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Crypto transactions in ATO sights with new data-matching program

Up to 1 million taxpayers who have engaged in buying, selling or transferring cryptocurrency will now be subject to ATO scrutiny as it begins a new data-matching program ahead of tax time.

       

 

The ATO will begin collecting data from cryptocurrency-designated service providers, under notice, to identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014–15 to 2019–20 financial years.

The Tax Office has estimated that records relating to between 500,000 and 1 million individuals will be obtained. 

The data-matching program will give the ATO visibility over whether taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership. These obligations may include registration, lodgement, reporting and payment responsibilities.

The ATO will give taxpayers 28 days to clarify any information that has been obtained from the data provider, before any compliance action is taken.

“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax,” said ATO deputy commissioner Will Day.

“Where people find that they have made an error or omission in their tax return, they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit.”

Cryptocurrencies have been in the Tax Office’s sights in recent years, with the latest data-matching program marking a renewed effort from the agency to stamp out non-compliance ahead of tax time 2019.

It is understood that the ATO will be working with other regulators, in particular the Australian Transaction Reports and Analysis Centre (AUSTRAC) and ASIC, as well as other international regulators as part of the Joint Chiefs of Global Tax Enforcement (J5) to investigate cryptocurrency-related tax evasion and money laundering.

Speaking to Accountants Daily, CPA Australia head of external affairs Paul Drum said that accountants should start asking clients about any cryptocurrency transactions as part of their tax-time checklist.

“If you don’t ask the question, you may not get the answer because many taxpayers see crypto gains and losses like betting wins and losses, and they are not thinking about it in an income tax context, so it is incumbent on advisers to ensure they ask clients and bring to their attention that there is a review going on and they might wish to make a voluntary disclosure before the Tax Office comes knocking on their door,” Mr Drum said.

“They are talking about 500,000 to 1 million taxpayers, and in a country with a population of 25 million, that is quite astounding that it’s the number that it has grown to already.”

Mr Drum said that it was vital that advisers raised the message with their clients early on, ahead of any action from the Tax Office.

“Many of them had a supernova moment in 2017. If you look at bitcoin, for example, it had a meteoric rise in 2017 and then an almost similar drop going from around $20,000 to about $7,300 now, so there will be taxpayers who may have undeclared realised gains from 2015, 2016, 2017 financial years, but now they are in losses because of the drop-off,” Mr Drum said.

“They may have realised gains in which they have a tax obligation that they haven’t declared for some reason or another — an honest mistake or tax evasion — and they won’t have any money to pay the bill because they’ve got losses after the event in a different financial year.

“If they left it in or traded one crypto for another crypto, unless they actually cashed out and banked the money, they might have ridden the market down and may have trouble paying any tax bill.”

 

Jotham Lian 
01 May 2019 
accountantsdaily.com.au

Government to establish $2 billion fund for small business lending

         

 

The Government has announced that it will establish a $2 billion Australian Business Securitisation Fund and an Australian Business Growth Fund to provide longer-term equity funding for small businesses.

Small businesses currently find it difficult to obtain finance on competitive terms unless it is secured against real estate. To overcome this, the proposed Australian Business Securitisation Fund will invest up to $2 billion in the securitisation market, providing additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms.

Encouraging news, but definitely a wait and see!!

 

 

AcctWeb

Small business corporate tax rates Bill is now law

           

 

The company tax rate for base rate entities will now reduce from 27.5% to 26% in 2020–2021, and then to 25% for 2021–2022 and later income years. This means eligible corporate taxpayers will pay 25% in 2021–2022, rather than from 2026–2027.

The new law also increases the small business income tax offset rate to 13% of the basic income tax liability that relates to small business income for 2020–2021. The offset rate will then increase to 16% for 2021–2022 and later income years.

The maximum available amount of the small business tax offset does not change – it will stay capped at $1,000 per person, per year.

Bringing forward small business tax cuts by five years

The Prime Minister has announced that the Government will bring forward its planned tax cuts for small business by five years. The Labor Party has also indicated it supports bringing forward the tax cuts.

This means businesses with a turnover below $50 million will pay a tax rate of 25% in 2021–2022, rather than from 2026–2027 as currently legislated.

It would seem that regardless of the Federal election outcome, business income taxes are reducing in percentage terms.

 

 

AcctWeb

 

ATO to double rental deduction audits to 4,500

ATO audits of rental deduction claims will double this tax time as the agency reinforces its claims that nine out of 10 deductions contained an error.

