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March 2019

Australia – facts & figures March 2019

One great source of data about Australia.  Become better acquainted with the country we love.

         

 

An up-to-date snapshot of Australia's vital statistics.  

Please click on the following link to see all this interesting information. The areas covered are:

  • Overview
  • Markets
  • GDP
  • Labour
  • Prices
  • Money
  • Trade
  • Government
  • Business
  • Consumer
  • Housing
  • Taxes
  • Climate

 

Access all this data here.

 

tradingeconomics.com

Who wins dispute about taxable income?

The Administrative Appeals Tribunal (AAT) has affirmed the ATO’s decision, based on the taxpayers modest income when compared with a high volume of money passing through various accounts.

         

 

The taxpayer was employed as a beauty technician.

Her pay varied every week to reflect her working hours and she was always paid in cash without receiving pay slips.

While the Commissioners’ analysis of bank accounts, records of international money transfers and casino data suggested the applicant spent 44% in one year and 73% in another year more than the declared income.

In cases like this, the Commissioner is effectively making an informed guess as to the taxpayers income.

Provided there is a rational basis for the estate, the Commissioners assessment will stand, unless the taxpayer is able to:

  • demonstrate the assessment was excessive; and
  • establish what the correct (or more nearly) correct figure is.

In examples like this, the Commissioner nearly always wins.

 

AcctWeb

ATO identifies SMSF contravention red flags

The ATO has identified certain red flags and problem areas with SMSFs that will attract its attention, ahead of tax time 2019.

       
 
ATO assistant commissioner Dana Fleming said that the ATO received a total of 16,909 regulatory contraventions for 8,215 SMSFs in the 2018 financial year.
 
This financial year so far, there have been 8,412 regulatory contraventions for 3,549 SMSFs.
 
“The most common contraventions are related-party loans, loans to members, in-house assets, investing in related-party assets and separation of assets where members are not keeping their personal assets separate from the assets of the SMSF,” Ms Fleming said.
 
“Together, these top three account for more than 50 per cent of the contraventions reported to us and are the common repeated contraventions that we see.”
 
Contraventions relating to loans accounted for 21.1 per cent, in-house assets accounted for 18.7 per cent and failure to keep assets separate represented 12.8 per cent.
 
While the highest number of contraventions were for related-party loans, the contraventions relating to in-house assets and separation of assets represented the greatest value, she said.
 
“Contraventions also revolved around growing wealth in the SMSF environment and trying to access the low tax rate. Poor record-keeping is often a culprit here,” she said.
 
Some of the other contravention categories listed by the ATO related to administrative errors, sole purpose breaches, borrowings, operating standards and acquisitions of assets from related parties.
 
The main drivers of these contraventions, she said, tend to be financial stress and the ease of accessibility with SMSFs in terms of accessing assets and dollars and poor record-keeping to substantiate transactions.
 
In the 2017–18 financial year, there were a total of 257 trustees disqualified, Ms Fleming said. Enforcement actions including direction to rectify, enforceable undertakings and notice of non-compliance were taken for 180 trustees.
 
In this financial year so far, 75 trustees have been disqualified, she said.
 
 
Miranda Brownlee
01 March 2019 
accountantsdaily.com.au

Tax payable on expenditure recoupments

A Full Federal Court decision has confirmed a mismatch between capital expenditure and government grants.

       

 

A windfarm operator incurred significant expenditure which was depreciated.

Upon proving the expenditure, it received a substantial government grant.

The court decided this was an assessable recoupment which mean that the grant was assessable income in full in the receipt year, whilst the expenditure remained depreciable.

It therefore had to pay income tax up front when it was already cash flow deficient.

This is not a new interpretation, but seems as a reminder to take nothing for granted when it comes to tax.

 

 

AcctWeb

FBT Exemption for Various Work Vehicles

If an employer allows an employee private use of a vehicle, FBT generally applies.

           

 

There is an exemption from FBT for panel vans, utilities and other commercial vehicles, but only if the employees private use of these vehicles is limited to:

  • Travel between home and work
  • Travel that is incidental to travel in the course of duties of employment
  • Non-work-related use that is minor, infrequent and irregular
  • The employee uses the vehicle to travel between their home and their place of work and any diversion adds no more than two kilometres to the ordinary lengthy of that trip
  • For journeys undertaken for a wholly private purpose, the employee does not use the vehicle to travel more than 1,000 kilometres in total per year and no return journey exceeds 200 kilometres.

You may be familiar with the exemption for “minor, in frequent and irregular”, but these guidelines quantify what the Commissioner of Taxation expects – quite limiting!

