13 Steps To Apply ABN As An Sole Trader

ABN Application

The ABN is a unique 11 digit number that identifies your business or organisation to the government and community. It is relatively easy to apply ABN on your own, here are break down steps to apply an ABN from Australian Business Register.

You will need to go into the ABR link provided above and go through the following prompts in order to apply for an ABN. The process will be as follows:

  1. Click the apply for an ABN button.Applyinig for an ABN
  2. Tick the following button after reading through the important information.Important information
  3. Tick through the following points.*Note: most contractors would apply as a sole trader, and we will be going through this process as a new tutor applying for an ABN as a sole trader as an example.
  4. Check your details and proceed on to the next section, Application detail.Australian Business Number
  5. Fill in the details as shown below and head to the next section, Business information.Application Details*If you happen to not have an individual Tax File Number (TFN), make sure to tick no and yes for the last two questions respectively instead.
  6. Tick the following button and proceed.Business Information*If you happen to be using a tax agent, ask them for their information for this and the associate details section.
  7. Fill in your own details and make sure it matches relevant identity documents (Passport, Birth Certificate, etc.) and proceed.Business Information Continued*If you happen to have an individual TFN, make sure to fill in the last question from the photo above.
  8. Fill in the details as shown belowBusiness Information continued 2*Note: If you intend to engage in your business for less than 3 months, make sure to provide an approximate finish date.
  9. Fill in your own details for the section below and proceed. Business Information Continued 3*Note: You are allowed to put your home address are your business address even if you provide your tutor services outside.
  10. Fill in the details for your business (it can be the same as your personal details) and proceed to next section, Reason for application.Business Information Continued 4
  11. Insert the following options and head to the last section, the Declaration. Reason for appllication                                                                                
  12. At this point, go back and ensure all details you filled in are correct. Then fill in your own details and set the date you completed this on, print a form and save to your own personal files, and then hit submit. Declaration                                                                     
  13. Now, you just have to wait for confirmation from the ABR, but ABR may also ring up to inquire further documentation/questions before confirmation.

If your application is successful:

  • you’ll receive your 11-digit ABN immediately
  • you should print or save the confirmation of your ABN and ABN details
  • you can immediately apply for other business registrations, such as GST
  • your details will be added to the Australian Business Register (ABR). You can request that certain details not be disclosed should you have privacy concerns
  • it’s now your responsibility to keep your details up to date.

If you receive a reference number it may mean we need to check some details in your application or more information is needed. We aim to review your application within 20 business days and contact you if further information is needed.

You can check ABN LookupExternal link at any time to see if the ABN has been successfully processed. If the application is processed successfully after our review, a letter confirming your ABN and ABN details will be sent within 14 days.

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This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.

MNY Group 2020 July Newsletter

Access to the full version by clicling the link below:

MNY Monthly Newsletter – July 2020

In July we have included Topic including:

Tax return tips
Despite the current COVID-19 world in which we live, the procedures for completing and lodging tax returns remains pretty much the same.

Instant asset write off extended to 31 December
Note that the boost the instant asset write off rules that the government put in place tp help stimulate the Australian economy in the face of the COVID-19 crisis has been extended to the end of this calendar year. Businesses with a turnover of up to $500 million a year will be allowed to continue writing off newly purchased assets worth up to $150,000.

The realities of insuring against cyber crime
Think your business is too small or that your data and information isn’t important enough to be targeted by hackers? Think again.

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MNY Group 2020 June Newletter

MNY Group 2020 June Tax News
Access to the full version of Tax News by clicking the link below:
MNY-June-2020

In June we have included Topics including:

Last-minute tax planning tactics
This financial year is almost over,
but there are still effective strategies you may be able to employ to make sure you pay the right amount of tax for the 2019-20 year and maximise any refund entitlement. This is still, if not more so, the case in the current COVID-19 environment.

COVID-19 and residential rental property claims
Many residential rental property owners have had their rental income affected by COVID-19. As a result of this income year not being business as usual, the ATO has provided answers to some typical scenarios that may crop up in this area for tax time.

Concerns on property development and SMSFs
The ATO, as regulator of self- managed superannuation funds, has reported an increase in the number of SMSF trustees entering into arrangements involving buying and then developing property (either with related or unrelated parties) that is subsequently sold or leased.

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www.mnygroup.com.au

MNY Group 2020 May Newsletter


Access to the full version by clicking the link below:
MNY-MAY-2020

In May we have included Topics including:

Answers to COVID-19 work-from- home expense questions and CGT concerns
There are many questions being asked lately about claiming expenses when forced to work from home over the COVID-19 period, plus a lot of concern about any consequent capital gains issues when later selling a property from which people have been coerced to work from during this time.

