New $10 note released in September.

ATO toughening up on superannuation regulations.

New crowd-sourced equity funding for small businesses.

 Keep news articles updated      Number of news articles        Save Options Preview Live Page Resource Centre

A Video Update from
Bryant & Bryant

Private Health and Tax

A growing number of Australians are choosing to opt out of private health insurance as the financial incentive is diminishing. Currently, anyone earning more than $90,000 a year who doesn't have health insurance will pay extra tax, in the form of the Medicare Levy Surcharge. There is also a Lifetime Health Cover loading that goes up by 2 percentage points every year a person delays taking out private health insurance after the age of 31 and until they're 65. Despite this, rising premiums and bracket creep are making it cheaper to pay the Medicare Levy Surcharge than investing in basic health cover.

 Upcoming Key Dates

21 October
Pay annual PAYG instalment notice (Form N). Lodge only if you vary the instalment amount or use the rate method to calculate the instalment.

Lodge and pay quarter 1, 2017–18 PAYG instalment activity statement for head companies of consolidated groups.

Lodge and pay September 2017 monthly activity statement.
28 October
Lodge and pay quarter 1, 2017–18 activity statement if lodging by paper. Pay quarter 1, 2017–18 instalment notice (form R, S, or T). Lodge the notice only if you vary the instalment amount.

Make super guarantee contributions for quarter 1, 2017–18 to funds by this date.
Employers who do not pay minimum super contributions for quarter 1 by this date must pay the super guarantee charge and lodge a superannuation guarantee charge statement – quarterly (NAT 9599) by 28 November 2017.
Note: the super guarantee charge is not tax deductible

Lodge and pay annual activity statement for TFN withholding for closely held trusts where a trustee withheld amounts from payments to beneficiaries during the 2016–17 income year.
31 October
Final date to add new clients to your client list to ensure their 2017 tax return is covered by the lodgment program.
Note: the lodgment program is a concession to registered agents. The ATO asks for documents to be lodged earlier than the concessional due dates.

Lodge tax returns for all entities if one or more prior year returns were outstanding as at 30 June 2017.
Note: this means all prior year returns must be lodged, not just the immediate prior year.
If all outstanding prior year returns have been lodged by 31 October 2017, the lodgment program due dates will apply to the 2017 tax return. SMSFs in this category must lodge their complete self-managed superannuation fund annual return by this date.

Lodge and pay self-managed superannuation fund annual return (NAT 71226) for (taxable and non-taxable) new registrant SMSF if the ATO has advised the SMSF that the first year return has a 31 October 2017 due date.

Lodge tax return for all entities prosecuted for non-lodgment of prior year returns and advised of a lodgment due date of 31 October 2017:
Some prosecuted clients may have a different lodgment due date – refer to the letter you received for the applicable due date.
Payment (if required) for individuals and trusts in this category is due as advised in their notice of assessment.
Payment (if required) for companies and super funds in this category is due on 1 December 2017.
SMSFs in this category must lodge their complete self-managed superannuation fund annual return (NAT 71226) by this date.

Lodge annual investment income report (AIIR).

Lodge departing Australia superannuation payments (DASP) annual report.

Lodge franking account tax return when both the:
Return is a disclosure only (no amount payable);
Taxpayer is a 30 June balancer.

Lodge PAYG withholding annual report no ABN withholding (NAT 3448).

Lodge PAYG withholding from interest, dividend and royalty payments paid to non-residents – annual report (NAT 7187). This report advises amounts withheld from payments to foreign residents for:
Interest and unfranked dividend payments that are not reported on an Annual investment income report (AIIR);
Royalty payments.

Lodge PAYG withholding annual report – payments to foreign residents (NAT 12413). This report advises amounts withheld from payments to foreign residents for:
Entertainment and sports activities;
Construction and related activities;
Arranging casino gaming junket activities.

Lodge lost members report for the period 1 January – 30 June 2017.

Lodge TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries in quarter 1, 2017–18.
21 November
Lodge and pay October 2017 monthly activity statement.
25 November
Lodge and pay quarter 1, 2017–18 activity statement if you lodge electronically.

28 November
Lodge and pay quarter 1, 2017–18 superannuation guarantee charge statement – quarterly if the employer did not pay enough contributions on time.
Employers lodging a superannuation guarantee charge statement – quarterly can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They still have to pay the remaining super guarantee charge.
Note: the super guarantee charge is not tax deductible.

