Ethical investment market reaches nearly $1 trillion
Big four need an extra $50billion by 2024 for capital rules
Australians accrue a record 140 million days of annual leave
On The Money - Episode 36
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The Reserve Bank of Australia has cut interest rates to a record-low level of just 1%. But financial experts expect the RBA will continue to cut rates in 2019. According to a recent RBA Cash Rate survey conducted by Finder, 73% of experts surveyed expect the Reserve Bank will continue cutting until the cash rate hits .75% or lower. The Australian economy only grew .4% in the March quarter of 2019, the slowest rate of growth since the end of the Global Financial Crisis in 2009. In addition, the broader property market slid .2% in June, bringing the year-to-date change in value to a negative 6.9% total.
Lodge PAYG withholding payment summary annual report for: large withholders whose annual withholding is greater than $1 million, and payers who have no tax agent or BAS agent involved in preparing the report.
Lodge and pay July 2019 monthly business activity statement.
Lodge and pay quarter 4, 2018–19 activity statement if you lodge electronically.
Lodge and pay quarter 4, 2018–19 Superannuation guarantee charge statement – quarterly if the employer did not pay enough contributions on time.
Lodge Taxable payments annual report.
Lodge and pay August 2019 monthly business activity statement.
Lodge PAYG withholding payment summary annual report if prepared by a BAS agent or tax agent. If a payer has only closely held payees and their tax agent helps prepare their report, they may be eligible for a concession to lodge this report by the due date of their tax return.
Lodge Annual TFN withholding report 2019 if a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries.
The government’s full tax package passed in the House of Representatives and the Senate. The personal income tax cuts total $158 billion, and were introduced in the 2019 Federal Budget, and build on tax cuts introduced in the 2018 Federal Budget. Labor voted for the controversial package of tax cuts following continued political pressure from the Liberal party which claimed its election win gave it a mandate for tax cuts. Stage One of the tax cuts, implemented now, will provide immediate tax relief of up to $1080 for low and middle income earners. Stage Two of the tax cuts will increase the 32.5% tax bracket to include those earning up to $120,000 from $90,000, while Stage Three – to be introduced in financial year 2024-25 – would see a flat tax rate of 30 per cent introduced for all Australians earning between $45,000 and $200,000.
According to a report created by Roy Morgan, Australia’s paid workforce have 140 million days of annual leave – and they’re taking less and less of it every year. This data is based on in-depth interviews conducted face-to-face with over 50,000 consumers. Of those surveyed, more than a quarter of the nation’s 10.9 million paid workers have four or more weeks’ worth of annual leave accrued, with 13.2% having more than five weeks. According to further research, the average Aussie only takes 14 of their 20 days of annual leave each year, leaving six days unused. This signifies a downward trend over the past 10 years — in 2009, Aussies only left 3.5 days unused. According to Roy Morgan CEO, Michele Levine, if Australians used their accrued leave to take holidays within the country, this could provide a potential boost to the economy.
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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