Alternative turnover test for JobKeeper released
Alternative decline in turnover tests for the JobKeeper payment scheme has been registered by the ATO. The ATO says the alternative tests will only kick in if an entity cannot satisfy the basic decline in turnover test.

Here’s what attracts the ATO’s attention about luxury car tax
The ATO has announced that it has identified some common errors regarding luxury car tax (LCT) claims, but also says there are issues it has identified with LCT that are more associated with actively trying to pay less tax than required.

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

MNY Group 2020 April Newsletter


Access to the full version by clicking the link below:
MNY-April-2020

In April we have included Topics including:

Covid-19: Your stimulus and rescue package explained
A legislative package has been pushed through Parliament which contains a number of bills that implement the government’s economic response to the spread of the coronavirus.

e-bikes, FBT, and salary sacrificing
Entering into a remuneration package to secure a vehicle through a salary sacrifice arrangement is a popular option offered to employees. However the ATO has issued a ruling on another particular set of wheels that opens up both a tax and health incentive.

Individual or corporate trustee for your SMSF?
When establishing a self managed superannuation fund (SMSF), one central decision to be made early on
is if the trustee structure is to consist
of individual trustees or a corporate trustee. Between these choices, you can have up to four individual trustees, or one company that acts as trustee (with that incorporated body having up to
four directors).

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VIC Business Support Fund open for application

The Victoria Government has established an economic survival package to support Victorian businesses and workers through the devastating impacts of the COVID-19 pandemic.

The Fund is part of the package, totaling $500 million is available for business.

Fund Overview:
Funding of $10,000 per business is available and will be allocated through a grant process.

Eligibility:
Small businesses are eligible if they:

1. Hold an ABN at 16th March 2020 and Have been engaged in carrying out the operation of
the business in the Australian State of Victoria on 16 March 2020.

2. Employ staff

3. have been subject to closure or are highly impacted by Victoria’s Non-Essential Activity
Directions issued by the Deputy Chief Health Officer to-date (Non Essential Activity Directions)

4. have a turnover of more than $75,000; (Meaning that you must registered for GST)

5. have payroll of less than $650,000 (For business with payroll amount more than $650,000,
state government of Victoria is refunding payroll tax of 2018-2019 and waiving the payroll tax of
2019-2020).

What sectors are defined as Non-Essential Activity Directions for grants?

1. Pubs, bars, clubs, nightclubs and hotels

2. Recreational facilities

3. Entertainment facilities

4. Place of worship

5. Non-essential retail facilities including beauty and personal care facility, auction house(but can
operate remotely), market hall etc…

6. Food and drink facilities such as cafe, restaurant, fast-food store, cafeteria and canteen. Take away
food and delivery food is allowed, there are other permissions, please refer to the above link.

7. Accommodation Facilities such as camping ground and caravan park, other types of
accommodation is currently allowed with certain requirements.

8. Swimming pools

9. Animal facilities

10. Real estate auctions and inspections

Not listed Non-Essential Activity Directions?

You can still apply if you meet all the other eligibility criteria and consider that the shutdown
restrictions have highly impacted on your business. Your application will be assessed against the
guidelines.

How can the funding be used?
Meeting business costs, including utilities, salaries, rent
Seeking financial, legal or other advice to support business continuity planning;
Developing the business through marketing and communications activities;
Other supporting activities related to the operation of the business.

There are certain areas that the fund can not be used, the Applicants will be subject to audit by the
Victorian Government or its representatives and will be required to produce evidence, such as payroll
reports to demonstrate impact, at the request of the Victorian Government for a period of four years
after the grant has been approved.

Documents Required Lists:
A recent BAS
Recent Payroll report
Other supporting materials

All questions in the application must be completed and any requested documentation attached to
ensure timely assessment and grant payment

MNY Group 2020 March Newsletter


Access to the full version by clicking the link below:

MNY-March-2020

In March we have included Topics including:

ATO dusts off the “lifestyle asset” microscope
If you own a marine vessel, perhaps a thoroughbred horse or two, have a piece of fine art hanging on a
wall, high value motor vehicles
in the garage or an aircraft in the shed, it could be time to make sure your tax affairs are in order.

Limited options to access your super early
There are very limited circumstances when you can access your superannuation savings earlier than when you meet what the ATO calls a “condition of release” — which for most people generally means achieving a certain age and retiring.

Damage or destruction of a rental property
What happens if your property is damaged from the results of a natural disaster, or by tenants? Such a situation can affect the types of expenses you claim and the income you need to declare for your rental property.

