the ATO website provides that ‘road freight services’:
- include transportation of freight by road, the leasing or hiring of trucks with drivers for road freight transport (wet hire) and road vehicle towing services
- do not include the leasing or hiring trucks without drivers (dry hire), operating road freight terminals or providing crating or packing services.
SINGLE TOUCH PAYROLL (STP)
If you run a business and employ staff, then you will be required as of 1 July 2019 to comply with the Single Touch Payroll rules.
PRIVATE USE OF BUSINESS CARS
It is fundamental that a car fringe benefit occurs when a business owns or leases a car and makes it available for their employees’ private travel. Don’t forget, business directors are also employees.
Private use of a company car includes:
- Employees using the car for private travel, such as travel between work and home
- Garaging the car at or near an employees’ home and making it available for private use-Even if the car is not used by the employee
ESTABLISHING A CONTRACTUAL RELATIONSHIP
Before you decide to hire an employee, you conduct reference checks to determine their suitability to perform the role. Hiring a contractor requires a similar process.
- Licensing and legal requirements
- Ask for references and work examples
- Be aware of anything out of the ordinary
- Christmas party held on the business premises
- Christmas party held off the business premises
- Christmas gifts
GIFTS AND DONATIONS
Organisations that are entitled to receive tax deductible gifts are called ‘deductible gift recipients’ (DGRs). You can only claim a tax deduction for gifts or donations to organisations that have a DGR.
Deductions for gifts are claimed by the person that makes the gift (the donor).
To claim a tax deduction for a gift, it must meet four conditions:………..
PERSONAL USE ASSETS
Personal use assets are CGT assets, other than collectables, used or kept mainly for the personal use or enjoyment of you or your associates. Any personal use asset you acquired for less than $10,000 is disregarded for CGT purposes.Read Newsletter