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Tax relief for over 10 million Australians.

Pension Work Bonus Scheme expanded for self-employed.

$20,000 instant asset write-off expanded to 30 June 2019.


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A Video Update from
Bryant & Bryant

TAX RELIEF

Over 10 million lower-to-middle-income Australians will enjoy a tax relief. The low-income tax offset will change from next July, so those who earn up to $37,000 will see their tax bill reduce by $200. The offset increases incrementally for those earning between $37,000 and $48,000, before the maximum offset of $530 reaches those earning between $48,000 and $90,000. There will also be a measure to combat bracket creep: from July next year, people earning between $87,000 and $90,000 will move back into the lower tax bracket and pay 32.5% instead of 37% in tax.  In 2022, the top threshold of the lower tax bracket will be increased from $37,000 to $41,000, meaning more earners will fall inside the 19% tax rate bracket.

UPCOMING KEY DATES

May 2018

15 May
Lodge 2017 tax returns for all entities that did not have to lodge earlier (including all remaining consolidated groups), and are not eligible for the 5 June 2018 concession.
Due date for: companies and super funds to pay if required.
Note: Individuals and trusts in this category pay as advised on their notice of assessment.
 
21 May
Lodge and pay April 2018 monthly activity statement.
Final date to add new FBT clients to your client list to ensure they receive the lodgement and payment concessions for their fringe benefits tax returns.
Lodge Fringe benefits tax annual return (if lodging by paper).
 
26 May
Lodge and pay eligible quarter 3, 2017–18 activity statements if you lodge electronically.
 
28 May
Pay Fringe benefits tax annual return.
Lodge and pay quarter 3, 2017–18 Superannuation guarantee charge statement – quarterly (NAT 9599) if the employer did not pay enough contributions on time.
Employers lodging a Superannuation guarantee charge statement – quarterly (NAT 9599) 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.
 
June 2018

5 June
Lodge tax return for all entities with a lodgement due date of 15 May 2018 if the tax return is not required earlier and both of the following criteria are met: non-taxable or a credit assessment in latest year lodged; and non–taxable or receiving a credit assessment in the current year.
Note: This includes companies and super funds, but excludes large/medium taxpayers and head companies of consolidated groups.
Lodge tax returns due for individuals and trusts with a lodgement due date of 15 May 2018 provided they also pay any liability due by this date.
Note: This is not a lodgement due date but a concessional arrangement where failure to lodge on time (FTL) penalties will not apply if you lodge and pay by this date.
 
21 June
Lodge and pay May 2018 monthly activity statement.
 
30 June
Super guarantee contributions must be paid by this date to qualify for a tax deduction in the 2017–18 financial year.

PENSIONERS

We have good news for pensioners, as they’ll soon be able to earn more money without impacting their pension under the Pension Work Bonus scheme, which will be expanded to include the self-employed. The Pensions Loan Scheme will also be boosted to enable everyone over pension age to effectively mortgage their home to the Government to access fortnightly payments, which are now as much as one-and-a-half times the pension rate. An additional 14,000 high-level home care support packages will also be introduced over the next four years.

HEALTH

Over to health, and six new drugs will be available on the Pharmaceutical Benefits Scheme to treat a number of life-threatening conditions. There will be an increase of $338 million in mental health funding, focusing on suicide prevention, research and older Australians, which includes $83 million for psychological services in residential aged care, and $20 million to support isolated older Australians. Some $125 million will go towards new research to support an additional one million people with mental illness, and support services including Lifeline and SANE Australia will also receive more funding to boost crisis hotlines and suicide awareness campaigns.

BUSINESSES

Small businesses with a turnover of less than $10-million now have longer to write off business purchases. The Government has extended the $20,000 instant asset write-off for another 12 months to 30 June 2019.  There are also new anti-phoenixing measures taking place to ensure small businesses don’t get ripped off by other businesses who deliberately go bust to avoid paying bills. The Government is also imposing a cap of $4 million on cash refunds for research and development tax offsets.

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.

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