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

MNY Group 2020 February Newsletter


Access to the full version by clicking the link below:

MNY-February-2020

In February we have included Topics including:

Tax issues when dealing with volunteers
From bushfire relief groups, sporting clubs, environmental groups, charity associations and many more, volunteers are an indispensible workforce and support network for many organisations. For most, if not all, having volunteers ready to lend a hand is pivotal in them being able to function or survive.

Succession planning for family businesses
Adopting a sound tax governance framework can help you manage tax issues around succession planning before they present a problem.

Superannuation tax offsets you may be able to use
Tax offsets (sometimes referred to as rebates) directly reduce the amount of tax payable on your taxable income. In general, offsets can reduce your tax payable to zero, but on their own they can’t get you a refund.

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MNY Group 2019 December Newsletter – E-invoicing is on its way

Access to the full version by clicking the link below:

MNY- December -2019

In December we have included Business & Accounting Topics including:

1.E-invoicing is on its way
Along with a more automated exchange and processing of invoices, e-invoicing also promises reduced payment times and better cash flow.

2.Personal services income explained
The personal services income (PSI) rules apply to income that is earned mainly from the personal efforts or skills of a person. It does not matter whether the income is earned by the individual in their own name or through an entity such as a business. The rules do not apply to income earned from being an employee.

3.CGT concessions: Does your business qualify?
Wondering if you are eligible to claim the small business CGT concessions can be setted by answering a few basic questions.

4.If you are in business, you need to know about the PPSR
There is a simple step that many businesses can take to better manage the risk that can attach to certain assets.

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MNY Group 2019 November Newsletter – Lost or destroyed tax records? Don’t panic.

Access to the full version by clicking the link below:

MNY-November-2019

In November we have included Business & Accounting Topics including:

1. Lost or destroyed tax records? Don’t panic.
Now and then, taxpayers may find themselves in a situation where they simply have no records to back up a tax claim. There can be many reasons for this, such as losing documents when moving home, or technology failures that end up with the same result.

2. An SMSF trustee duty not to be forgotten: The investment strategy
The majority of people who set up their own SMSF say that “control” is a big reason for benefits on running your own superannuation fund, but it is also a big responsibility to make sure your fund grows and provides for your retirement.

3. Small business: Low-cost assets & the threshold rule
There is a rule in tax law that allows a business that doesn’t use simplified depreciation to claim an immediate deduction for most business expenditures of $100 or less to buy tangible assets.

4. Three wise FBT tips for Christmas
Employers know that popping a champagne cork or three to celebrate the festive season lets staff know their efforts are appreciated, but the well-prepared business owner will also know that a little tax planning can help ensure that it’s not the business that ends up with the FBT hangover.

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MNY Group 2019 October Newsletter – CGT when spouses have different main residences

Access to the full version by clicking the link below:

MNY-October-2019

In October we have included Business & Accounting Topics including:

1.CGT when spouses have different main residences
It can sometimes be the case that spouses can have different main residences at the same time. When this occurs, special CGT rules apply to in effect provide only one CGT main residence exemption over this period. However, important decisions and choices may need to be made to optimize the tax outcome in this case (or avoid an adverse outcome).

2. The SMSF sector is growing by $23,200 every minute
The latest statistical report from APRA has been released, which of course mainly focuses on the APRA-regulated superannuation funds in the retail and industry sectors.

3.Fictions about work expense deductions
There can be varied sources for some of the myths about tax deductions -pib-talk, BBQ-banter, hairdresser-homilies, what-your-taxi-driver-just-heard and many others. We sort out fact from fiction.

4.An FBT reporting exclusion for personal security concerns
The ATO has plans in place that it can put into operation to relieve certain employers from reporting all the fringe benefits they provide to staff. The measure however is only triggered where it can be shown that employees’ personal safety is at risk or under threat.

5.SMSF event-based reporting: What needs to be reported, what doesn’t
Since event-based reporting started for SMSFs from 1 July 2018, the ATO says that for the larger part, SMSF trustees have mostly adjusted to the new requirements.

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

 

MNY Group 2019 September Newsletter – Property development & Tax

Access to the full version by clicking the link below:

MNY-September-2019

In September we have included Business & Accounting Topics including:

1. Property development & Tax

The ATO seems to be always looking over the shoulder of property developers to make sure they are complying with their tax obligations.

