This episode is a bit of a 'mini-sode' due to the current tax news being significant in nature, specifically the release of the (503 page) Banking Commission Report; of which the Government has agreed to action all 76 recommendations.   Adding to this is the finalisation of the ATO guideline on tax residency of foreign companies. While this may seem extremely niche driven, due to the opening of Australia to some larger companies and simplification due to the "Amazon" tax, the implications will be wider than previously.   Ultimately this episode is a preceding episode to what will be a detailed review of the guideline released and the Banking Commission report.   As always, if you have any queries, please do not hesitate to reach out to the team [email protected] and we'll gladly reply to your queries or suggestions.

As we anticipated, with a short week, and it being January, there is not a huge amount to discuss on the tax news front. However, having said that, it is worth noting that the sharing economy is still in the ATO sights, with the data matching consultation paper open until February 22nd. If you operate your business as an Uber driver, Airbnb host, or anything that derives income from a private asset, you should listen in to understand just what the ATO are up to.   As an added bonus this week Tyler discusses some of the 'common mistakes' he sees from clients in January, which follows on from the Post Christmas Guilts article he wrote earlier this month. Do not overreact to a downturn that occurs in December and January, if it is reflective of years past.   Listen in and enjoy. As always, any queries, comments or suggestions can be emailed direct to [email protected] and one of our team will be in touch.

As is often the way at this time of year, there are not too many exciting tax development, however, it also the time when certain matters have a habit of flying under the radar. In this weeks podcast we endeavour to make sure no such things occur.   New Home Office Rate   The hourly rate determined by the ATO for deducting home office expenses has been increased from 45 cents to 52 cents per hour for individual taxpayers, effective 1 July 2018. According to the updated Practice Statement PS LA 2001/6, individual taxpayers who claim deductions for work- or business-related home office running expenses may either claim a deduction for the actual expenses incurred or a deduction calculated at the rate of 52 cents per hour. Taxpayers who use the rate per hour method to claim a deduction for home office running expenses only need to keep a record to show how many hours they work from home. They can do this over the course of the year, or if their work from home hours are regular and constant, by keeping a record for a representative four-week period.   Goods and Services Tax   In a recent case of Qian v FC of T, it was determined that a taxpayer who was a courier, but using his own van, was deemed to be carrying on a business for GST purposes and was entitled to tax credits in relation to their inputs. Initially, the taxpayer had been denied these credits, and was originally deemed an employee, however, on objective review of the facts, primarily that the contractor was required to provide and upkeep the van, and could derive further income through efficiencies they introduced, they were deemed not to be an employee but rather conducting a business.   This has a potential impact on the SGC requirement of the party that engaged the contractor, should they have been deemed an employee, and it is worth watching this space to see if this is an avenue the Commissioner pursues/   Due Dates (In January)   21st January - due date for any entity that reports on the monthly cycle for GST, WET, PAYGW. 28th January - is the due date for superannuation guarantee contributions for the October to December 2018 quarter. 29th January - Due date for reporting (via TBAR) any transfer account events that occurred between 1st October 2018 and 31st December 2018 (where any member has a an account balance greater than $1m)   As always we hope you found this beneficial, and if you have any queries, comments or thoughts feel free to reach out me at [email protected] and I will reply personally. Thanks for listening, and until next week, see you later.