       
 
Accountants with clients who have rental properties have been warned of the ATO’s “top priority” for tax time 2019, after Commissioner Chris Jordan said that a random audit sample of returns with rental deductions found that 9 out of 10 contained an error.
 
ATO assistant commissioner Gavin Siebert said that taxpayers can expect the number of in-depth audits to more than double this year to 4,500, with a specific focus on overclaimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others, and omitted income from accommodation sharing.
 
In 2017–18, the Tax Office audited over 1,500 taxpayers with rental claims and applied penalties totalling $1.3 million.
 
In one case, a taxpayer was penalised over $12,000 for overclaiming deductions for their holiday home when it was not made genuinely available for rent, including being blocked out over seasonal holiday periods.
 
Another taxpayer had to pay back $5,500 because they had not apportioned their rental interest deduction to account for redraws on their investment loan to pay for living expenses.
 
“We use a range of third-party information including data from financial institutions, property transactions and rental bonds from all states and territories, and online accommodation booking platforms, in combination with sophisticated analytics to scrutinise every tax return,” Mr Siebert said.
 
“Where we identify claims of concern, ATO staff will investigate and prompt taxpayers to amend unjustifiable claims. If necessary, we will commence audits.
 
“Once our auditors begin, they may search through even more data including utilities, tolls, social media and other online content to determine whether the taxpayer was entitled to claims they’ve made.”
 
The key issues
 
The Tax Office will take a closer look at loan interest, whereby some taxpayers have been using some of the loan money for personal use such as paying for living expenses, buying a boat or going on a holiday and then claiming that loan interest as a deduction.
 
Rental property owners have also been warned on properly differentiating between capital works and repairs, and what is deductible immediately or over a number of years.
 
The correct apportioning of holiday homes being let out to family or friends below market rates will also be scrutinised.
 
This week, the ATO also reminded tax agents that the ability to claim travel to residential rental properties was no longer allowed, ever since rules changed from 1 July 2017.
 
 
 
Jotham Lian 
18 April 2019 
accountantsdaily.cpom.au
 
 

ATO set to issue excess super contribution determinations

         

 

The Australian Taxation Office has started issuing excess concessional contributions (ECC) determinations for the 2017–2018 financial year. Superannuation fund members will receive these ECC determinations if they have made super contributions above the concessional cap amount for 2017–2018.

“Concessional” contributions are taxed at the reduced rate of 15% in your super fund, but there’s a limit to how much you can contribute at this rate ($25,000 for 2017–2018).

Fund members may also receive an amended income tax return assessment together with the ECC determination, and may need to pay additional amounts to the ATO. This is because any super contributions you make over the concessional cap need to be included in your assessable income for the financial year, and an interest charge applies.

Salary sacrifice arrangements need to be carefully reviewed each year.

 

AcctWeb

 

 

How’s Australia going as we approach the election?

         

 

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.

Single Touch Payroll (STP) is compulsory for all small businesses.

STP is mandatory for all small Australian businesses with 19 or less employees and it starts on the 1st July 2019.  Are you ready?  Your Accountant can help with any questions you have.

Some basic questions that are being asked and the answers.

       

 

What is STP?

Single Touch Payroll (STP) is a new way of reporting tax and super information to the ATO. … 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.

Is STP compulsory?

Single Touch Payroll is already compulsory for businesses with 20 or more employees. Those businesses already report their employees' payroll and super information to the ATO each time they pay their employees. 

From the 1st July 2019 STP becomes compulsory for all businesses, not matter how few employees they have.

What is STP Australia?

Single touch payroll is a new regulation that changes when and how small businesses report payroll activity to the Australian Tax Office (ATO). Now, they need to send a report after each pay day.

What are the benefits of STP?

Single Touch Payroll is the government trying to align reporting obligations to payroll processes. With STP, business owners can submit payroll information, such as salaries, allowances, deductions, PAYG and super, immediately after a 'payroll event' – avoiding the need for action at a later date.

Click here to for more information and resources on the ATO website.

 

Australian Taxation Office – ATO

‘Big awareness push’ underway as STP deadline approaches

Hundreds of thousands of businesses have been prompted by the ATO to get started with their Single Touch Payroll provisions, and its project lead at the tax office believes the business community is better prepared than it was for last year’s deadline.