2. Tax & Children’s saving account

If a child is under the age of 18, and they earn income on their savings account, remember that the ATO considers that the person who “owns” the interest depends on why uses the funds of that account (no matter what type of account it is or the name of the account holders)

3.  CGT exemptions on inherited homes

Inherited a home or a legal interest in one could be the largest windfall gain that many Australians ever experience. From a tax law perspective, when someone dies a capital gain or loss does not apply when a property passes

4.  Operating expenses deduction for SMSF

Operating expenses that are incurred by an SMSF are mostly deductible, however, there can be exceptions to the extent that these relate to the gaining of non-assessable income (such as exempt current pension income) or are capital in nature.

5.  Rental property owners tips

The ATO is reminding rental property owners that each year it sees some fairly common mistakes being made with tax claims, and the outcomes that result, in regard to investment properties. It has therefore released a list of the top 10 stumbles, and how best to avoid them.

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

MNY Group 2019 August Newsletter – Tax when you’re headed overseas

Access to the full version by clicking the link below:

MNY-August-2019

In August we have included Business & Accounting Topics including:

1. Tax when you’re headed overseas

Most people’s “to do” list when they are planning a trip overseas will likely include items such as travel insurance, phone charges or taking photos of their passport – but probably the last thing on anyone’s minds will be their likely tax situation before, during or after that trip-of-a-lifetime.

2. Trust distribution resolution & Trust deeds

An essential starting point for consideration of trust income and how that income is to be distributed is to look at the trust deed. This very central document sets out the rules and central document sets out the rules and expectations for the governance and operation of the trust and the powers that can be exercised by the trustee.

3.  Hobby & Business

It is important to understand the differences between a hobby and a business for tax, insurance and legal purposes among other things. For one thing, there will be certain tax and other obligations that start once you are in business.

4.  The small business income tax offset

For small business owners who are disposing of assets that have risen in value during the time they have owned and used them in their business, accessing one or more of the available small business capital gains tax(CGT) concession can greatly reduce any consequence tax liability.

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MNY Group 2019 August Newsletter – Lodgment Rates and Thresholds

Access to the full version by clicking the link below:

MNY-August-2019 – Lodgment Rates and Thresholds 2019-20 

In August we have included Lodgment Rates & Thresholds guide 2019-20 including:

1. Tax Rates

2. Offset limits & Benchmarks

3. Rebate levels

4. Allowances

5. Essential super

6. FBT rates & thresholds

7. Including current gross-up factors

8. Student loan repayment rates

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MNY Group 2019 July Newsletter – Sale of small business

Access to the full version by clicking the link below:

MNY – Special Edition – 2019

In July we have included Business & Accounting Topics including:

1. Sale of small business

2. Manage capital gains tax

3. Maximise super contribution

4. Case Study

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MNY Group 2019 July Newsletter – Penalty interest deduction claim

Access to the full version by clicking the link below:

MNY-July-2019

In July we have included Business & Accounting Topics including:

1. Penalty interest deduction claim

2. Carrying forward concessional super contribution

3. Best business trading structure

4. Event-based reporting mistakes for SMSFs

5.  Same business test & similar business test

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MNY Group 2019 June Newsletter – Work-related expenses claiming

Access to the full version by clicking the link below:

MNY-June-2019

In May we have included Business & Accounting Topics including:

1. Work-related expenses claiming

2. Taxable payments annual report

3. Trust risk rules & tax avoidance

4. Car parking expenses deductions

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MNY Group 2019 May Newsletter – Alternatives to a tax invoice for certain GST credit claims

Access to the full version by clicking the link below:

MNY-May-2019

In May we have included Business & Accounting Topics including:

1. Alternatives to a tax invoice for certain GST credit claims

2. ATO’s system of tax rulings and determinations

3. Changes of director penalty regime

4. Super downsizer scheme essentials

5. ATO’s “living expenses” tool to help tackle the cash economy

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MNY Group 2019 April Newsletter – Federal Budget 2019 issue

Access to the full version by clicking the link below:

MNY-April-2019(Federal Budget 2019 issue

In March we have included Business & Accounting Topics including:

1.  Next month’s federal election

2.  2019-20 Forecast return surplus

3.  Proposed changes to Division 7A will be deferred

4.  Useful changes to superannuation

5.  Benefits to older pre-retires

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MNY Group 2019 April Newsletter – Home office expenses deductions

Access to the full version by clicking the link below:

MNY-April-2019

In March we have included Business & Accounting Topics including:

1.  Home office expenses deductions

2.  Single touch payroll for smaller employers

3.  Investment income tax deductions

4.  Deductions for donations

5.  Staff training costs deductions

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MNY Group 2019 March Newsletter – The same business test to be replaced by a “similar business” test

Access to the full version by clicking the link below:

MNY-March-2019

In March we have included Business & Accounting Topics including:

1.  The same business test to be replaced by a “similar business” test

2.  Removing tax deductibility of “non-compliant” payments

3.  New “consumer” rules for GST and online purchases

4.  Travel expenditure related to residential rental properties is not deductible

5.  Appropriate valuation of property and safety grey zone

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MNY Group 2019 February Newsletter – Tax incentive for angel investors in start-ups

Access to the full version by clicking the link below:

MNY-February-2019

In February we have included Business & Accounting Topics including:

1.  Tax incentive for angel investors in start-ups
2.  Guide to making motor vehicle expense claims
3.  Compliance issues for diverting personal services income to SMSFs
4.  Clarity of “Itinerant” when certain travel expense claims

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MNY Group 2018 December Newsletter Available – Subscribe Now!