Hello and welcome back to the Wise Accounting Podcast. I cannot believe how many people have requested we re-introduce this over the past year, so, yes, after popular demand, we are back! Rather than catch up on the tax news that has occurred over the past year, we will just kick it off with the latest news, which for January is a surprisingly good dose.   MYEFO   There is good news afoot for the government (albeit potentially a little too late) with the mid-year economic and fiscal outlook improving from a deficit of $5.2b in 2018/19 to a surplus of $4.1b in 2019/20. <https://www.budget.gov.au/2018-19/content/myefo/index.html>   Some of the measures that re set to improve this position include:   Tax debt information disclosure — a 2016/17 MYEFO measure proposed to allow the ATO to disclose to Credit Reporting Bureaus the tax debt information of businesses with tax debt of more than $10,000 and who have not effectively engaged with the ATO to manage these debts. The measure will be amended to limit the disclosure to businesses with a tax debt of more than $100,000. The start date of the measure will also be changed from 1 July 2017 to the day after assent of amending legislation.   Tax measures not proceeding The government confirmed that it will not proceed with the following measures: • self-assessment of the effective life of acquired intangible assets that are depreciating assets, and • income tax rate cuts for companies with an aggregated annual turnover of $50m or more.   Superannuation   Superannuation guarantee obligations — employers who fail to come forward during the 12-month superannuation guarantee amnesty and are subsequently caught will face an increased minimum penalty of 100% of the superannuation guarantee charge (increased from 50%). The amnesty period began on 24 May 2018 although the legislative amendments to enact the amnesty are yet to become law.   Cash payment limit — the 1 July 2019 start date for the proposed 2018 Budget measure to introduce an economy-wide cash payment limit of $10,000 will be revised to 1 July 2020   The government has invited individuals, businesses and community groups to submit their views regarding priorities for the 2019/20 Budget. The closing date for submissions is Friday, 1 February 2019.   There has also been (long overdue) significant reviews undertaken to the superannuation system, undertaken by the Producitvity Commission.  The Commission identified a number of issues to be addressed, including prevalent high fees, unintended multiple accounts, chronic underperformance of certain funds and lack of competition in the default fund system. The final report makes 31 recommendations to the government to address these issues by modernising the system (increased from the 22 recommendations made in a draft report released in May 2018).   While there have obviously been significant developments in the tax system since our last broadcast, these latest developments are certainly encouraging with a bright economic outlook, and employees set to gain increased protection from ASIC / APRA / ATO, while the trustees will have increased scrutiny and responsibilities.   Until next week, thanks for tuning in to the Wise Accounting Podcast.

Welcome to Episode 38 of the Wise Accounting Podcast, where this week we guide you through the allowable deductions that can be incurred inside of a Self Managed Superannuation Fund (SMSF). These structures are not tax unicorns and are heavily monitored from a compliance point of view.

It is imperative that you have a thorough understanding of that you can and cannot do incised of a SMSF as if you get it wrong, and the fund is deemed non-compliant it can be costly, with the fund being taxed on asset positions as opposed to income ones.

With SMSF's continuing their popularity it seemed an ideal time to share this podcast.

So, just how popular are SMSF's? Direct from the ATO.

• the number of SMSFs increased to 596,516
• the number of SMSF members is 1,124,453
• the estimated value of SMSF assets is $696.7 billion
• the top five asset types held by SMSFs by value are
• • listed shares 30%
  • cash and term deposits 23%
  • non-residential real property 11%
  • unlisted trusts 10%
  • other managed investments 5%.

To ensure you comply with the ATO, and ensure a smooth audit process, take the time to familiarise yourself with these ATO guideline in deductible expenses within a SMSF.

https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-technical/SMSF-deductibility-of-expenses/

This week we saw the release of the WA budget, and while there are points that will impact some listeners, however we typically do not discuss the state taxes as they have too fine an impact. If you are a current payroll tax employer in WA you should note these changes and how they may affect you.

 

The ATO are currently highlighting the tax consequences of activities in the sharing economy, better known as eBay, Uber, Airbnb, FaceBook, Amazon and Airtasker. The sharing economy can be defined very broadly as new kinds of economic and social interactions facilitated by the internet. The ATO provide guidelines on records keeping, deductions allowed, and registrations required. You can find all necessary details here: https://www.ato.gov.au/General/The-sharing-economy-and-tax/Working-in-the-sharing-economy/

 

The government has introduced the Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 and the Foreign Acquisitions and Takeovers Fees Imposition Amendment (Vacancy Fees) Bill 2017 into parliament to implement tax measures on housing affordability that were announced in the 2017/18 Budget on 9 May 2017.

