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Vital statistics for our great nation.

         

 

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.

3 out of 4 tax dob-ins are about business

The Tax Office has confirmed that the majority of “tip-offs” it receives about possible tax avoidance are related to business, amid concerns competitors may play dirty by “dobbing in” innocent businesses.

           

 

The ATO recently revealed it is on track to receive more than 70,000 tip-offs about undeclared income and dodgy tax practices this financial year — a major increase on the 51,000 received last year.

“We’re seeing an upwards trend in the volume of referrals about people suspected of participating in the black economy, which suggests that honest businesses have had enough of competitors cheating the system and getting an unfair advantage,” said ATO assistant commissioner Peter Holt at the time.

At least one My Business reader expressed concerns that some of these tip-offs may have nefarious intentions.

“My concern is what happens if someone wants to cause harm to a business or person out of spite?” the anonymous commenter said.

“Dobbing is very un-Australian and I believe that guidelines should be given so that people know what is a tax dodge and what may be a legitimate occurrence of payment either way.

“Many small business[es] receive cash or pay cash to non-tax-claiming employees such as casual jobs of a couple of hours to teenagers for simple jobs.”

Almost three-quarters relate to business: ATO

The ATO was approached for comment on these concerns about the authenticity of tip-offs it receives.

While it did not directly respond to questions about the proportion of tip-offs that are found to be unsubstantiated, the ATO confirmed via a spokesperson that not all reports lodged result in action being taken.

“We take all tip-offs seriously. All information is assessed and referred to experienced staff who consider the information provided with other indicators to determine the veracity of risk and if any further action is required. We do not take action on all reports,” the spokesperson told My Business.

The spokesperson did, however, confirm that the majority of tip-offs it receives are business related.

“The new Tax Integrity Centre system will enable better reporting capability. However, at a high level, approximately 70 per cent of tip-offs were where someone identified a business,” the spokesperson said.

That would equate to around 49,000 of the projected 70,000 tip-offs the ATO will receive for the 2018–19 financial year.

My Business was advised that the ATO does not keep track of an individual’s motivation for making a tip-off.

New tip-off website set to launch

Asked about what guidelines are provided to taxpayers who may want to lodge their concerns about a third party, the ATO said that it is preparing to launch a dedicated reporting guide.

“From 1 July, our website will be updated (ato.gov.au/tipoff) to include information to support providing a tip-off, including how to make a good tip-off and what information to provide,” the spokesperson said.

“Our hotline staff have [also] received additional training.”

The spokesperson urged anyone making an honest tip-off to be as detailed as possible.

“Even if you only know part details, this information is still very useful,” they told My Business.

“To help us to identify who you are reporting, proving information like their name, an ABN and any social media details are helpful.

“If you know, it is also helpful for us to hear about:

  • what they are doing and where it is happening
  • how long it has been happening
  • information about others involved
  • any advertising they are doing
  • copies of receipts or other materials you have that support your report
  • details of any supporting information you are aware of, what it is and who holds it

 

 

Adam Zuchetti 
27 June 2019 
accountantsdaily.com.au

 

Tax on compensation received for inappropriate advice

Again, the answer to a tax question is “it all depends”.

       

 

On the heels of the banking and financial services Royal Commission, the Australian Taxation Office has published information about how tax applies for people who receive compensation from a financial institution that provided inappropriate advice and/or did not provide advice it should have. This can include compensation for the loss of an investment, or a refund of fees or interest.

Capital gains tax comes into play, and the compensation amount may count as part of your assessable income if it’s a refund of adviser fees that you’ve already claimed as a tax deduction.

Contact us if you’ve received compensation from your bank or adviser and need to know more.

 

 

AcctWeb

‘Extra care’ crucial in avoiding ATO spotlight this tax time

Tax agents have been urged to apply “an extra bit of thought and extra care” into handling clients’ claims this tax time as ATO scrutiny mounts.

         
 
Speaking to Accountants Daily, H&R Block director of tax communication Mark Chapman said that a combination of factors — the publication of the $8.7 billion individual tax gap and a major increase in ATO funding — has created a perfect storm for the Tax Office to come down hard on errant claims this year.
 