         

 

Through email and national advertising campaigns, the ATO is drilling in the 1 July deadline for STP, which applies to businesses with 19 or fewer employees.

Assistant commissioner at the ATO John Shepherd thinks accountants, bookkeepers and their small business clients are better prepared for this deadline than they were for the first one in 2018, which applied to businesses with 20 or more employees.

“The knowledge levels have come up… bookkeepers are helping with that message and that preparation,” Mr Shepherd told Accountants Daily at the Accounting Business Expo on Wednesday.

Many software providers weren’t ready for last year’s deadline, which had a knock-on impact on the business community.

“Last year, a lot of the products were only just ready. This time, a lot more are ready, and they are ready with options for smaller employers,” Mr Shepherd said.

However, at this stage, there are more STP products in development and slated for release than there are products that are ready for implementation.

At the beginning of April, information for and access to deferrals for STP will be published on the ATO’s website. There are quarterly reporting options for micro-businesses as part of the transitional arrangements.

 

Katarina Taurian
21 March 2019
accountantsdaily.com.au

GST collection on overseas goods at 300% of forecasts

GST collection for low value imported goods is tracking at 300 per cent of forecasts, as overall GST collection continues to grow.

       

 

Since new laws kicked in on 1 July last year, GST will apply to sales of low-value, imported goods valued at $1,000 or less, to consumers in Australia, in a bid to ensure that such imported goods receive the same treatment as goods purchased domestically.

Deputy Commissioner Tim Dyce said latest revenue figures show that digital marketplaces and lower value international online sales were not an impossible nut to crack.

“The digital services measure has already achieved $272 million GST in the first year or 180 per cent ahead of forecast. We’ve collected $81 million from the low value imported goods measure in the first three months of operation, already above our full year revenue estimate of $70 million. We’re tracking at over 300 per cent of forecast,” said Mr Dyce.

“There was a lot of discussion prior to their introduction about whether these kinds of measures could possibly work, and in many ways it is the most significant change in the way we have collected GST since its inception almost exactly 20 years ago.

“Not only have we had high levels of registration for these measures and well above forecast revenue, we’ve even had feedback from some online sellers that the registration has improved their business processes and given them greater insight into their sales performance.”

The measure, first announced in the 2016–17 federal budget, was expected to raise $300 million over three years.

The ATO’s GST administration annual performance report for 2017–18 showed that the agency raised $63.1 billion in GST cash, 5.5 per cent higher than in 2016-17.

A further $3 billion in GST liabilities was raised through the ATO’s direct compliance activities – a 5.6 per cent increase on last year’s outcome. The Department of Home Affairs raised a further $31.1 million through its compliance activities.

 

Tax&Compliance Reporter
28 March 2019
accountantsdaily.com.au

 

The problem with getting to 53 years of age.

Here's some food for thought and another reason why getting professional help from a financial planner is worth serious consideration.

         

 

Previous articles in this series, which are based on research conducted by Vanguard Investments Pty Ltd, show that a financial planner adds around 3% to what would be the expected return of an investment portfolio. In other words, they provide the expertise and time needed to help you attain your retirement goals and they can help cover their costs at the same time.

However, more research from the Vanguard Investments stable focuses on the significance of the age of 53.

53 is when most of the costs of parenthood are on the decline, a cause for great celebration, but, sadly, it seems declining also is our 'financial capability'. This research has its fair share of confusing terms and definitions such as 'crystalised intelligence' (‘wisdom’ to you and I), 'fluid intelligence' (which peaks, unfortunately, in our early 20's); and 'financial capability'.

When all this is mixed together and the graphs and charts have been drawn the result is that 'the peak age for financial decision-making is…53!'. Ouch!!, and at a time when most of us need the opposite to be true, ‘c'est la vie’.

While many of us are still capable, this research indicate that after we reach 53 another benefit of employing the expertise of a financial planning practice is that their input is provided when we need it the most. That is, during the final 10 year run up to retirement, when there's still time to generate the retirement outcomes you want.

The following are some of the big decisions to be made around the age of 53.

• How do we make the transition to retirement?

• How do we structure our finances to generate an income and deliver capital gains?

• How do we maximise our government entitlements?

• What tax issues need to be considered?

• Will we have enough given our current financial position?

These are big decisions and when relying on your own resources, it’s worth remembering that sometimes we just don’t know, what we don’t know!

 

Peter Graham 
BEc, MBA
General Manager
PlannerWeb / AcctWeb

 

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