These bills have impacts on matters previously discussed, but specifically Schedule 1 to Treasury Laws Amendment (Housing Tax Integrity) Bill 2017 will deny tax deductions for travel expenditure incurred in gaining or producing assessable income from residential properties and it will ensure that the expenditure is not recognised in the cost base of the property for capital gains tax (CGT) purposes. The amendments will apply to losses or outgoings incurred on or after 1 July 2017.

Schedule 2 to the Bill proposes to deny income tax deductions for depreciation of previously used depreciating assets used in gaining or producing assessable income from the use of residential premises for residential accommodation.

 

Schedule 2 of the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 1) Bill 2017 will allow older Australians to contribute some of the proceeds of the sale of their family home to superannuation. The government believes this will encourage people who may have been put off by existing superannuation restrictions and caps to move house and free up homes for growing families.

From 1 July 2017, people aged over 65 will be able to make an additional non-concessional contribution of up to $300,000 into superannuation when they sell their home which they have held for at least 10 years. Both members of a couple can take advantage of this measure, meaning up to $600,000 of contributions may be made by a couple from the proceeds of selling their home.

The amendments apply to proceeds from contracts for the sale of a main residence entered into (exchanged) on or after 1 July 2018.

 

 

 

 

 

 

 

WAP036 – Tax News 28th August 2017

 

This week represented a fairly quiet week on the tax legislation front, however, as always, we have found matters to discuss that could impact you. Following on from the previous podcast, we note that the ATO are currently paying attention to work related car expenses. In 2015/16 over 3 million people made a work related car expense claim, totalling around $8.5b. Many of these claims were at the (5,000km) limit and as a result this is an area the ATO are investigating. As with any deduction, you must ensure that the claim can be substantiated and evidenced (diary evidence suffices in this instance) and is certainly not a free pass from the ATO.

The Tax Commissioner Chris Jordan has delivered a speech that the ATO is dedicated to assisting small business, contrary to how it may look, and have several key metrics to ensure this is occurring. The ATO are equally dedicated to eliminating the Black (cash) economy and the aggressive stance is focused towards this; not compliant tax payers.

Finally, The Treasury Laws Amendment (2017 Measures No 4) Bill 2017 received assent on 23 August 2017 as Act No 94 of 2017. It contains amendments to improve the integrity of the wine equalisation tax (WET) producer rebate, as discussed in Episode 34.

 

 

This week we discuss the latest tax updates, that were directed more to the individual tax system, more so than corporate. As legislation is set to pass this will change, and rest assured we will dis cuss here. In the meantime, the points discussed today are:

The government has issued new Approved Occupational Clothing Guidelines which commence on 1 October 2017 (with previous guidelines repealing from the same date). These guidelines set out the conditions for entitlement to a tax deduction for non-compulsory uniforms and wardrobes where the design of the clothing is entered on the Register of Approved Occupational Clothing (the Register). The Register is kept by AusIndustry.

An employee may claim a deduction for expenditure on uniforms or wardrobes (Div 34 of ITAA 1997) where:

1. the clothing is occupation-specific or protective in nature
2. wearing the clothing is a compulsory condition of employment and the clothing is not conventional, or
3. if wearing the clothing is not compulsory, the clothing design is entered on the Register of Approved Occupational Clothing.

The new guidelines cover:

• the tax law relating to occupational clothing
• steps employers must take to have clothing designs registered, and
• factors for determining eligibility for registration.

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The Medicare Levy is set to increase to 2.5% (from 2%) for the 2019/20 (and subsequent) income years.

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The Wine Equalisation Tax (WET) has been amended via the Treasury Laws Amendment (2017 Measure No 4) Bill 2017 to improve the integrity of the WET Producer Reabte.

Currently, a WET producer rebate (in the form of a WET credit) is available for producers of eligible wine. The amendments in the Bill are intended to address concerns in the Australian wine industry that the WET producer rebate has created distortions in the market through misuse and exploitation of the rebate, contributing to excessive wine grape production. The amendments are intended to ensure that wine producers that invest in regional communities benefit from the WET producer rebate rather than wine traders and suppliers.