“The ATO has done their research on it and they’ve got this $8.7 billion tax gap figure in their minds, so they’ve got a bit of science behind their suspicions regarding work-related expenses,” Mr Chapman said.
 
“They’re not just looking at clients, they are profiling tax agents, so if the claims you are putting through are outside the benchmarks for other tax agents, that can increase scrutiny on the agent themselves.
 
“They risk-profile every tax agent these days and if you fall well outside these benchmark,s then you can expect the Tax Office to turn up on your doorstep and going through your files.”
 
Mr Chapman, a former senior director at the Tax Office, believes agents can steer clear of any potential scrutiny this tax time by have a firm grasp of the tax law and applying some common sense to claims.
 
“The ATO sometimes tries to put across this message that they almost expect tax agents to audit their clients before they lodge their returns, and I don’t buy into that at all, but just using your common sense and that feeling about whether something stacks up, and if it doesn’t, ask some questions and take some notes to justify why the claim is being made,” he said.
 
“If you just put in that extra bit of thought and extra care, that will pay dividends for the client because they won’t be audited and pay dividends for the practice because you won’t get that ATO spotlight on you for making incorrect excessive claims.”
 
Mr Chapman also believes it might be prudent to turn away clients who are aggressive with their claims.
 
“Sometimes clients come into the office and are very forceful about what they want to claim, very forceful about what they are entitled to, and if you don’t put the claim through they will go somewhere else,” Mr Chapman said.
 
“If a client takes that attitude then, unfortunately, you might have to prepare to tell them to go and find someone else because you don’t think these claims stack up.
 
“A lot of it comes down to understanding the basics of tax law, and secondly, it comes down to the common sense understanding of what claims stack up and what don’t.”
 
 
Jotham Lian 
27 June 2019 
accountantsdaily.com.au
 

ATO clears up FAQs about Single Touch Payroll

Ahead of the 1 July deadline for small business to be compliant with the new Single Touch Payroll (STP) regime, the ATO and professionals alike have cleared up some common points of confusion about associated AUSkey and myGov requirements.

       

 

The ATO’s project lead for STP, John Shepherd, joined a panel of professionals to discuss the practical implications of STP earlier this week. You can access the webcast here.

AUSkey requirements

A common point of confusion for small business is whether an AUSkey is required as part of STP regime.

Mr Shepherd clarified that whether a business will need its own AUSkey will depend on the type of software they use.

“Some products don’t require the employer to get their own AUSkey,” he explained.

The ATO’s website states the following around the use of an AUSkey for STP:

“Your software can connect directly to the ATO using a device AUSkey (more common for larger employers).

“Alternatively, your software may connect to the ATO using a software service ID (SSID) which is usually displayed by your software during the STP setup.

“You or your registered agent will need to provide the ATO with your SSID. To do this phone 1300 852 232, or complete a one-off notification through Access Manager (you need an AUSkey to use Access Manager).

“We will not be able to receive your STP report without the correct SSID.

“Another option is your software may connect to the ATO through a sending service provider (SSP). If this is how your software connects to the ATO, you do not need to contact the ATO to set up a connection. Your SSP will do this for you.”

myGov accounts

Small business owners will not need to open a myGov account to be STP compliant.

“myGov is a whole-of-government access to services, through one sign-in. What that allows you to do is to see that superannuation information that had been reported, as well as your STP information that’s been reported, so each inpidual can see that through there,” Mr Shepherd explained.

“But it won’t be mandated.”

He did, however, recommend that anyone who does not have such an account set one up, because of the availability of customised information through the portal.

“It is the way, if you want to get access to your income statement, that you will get that at the end of the year rather than from your employer anymore.

“We suggest it’s a good thing to do, because it gives you access to better services, better information about your inpidual circumstances … and you also get access to all your super accounts and you can roll them over.”

Mr Shepherd also recommended that employers notify their staff ahead of the transition to STP that personal income summaries will no longer be issued, and that this information will be made available to them through their own myGov account.

