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tradingeconomics.com

Reminder on Victoria Property Duties

       

 

Property transfers between spouses and de facto partners in Victoria involving commercial and/or investment properties will incur stamp duty costs at 5.5%.

 

This means that assets that do not constitute a principal place of residence are no longer exempt from transfer stamp duty.

 

A spouse to spouse transfer of the principal place of residence remains exempt from stamp duty.

 

Until 1 July 2017 all transfers of property between spouses was exempt from stamp duty.

 

Commencing business as a sole trader often raises the asset protection concern – so transferring ownership of the family home to the non-business spouse, is a common recommendation of advisers.

 

ATO set to contact clients for overdue TPAR

The Tax Office will begin contacting clients in the building and construction industry about their overdue taxable payments annual reports.

         

 

In an online update, the ATO has announced that tax practitioners who have clients in the building and construction industry, will begin to receive a list of their clients and the years overdue for their TPAR obligations.

“If your clients have not lodged their 2018 or prior year taxable payments annual reports, now is the time to get them back on track to avoid penalties,” said the ATO.

In October, the taxable payments reporting system (TPRS) was extended to the courier and cleaning industries, with a retrospective start date of 1 July 2018.

This was closely followed by an extension to the road freight, security, investigation, surveillance and information technology (IT) industries, with a start date of 1 July 2019.

The TPRS is a transparency measure that was first applied to the building and construction industry, recouping an extra $2.3 billion in its first year of operation in 2012.

Tax practitioners and bookkeepers have been urged to start educating clients on their obligations and ensuring that business clients start keeping records of contractor payments.

It is understood that the new, online TPAR form will allow further functionality, including the ability for tax and BAS agents to see client taxable payments annual report lodgment history.

“This form will be made available to inpiduals in business via MyTax initially, then progressively being made available in the Business Portal, Online Services for agents, and third party software,” the ATO BAS Agent Association Group said last year.

 

Jotham Lian 
30 January 2019
accountantsdaily.com.au

Fuel tax credit rates raised

The ATO have raised the fuel tax credit rates following an update of the December quarter consumer price index.

         
 
The ATO have raised the fuel tax credit rates following an update of the December quarter consumer price index.
 
From 4 February, rates for liquid fuels and blended fuels for heavy vehicles travelling on public roads will rise to 15.8 cents per litre, while all other business uses will see rates rise to 41 .6 cents per litre, up from 15.4 and 41.2 cents respectively.
 
Fuel tax credit rates change regularly. They are indexed twice a year, in February and August, in line with the consumer price index (CPI).
 
Pitcher Partners customs, fuel tax and international trade director Darryl Daisley previously told Accountants Daily of some common issues he sees claimants struggling with.
 
“Where we’re seeing clients coming unstuck is not getting the right rate for that particular fuel, not identifying and correctly allocating the right portion to either an off-road or on-road environment and then you have to look at when you bought that fuel,” Mr Daisley said.
 
“The way the scheme is structured is that the small- to medium-sized to large guys, the Tax Office’s expectation is that they would like everyone to claim monthly because it goes onto the BAS, and there is a healthy portion of clients who don’t get in their claims monthly and may take a number of months before they work their claim in.
 
“So it’s just an added complexity of getting the right dates, the rates, the type of fuel – you may need to apportion, and some of the fuel may be ineligible for a fuel tax credit depending on your mix of your fleet and the type of vehicles that you use.”
 
 
Tax&Compliance Reporter 
04 February 2019
accountantsdaily.com.au

Correcting GST Errors

         

 

If a taxpayer finds a mistake made on a previous activity statement, they can:-

  • Correct the error on a later activity statement if the mistake fits the definition of a “GST error” and certain conditions are met;
     
  • Lodge an amendment – the time limit for amending GST credits is four years, starting from the day after the taxpayer was required to lodge the activity statement for the relevant period; or
     
  • Contact the Australian Taxation Office (ATO) for advice

The benefit of correcting a GST error on a later activity statement (where the conditions are met) is that the taxpayer will not be liable for any penalties or general interest charge (GIC) for that error.  The ATO says it is generally easier to correct a GST error on a later activity statement than to revise an earlier activity statement.  Revising an earlier activity statement that contains an error can incur penalties or GIC.

Accountants often prefer to amend the activity statement, to match the returns better with the accounting records, particularly if that results in an extra refund.

 

 

AcctWeb

Jail time for GST fraud

Warning:  Very recent cases where GST fraud have landed business people in jail.