Schedule 1 of the Bill amends the A New Tax System (Wine Equalisation Tax) Act 1999 (WET Act) to:

• make integrity changes to the WET producer rebate
• create a stronger link between the entitlement to the WET producer rebate and the payment of WET
• reduce the WET rebate cap from $500,000 to $350,000
• tighten the associated producers rule, and
• repeal the earlier producer rebate rule.

The WET producer rebate amendments take effect generally from 1 July 2018.

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The ATO has issued Goods and Services Tax: Waiver of Tax Invoice Requirement (Corporate Card Statements) Legislative Instrument 2017 which sets out the circumstances in which an entity can claim GST input tax credits on the basis of credit or charge card statements, even though no formal tax invoice has been issued. The determination took effect for tax periods commencing after 14 August 2017.  The new determination is substantially the same as the previous determinations. An entity that satisfied the requirements of the previous determinations will satisfy the requirements of this determination. If the requirements are met, for the purposes of attributing an input tax credit for a creditable acquisition to a tax period, a cardholder is not required to hold a tax invoice for the creditable. In summary, the corporate card statement may be used to claim input tax credits where:

• the card holder holds a corporate card statement for the creditable acquisition that contains the information set out in section 9 of the determination
• the GST related information on the statement meets the accuracy requirements in section 12
• the cardholder meets the requirements of section 13 that ensure that the statement is used accurately to claim input tax credits

 

 

 

 

In this week's podcast we discuss some of the tax changes and how they impact you. Despite the low volume of changes since the commencement of the financial year there are still several factors that are impacting tax payers:

1. From July 1st (2017) the annual concessional contributions cap has been reduced to $25,000 and the non-concessional contributions cap to $100,000. Furthermore, where a member's total superannuation balance is greater than $1.6m the non-concessional cap is nil.
2. The ATO are well and truly cracking fown on multinational tax avoidance. Due to the flow on effect of these restructures the ATO are anticipating an additional $100m in income tax (in the first year, & $300m in the first 4 years) with a potential GST revenue impact of $240m.
3. Four million income tax returns have already been lodged to the ATO, with 1.6m of them being lodged individually through my Tax. There have been 2.96 million refunds issued for $6.8b.
4. The draft determinaton for food retailers and the simplified accounting methods (SAM) has been released. The changes to the previous determinatopn are minimal, but if you are a food retailer and:
   1.  is a retailer which sells GST-free food
   2. its SAM turnover is less than $2m, and
   3. it does not have adequate point-of-sale equipment

You will qualify for the simplified accounting method for GST calculating and reporting. How these methods can be utilised and applied is complicated and a tax professional should be consulted ton ensure compliance.

5. The Deputy Commissioner has obtained judgement for almost $1.9m against a director for unpaid PAYG withholding and superannuation guarantee charges. If you are a director of a company you are personally responsible for PAYGW and SGC obligations.

As always, if you have any questions, comments or suggestions to just reach out to us, but we hope you find this beneficial.

Until next time, thanks for listening.

Those that know us, know that we are big tech fans, be that hardware or software. One of our favourite Software as a Service providers are Class | Super who allow us to prepare our SMSF fund compliance matters at a level of efficiency we simply have not experienced before.

Further to this Class Limited have gone from a private company to a listed company, and their CEO, Kevin Bungard was kind enough to come on to our podcast and answer some of our questions.

We get in to how Kevin and Class stay focussed and achieve their goals in a turbulent environment, what the challenges are of running a listed company (compared to a private one), what is in store for Class, and of course, any tips that Kevin has for business owners. It is full of gems throughout, so please enjoy.

As I say in the intro, there are some audio drop out issues, however these do not take away from the experience and Kevin's advice and tips still resonate throughout.

If you find this podcast, or any of our others beneficial we would really love it if you could please leave a review in iTunes. It helps keep these podcasts going and aid the direction of these.