Vulnerable Workers Bill

The federal government has passed a new Fair Work amendment: Protecting Vulnerable Workers bill. The new bill significantly boosts fines for employers attempting to force employees to pay back their wages in cash, and it makes franchisors and holding companies culpable for breaches of the Fair Work Act if they’re found responsible. What’s more, the Australian Labor Party successfully had an amendment made to the new bill that reverses the onus of proof onto the employer, regarding claims for unpaid wages where the employer has not produced wage slips or employment records.

New Small Business Laws

In September new laws came into place that allow  small and micro businesses access to additional opportunities to raise capital to grow their business. Crowd-Sourced Equity Funding allows businesses the opportunity to raise up to $5 million a year, with individuals allowed to contribute up to $10,000 per company, per year. As opposed to Crowdfunding whereby investors receive a business report or a sample product, Crowd-Sourced Equity Funding means investors become shareholders of the business and expect a financial return on their investment. Additionally, there is more good news for small businesses, with the amendments to the Competition and Consumer Act 2010 which passed in August. These amendments make it harder for corporations with substantial market power to engage in conduct with the purpose, effect or likely effect to substantially lessen competition in markets in which they directly or indirectly participate.

$17 billion in Missing Super

A report released this year by the ATO has shown a 17-billion-dollar gap in Australian superannuation that’s accrued over the past eight years. As a result, the Federal Government is cracking down on employers not paying the mandatory 9.5 percent of employee earnings to a super-fund of their choice. Measures to close the superannuation gap include: asking employers to submit monthly reports via Single Touch Payroll so the tax office can detect non-compliance; and granting the ATO power to seek court-order penalties where employers are caught repeatedly failing in their super obligations.

Contractor or Employee?

The difference between a contractor and an employee is not always clear cut. The courts and tax office take a number of factors into account when determining the actual status, such as hours worked, superannuation, method of payment and leave to name a few. Any written agreement stating the nature of the relationship is certainly relevant, but it’s not conclusive, and should not be relied solely upon. Both employers and contractors need to be fully aware of their situation as serious penalties are involved with sham contracting arrangements. Find out more here.

"Holiday home" included in tax concession test

A taxpayer company has been unsuccessful before the Administrative Appeals Tribunal (AAT) in a claim to secure the capital gains tax (CGT) concessions for small businesses.

In this case, the AAT affirmed the Commissioner's decision that the taxpayer did not satisfy the "maximum net asset value" test for the purposes of qualifying for the concessions. The AAT found that the individual who controlled the company could not exclude from the test his interest in a Queensland property, which he claimed was used for "personal use and enjoyment".

TIP: The small business CGT concessions are intended to offer small business taxpayers a range of unique tax concessions. However, despite being targeted towards taxpayers who typically have less complicated affairs, the rules are riddled with complexities that may not appear obvious at first glance.

Each concession has its own particular rules. However, there are two basic conditions for the relief - either the taxpayer is a small business entity (SBE) or is a partner of a partnership that is an SBE, or the taxpayer satisfies the maximum net asset value test. If you have any questions, please contact our office.

Small business benchmarks catch out florist

The AAT has recently dismissed an appeal by a florist against the Tax Commissioner's decision to issue income tax and GST assessments following an ATO audit of her florist business.

The taxpayer had reported that the cost of goods sold in her business represented 83% of her reported business income. The ATO had selected the taxpayer for audit because this figure was outside what it considered to be the industry benchmark range of between 44% and 54%.

In this case, the taxpayer was unable, due to a lack of evidence, to prove to the AAT that the assessments were excessive.

TIP: The Tax Commissioner has warned that businesses operating outside the relevant benchmarks could be subject to ATO review and/or audit, and where the businesses do not have adequate records to substantiate their performance, the ATO will make a default assessment using the appropriate small business benchmark.

Businesses may want to consider reviewing their record-keeping practices and assess whether they are at risk of an audit. Please contact our office for further information.

Visit our website

Bryant & Bryant
Level 2, 530 Lonsdale Street
Ph:+613 9600 1000

Disclaimer: This is not advice. Information provided in this bulletin may be in the form of summaries and generalisations - it may omit detail that could be significant in a particular context or to your personal circumstances. You should not act solely on the basis of material contained in this bulletin. Before you start any transactions, you should obtain appropriate professional advice relevant to your particular circumstances. Links to third-party websites are inserted for your convenience, but do not constitute endorsement of material at those sites or any associated product or service. Changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of the areas. The information in this bulletin is provided on the basis that all persons accessing the bulletin undertake responsibility for assessing the relevance and accuracy of its content.

Produced by Messages On Hold