The Coalition wins election, promises tax breaks
Scammers use fake invoices to take advantage of businesses
Single Touch Payroll required for all businesses by July 1
On The Money - Episode 35
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Starting on July 1, 2019, all businesses regardless of size will be required to use Single Touch Payroll, or STP. Many businesses may use software that offers STP reporting – this feature will send employees' tax and super information to the ATO each time business owners run their payroll and pay employees. There will also be a number of options available for employers who do not use payroll software, such as no-cost and low-cost Single Touch Payroll solutions. These options will depend on the number of employees the business has. Larger employers with 20 or more employees should already be reporting through STP, or have applied for a later start date.
Lodge tax return for all entities with a lodgment due date of 15 May 2019 if the tax return is not required earlier and both of the following criteria are met: 1. non-taxable or a credit assessment in latest year lodged, 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 lodgment due date of 15 May 2019 provided they also pay any liability due by this date.
Note: This is not a lodgment 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.
Lodge and pay May 2019 monthly business activity statement.
Lodge 2019 Fringe benefits tax annual return for tax agents if lodging electronically. Payment (if required) is due 28 May.
Super guarantee contributions must be paid by this date to qualify for a tax deduction in the 2018–19 financial year.
Scams are a big threat to businesses and individuals alike. Scammers are becoming harder to track and more advanced – businesses are advised to stay vigilant as more scammers target small and medium-sized companies with fake invoices. How does it work? Businesses receive letters, emails, or phone calls about fake bills or false invoices, claiming the company owes money for goods or services already provided. The most sophisticated scammers send invoices that look legitimate, but with different BSB or account numbers than the legitimate business. Business owners should also second guess any phone calls from individuals claiming to be with the ATO. If the caller is aggressive, makes threats, or asks you to call them back on a different number, the caller is a scammer. Report any scam calls, emails, or letters to acorn.gov.au
$3.5 billion has also been earmarked for the Climate Solutions package – aimed at ensuring Australia meets its emissions reduction target in partnership with Indigenous communities, small businesses, and farmers. This new injection of funds will go towards Australia’s emissions reductions, in line with promises made in the Kyoto agreement. With the Climate Solutions Fund, carbon emissions across Australia should be reduced to 65% of 2005 levels by 2030.
The Reserve Bank forecasts 5% unemployment rates through 2019 and 2020, followed by a slow decline. In April 2019, that prediction took a slight turn for the worse, with a small uptick in unemployment to 5.1%. Job losses have increased in bellwether sectors including retail, construction, and mining. In the past year, these sectors alone have constricted by approximately 140,000 jobs. However, 5.1% is .4% lower than the April 2018 figure, and across 2019, there’s been a total increase of 260,000 full-time and 50,000 part-time jobs.
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.
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.
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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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.
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