 

 

AcctWeb

 

 

Extra website resources and tools is one way we offer you and your family more.

The following are available via our website and are not often available in the one place. All can save you time and effort. *

       

 

24/7 access to website-based tools and resources you, your family, your friends, colleagues and associates can all benefit from.

  • Latest News. 6-8 new articles every month and chosen from over 25 for their relevance. This means our website is a great place to stay informed.
  • Videos that are relevant, interesting, educational and interesting to watch. Videos that are regularly changed for another collection to ensure you’re able to lean about a significant number of related issues throughout the year.
  • Ask a question at any time. If you have a question on any related topic then don’t hesitate to use a form on our site to ask.
  • Comprehensive financial tools and calculators to help you better understand your personal or family Cash Flow position or simply complete a Budget or work on some Superannuation scenarios.
  • Research your questions. Use eWombat for doing this research by simply typing in keywords or phrases. Great and quick for searching sites like the ATO, Centrelink and ASIC.
  • Your information is private and confidential and should be treated that way. Using Secure File transfer or a Secure Client Portal means your information and plans are encrypted when sent in either direction over the Internet.
  • ASX Prices and Charts. Many sites will have these resources to allow you to quickly see how the market is going and check any stocks you’d like a price on. All such information is, though, delayed by 10 minutes.
  • Many sites also have a message window feature that displays messages of interest or that cover topics and deadlines you should be aware of.

* Not all are on every site.

 

Your Financial Planner

Big fines, prison on the cards as new SG penalties introduced

New laws introducing penalties, including imprisonment up to 12 months, for non-compliance of superannuation guarantee obligations have since passed, with accountants urged to bring clients up to speed.

       

 

Earlier this month, new legislation was passed, allowing the commissioner to issue a direction to an employer to pay an outstanding super guarantee liability, with failure to comply possibly resulting in criminal penalties.

Employers who receive direction from the commissioner must also complete an approved education course.

The maximum penalty for the offence is 50 penalty units, imprisonment for 12 months, or both.

Speaking to Accountants Daily, RSM senior manager Tracey Dunn said the new law might catch out small to medium-sized family businesses where a spouse or family member may be appointed as director without fully understanding their obligations regarding super payments.

“Obviously the criminal penalties will only apply to serious cases but unfortunately in a lot of small businesses, super guarantee payment are the first thing that goes and they are quite often behind because of cashflow issues so there will be a higher risk,” said Ms Dunn.

“For example, a husband runs a business and he is the brains of the business but the wife will be put in a position where she is a director. The accountant may discuss the director obligations with the husband but then rely on the husband to relay that to the wife and she may not ever fully understand what her risk is.

“They now face a criminal penalty if within a business, those compulsory superannuation guarantee payments aren’t made on time.”

Ms Dunn believes accountants will need to be on the front foot to help their clients understand the new risks.

“Accountants and advisers really need to ensure that when their clients employ staff, they are fully aware of the risk of non-compliance with super guarantee obligations,” she said.

“There is a real onus now on accountants and tax advisers to ensure their clients really fully understand what the risk is when they take a role as either an individual employer, the director of a trustee company, or a director of a company that is employing staff.”

Latest data from the ATO place estimates for the super guarantee net gap at $2.79 billion, with Ms Dunn believing that the new measure, along with the introduction of single touch payroll to all businesses, will see the gap shrink in the near future,

“With the measures in place now, it is a clear indication now that the government is extremely serious about ensuring that employees receive their compulsory super,” she added.

The new legislation is awaiting Royal Assent, with the legislation to take effect from 1 April 2019, but will apply to SGC obligations arising from 1 July 2018.

 

Jotham Lian 
01 March 2019
accountantsdaily.com.au

 

Resources to help understand and implement Single Touch Payroll (STP)

STP is a significant change for business tax compliance, though for now those businesses that need to make this charge have 20 or more employees.  Changes take effect on 1-7-2018, 12 months later for businesses with less than 20 employees.

               

 

In short, this change means that ‘you will report payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information from your payroll solution each time you pay your employees.’

The information and links listed below will help you quickly check or double check what you need to do to comply.  If you are having trouble or want to discuss cash flow and tax implications then ask your accountant.  But, above all, do not delay in getting ready for this change.

 

ATO resources and explanatory notes:

  1. About Single Touch Payroll
  2. Get ready for Single Touch Payroll
  3. Report through Single Touch Payroll
  4. Single Touch Payroll for employees
  5. News, events and resources related to STR
  6. Single Touch Payroll employer reporting guidelines

 

Source:  Australian Taxation Office (ATO)