New milestone

Mr Shepherd also revealed the ATO has hit a new milestone with STP, with over 100,000 employers now reporting through the new system.

He also talked through the ATO’s future plans with this and similar technology, which you can access here.

 

 

Adam Zuchetti 
16 May 2019
accountantsdaily.com.au

 

GST reporting: common errors and how to correct them

        

 

Some businesses are making simple mistakes reporting their GST.

Common GST reporting errors are:

  • transposition and calculation errors – these mistakes often happen when manually entering amounts, so it’s important to double-check all figures and calculations before submitting your BAS;
     
  • no tax invoice – you must keep tax invoices to be able to claim GST credits on business-related purchases;
     
  • transaction classifications – it’s important to check what GST applies for each transaction; for example, transactions involving food;
     
  • errors in accounting systems – a system with one coding error can classify several transactions incorrectly; and
     
  • rents and outgoings entitlements depend on the landlords status

 

 

AcctWeb

LRBAs, guarantees in need of review after property market falls

With property markets taking a tumble in recent times, some SMSF clients may need to review the loan arrangements and guarantees they have, particularly where the loan-to-value ratio has significantly dropped, says an industry lawyer.

       

 

Speaking in a seminar in Sydney, DBA Lawyers director Daniel Butler said the property market has been under some stress recently, and while it may see a bit of a rebound with Labor’s property tax changes off the table, some SMSFs may be impacted by the recent fall in property values.

Mr Butler said the ATO has previously raised concerns about the amount of property loans held by SMSFs and guaranteed by assets outside of super such as the family home.

“If the market collapses, this is going to affect retirement savings and personal assets,” Mr Butler said.

Mr Butler explained that there were two types of guarantees: unsecured guarantees and secured guarantees.

“We have noticed a movement out there, typically with non-bank institutions, that they want that guarantee to be supported by a security or a charge or mortgage over the home or property owned by that guarantor,” he said.

While the fact that it is a limited recourse loan means that the security including any related guarantees should be limited to the value of the acquirable asset, but often they are not.

“You have to read and check it. I read one the other day that said that any asset you hold on trust is also up for grabs. Some of them also say, well, if it’s interest and cost and damages, we can also claim that back, even default interest,” he said.

SMSF professionals and their clients need to be very mindful of the extent of these guarantees, he cautioned, particularly if the client is entering negative equity.

The documents that deal with the guarantee for the loan arrangements may need to be reviewed for those clients who are in that risk category, he advised.

“That would be those that bought an apartment and it’s now close to negativity equity and the they’re getting light on the loan-to-value ratio (LVR) because the property value has sunk but the loan is still there and they’re no longer over their 70 per cent threshold,” he said.

This also needs to be looked at with related-party loans, because if the LVR is no longer under the 70 per cent, then they may need to restructure.

SMSF practitioners should offset their liability by encouraging their clients to get these documents reviewed. 

 

 

Miranda Brownlee
22 May 2019
smsfadviser.com

 

Victorian Property Valuation Cycle

Valuations of Victorian properties are now undertaken annually instead of every two years.

       

 

When you review the council rate notices for Victorian properties, the valuation is likely to be higher for Melbourne properties.  No so, in the country.

Thereafter a benefit to the revenue of each Melbourne based council.

Since this change seems to be driven by State budget efforts to increase revenue from land tax (and council rates) earlier, will this work in reverse when properties are falling in value?

If the valuation appears too high, owners can appeal the valuation, but it must be done promptly or wait another year.

 

 

AcctWeb

Australia – toward EOFY 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/australia

ATO expects 200,000 to miss out on refunds by failing to lodge

         

 

The ATO expects that 200,000 people could miss out on a tax refund this year because they haven’t lodged a tax return.

Many salary and wage earners end up with a tax refund, but some are missing out because they fail to lodge on time.

Taxpayers had until 31 October to either lodge their own return, or ensure they are on an agent’s books. Failing to lodge by the deadline can attract a penalty of $210 for every 28 days that the return is overdue, up to a maximum of $1,050.

Have you run out of time to sort out your tax return this year? We’re here to help – get in touch to talk about your options.

 

 

AcctWeb

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