         

 

One example:  A luxury property developer who caused a loss of $3.4 million to the Commonwealth through GST fraud has been sentenced to six years’ jail after an ATO investigation.

Manly man Benjamin Ensor was sentenced in the NSW District Court to six years in jail and ordered to pay reparations of more than $1.8 million.  Ensor’s conviction came after an ATO investigation found he had structured his companies to fraudulently obtain GST credits and failed to report property sales to avoid paying GST, causing a loss to the Commonwealth of $3.4 million.

Between 2008 and 2011, Ensor lodged false BAS statements on behalf of nine companies of which he became the sole director, using the money he obtained to fund the purchase of luxury items including a marina at Lake Macquarie, a catamaran and a unit to live in.

The funds were also used to meet expenses incurred during the course of developing five beachfront luxury apartments in Manly.  He reported his companies’ expenditure was more than $24 million and claimed more than $2.2 million in GST refunds.  He also failed to report the sales of the Manly apartments on which he should have paid GST of more than $1.5 million.

In making GST refund claims, he created false invoices that showed related companies provided project management services, and produced fraudulent invoices for the purchase of high-value excavators, trailers, trucks and catamarans.

ATO assistant commissioner Aislinn Walwyn said the conviction represented the agency’s stance against illegal phoenix behaviour and tax crimes.  “This case exhibits classic illegal phoenix behaviour. Companies were deliberately liquidated to avoid paying creditors and taxes. New companies continued operating the same or a similar business with the same ownership,” Ms Walwyn said.

 

Another example:  The Maroochydore District Court sentenced David Latemore to two and a half years in jail for GST fraud and ordered him to repay more than $130,000 that he fraudulently obtained.

Between October 2008 and February 2013, Latemore lodged eight BAS and fraudulently obtained $138,723 in GST refunds and attempted to obtain a further $962,772.  Although Latemore stated that he was the director of a motor vehicle and yacht business, an ATO audit found the company had no business activity, did not make any business sales or purchases, had not paid any GST and had no entitlement to receive the GST refunds claimed.  He also supplied false documents to the ATO to support his claims.

 

Jotham Lian (composite of two articles)
29 January and 4th February 2019
accountantsdaily.com.au

 

Instant asset write-off threshold upped to $25k

The government has increased the threshold for the instant asset write-off to $25,000 as it looks to entice the small business sector ahead of a federal election.

           
 
Announced yesterday, Prime Minister Scott Morrison has pledged to increase the small business instant asset write-off to $25,000 from $20,000.
 
The write-off will be available for small business with an annual turnover of less than $10 million and will apply until 30 June 2020.
 
The government will be seeking to legislate the change when Parliament resumes on 12 February.
 
This measure is estimated to have a cost to revenue of $750 million over the forward estimates period, with an estimated 3 million small businesses eligible to access the write-off.
 
“The $25,000 instant asset write-off will improve cash flow by bringing forward tax deductions, providing a boost to small business activity and encouraging more small businesses to reinvest in their operations and replace or upgrade their assets,” Mr Morrison’s office told Accountants Daily.
 
The government’s decision to raise the threshold comes after Labor announced that it would introduce the Australian Investment Guarantee, a permanent feature which will allow businesses to immediately deduct 20 per cent of any new eligible asset worth more than $20,000.
 
Labor has also pledged to introduce a dedicated small business minister in cabinet if it forms government.
 
 
Jotham Lian 
30 January 2019 
accounantsdaily.com.au

Strategies to handle scam phone calls and problem e-mails.

         

 

Many people have received telephone calls, recorded messages and e-mails from scammers claiming to be from organisations such as the ATO, Australia Post and Telstra saying money is owed, asking for personal information or access to their computer. One recorded message supposedly from the ATO informs you ‘you have committed tax fraud and a warrant is out for your arrest’! Another very popular scam is to say that there is a problem with your internet or a security flaw in your computer’s firewall or similar.

Why do scammers succeed?

Unfortunately, the main reason is the person receiving the call or e-mail.  Scammers are trained in looking for signs of hesitancy or weakness and when they sense this they are merciless.  The real problem is that the scammers know well the topics that will attract or scare people into action: monies owed, a big win, a technical issue, or to help someone. 

Scammers are paid based on their success and they are highly trained in keeping people engaged and on the line. 

Phone calls.

You need to be strong if you’re to avoid being caught out and the simplest way to do this is ask who they work for, what is their phone number, say you’re not interested and hang up. Or, call them out and say they are ‘a scam call’, then they often hang up on you.  Phone scammers are inventive and some are ‘Phone spoofing’, this is when someone disguises the number they are calling or texting from by changing their caller ID. They hijack or imitate phone numbers, either to imitate a person, business or department to get money or information. They often choose interstate numbers so you do not immediately know you are answering an overseas call centre or potential scam call.

The best strategy though, is not to let them talk for more than a few seconds, and hang up. Hang up too soon or and they will keep ringing you back!

Major organisations will never ring up and ask for access to your computer or threaten that a warrant is out for your arrest. If a demand is made that relates to the ATO then call your accountant to make sure if ATO debts are owed and when.

E-mail scams & viruses

Common scam emails currently doing the rounds are invoices from companies that either do not exist or scam emails from organisations like ‘Australia Post’ (you have a package being delivered) or ‘ASIC’ (you have a tax debt).  We may suspect they are fraudulent but too many of us still respond.

The compulsion to open that invoice or attachment is strong.  Remember, everyone's e-mail address may be on scammers' lists so you will be exposed. 

A second, and dangerous risk, from such e-mails is that they can have infected attachments and links that can do real damage to you, your computer, your business’s computer network and your files.  Ransom ware is still out there.

Three things that help with scam, spam and malicious e-mails.

  1. Simply delete them but some businesses and corporations use e-mail to save costs for statements and invoices and other information, so you have to be vigilant not to delete these by mistake. 
     
  2. This is your best defence and relates to the sender’s e-mail address.  It is NOT possible for a scammer to use the exact same domain name as, say, the ATO or AFP.  HOWEVER, they are getting very close.  When you receive an e-mail, ALWAYS check the URL address it came from before reading or clicking – specifically the part after the @ sign. You will notice that many after the @ sign are simply ridiculous, but you will also receive some that have the supposed sender in the address, for example @ato.zzz.net.au.  Always remember that the ATO bit is part of the zzz.net.au domain (the spammer) and NOT the ATO's domain.  If in doubt contact the business or organisation by phone or a known email address to confirm email content.
     
  3. The Subject line.  There is a field of marketing that focuses on how to get people to react to a Subject line.  So, reacting quickly to a subject line about a fine from the ATO is exactly what the scammer is hoping for.  A subject line like this can make you click on part of the content or attachment before you think of reading or checking the sender’s address.

 

Peter Graham
AcctWeb, an ISP and domain hosting company for over 20 years.

Australian Taxation Office (ATO) Scam Alert: Fake Demands for Tax Payments

         

 

The ATO has noticed an increasing trend of scammers demanding tax payments through Bitcoin and ATMs.

The ATO’s advice is simple; it will never ask a person to make a payment into an ATM or via gift or pre-paid cards such as iTunes and Visa cards or ask for direct credit to be paid to a personal bank account.

Taxpayers who lodge through a registered tax agent generally have longer to pay their bill and will be advised by their tax agent if and when any tax payment is due.  However, the ATO warned that scammers have been known to attempt to impersonate tax agents too.

The golden rule – hang up if you don’t already know the person and ring us.

If you want to report the call, the ATO toll free scan line is 1800 888 540.

 

 

AcctWeb

Expiry of 900,000 interest-only loans set for January

If you feel a bit aggrieved by having to move away from a workable interest only loan then you won't be alone.  Apparently there are 900,000 loans in the same boat!

         

 

New market research indicates about 900,000 interest-only loans will revert to principal and interest payments this month, following a tougher year on the mortgage market for property investor clients.

Comparison site finder.com.au drew this estimate from an analysis of housing finance data from the Australian Bureau of Statistics (ABS).

The expirations follow restrictions from the banking regulator, APRA, on interest-only lending. APRA’s cap saw interest-only loan approvals fall by about 55 per cent in the 12 months to June 2018.

APRA’s restrictions and the revelations of the royal commission also formed part of the reason individuals and businesses alike struggled to secure or extend financing arrangements in 2018.

While IO approvals are dropping, the demand remains strong, according to finder.com.au’s data, which shows that despite house values continuing on its downward slide and the RBA trying to discourage Australians from taking on riskier debt, nearly a quarter of investors and one in five owner-occupiers are seeking IO loans.

For those already in interest-only contracts, the switch to principal and interest could add an additional $400 a month to borrowers’ repayments – or about $5,000 per year – based on current interest rates.

APRA announced plans to ditch its cap on interest-only lending in December last year, taking effect this month.

 

Business Reporter
04 January 2019
accountantsdaily.com.au

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