MNY Group’s December Newsletter is Now Available!

Access to the full version by clicking the link below:

MNY-December-2018

featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In December we have included Business & Accounting Topics including:
1. Business partner agreements
2. Taxpayer alert
3. Investment tax issues
4. Tax of compensation paid from financial institution 

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MNY Group 2018 November Newsletter Available – Subscribe Now!

MNY Group’s November Newsletter is Now Available!

Access to the full version by clicking the link below:

MNY-November-2018

featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In November we have included Business & Accounting Topics including:
1. Three-quarter FBT year compliance check-up
2. How much do we need for retirement
3. FBT and Christmas party
4. Rent out part of your home
5.
Carrying on a business through your SMSF

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MNY Group 2018 October Newsletter Available – Subscribe Now!

MNY Group’s October Newsletter is Now Available!

Access to the full version by clicking the link below:

MNY-October-2018

featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In October we have included Business & Accounting Topics including:
1. Crowdfunding
2. Income Tax Return Amendment
3. Private Ruling
4. Personal Services Income

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

MNY Group 2018 September Newsletter Available – Subscribe Now!

MNY Group’s September Newsletter is Now Available!

featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In September we have included Business & Accounting Topics including:
1. Self-employed: claim a deduction & save for retirement
2. Share and Tax
3. GST apportioning option
4. New LRBA rules and SMSF

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

Changing a will after a death?

Changing a will after a death? A deed of family arrangement can make it possible!

There are times when the terms of a deceased’s will are not suitable and the beneficiaries involved seek to have the will varied. There are various situations where this may be the case, such as changing circumstances over a long period of time from when the will was first drafted, or an the estrangement between family members is healed (or vice versa).

This is where a deed of family arrangement can be utilized, however, it is an option that requires all interested parties to agree on the outcome.

This can, however, result in the settlement outside of litigation, which can otherwise tie up an estate for months or even years.

Deeds of family arrangement can be used in a number of circumstances, such as:

– where there are doubts about the meaning of a will
– where beneficiaries wish to rearrange the distribution of the estate between them
– to compromise a claim against the estate where there is a challenge to the will
– to create an estate proceeds trust under taxation legislation.

Where the will is varied through a deed of arrangement which meets certain requirements, generally the parties may disregard the resulting capital gains or losses. Care needs to be taken however as there can be some variation on the rules from state to state, such as stamp duty. Note also that a deed of family arrangement that would act to reduce the benefits accruing to a minor or a disabled person may require court approval.

Care needs to be taken with any deed of arrangement, and the advice of a professional is highly recommended.

Are Self-Education Expenses Claimable?

To be able to claim certain expenses relating to self-education is a tax concession that is not to be overlooked, but to be eligible your present employment and the course you undertake must have sufficient connection for the self-education expenses to qualify as a work-related tax deduction.

In other words, if the course of study is deemed to be too general in nature, and can be viewed as having little relevance to your income-earning activities, the connection between them (and eligibility for a tax deduction) may not be seen to be viable by the ATO.

Deductions are also not generally available if the subject of self-education is designed to obtain new employment, or to open up a new income-earning activity. By way of examples of relevant connections, the ATO gives the following scenarios:

the taxpayer is upgrading their qualifications for their current employment – for example, upgrading from a Bachelor qualification to a Masters

they are improving specific skills or knowledge used in their current employment – for example, a course that will allow them to operate more or different machinery at their current job

they are employed as a trainee and are undertaking a course that forms part of that traineeship – for example, an overseas trained person employed as an  intern while completing a local bridging course

they can show that at the time they were working and studying, their course led, or was likely to lead, to an increase in employment income – for example, a teacher who will automatically get a pay increase as a result of completing the course.

MNY Group 2018 August Newsletter Available – Subscribe Now!

MNY Group’s August Newsletter is Now Available!

featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In August we have included Business & Accounting Topics including:
1. Claim self-education expenses
2. How to deal with SMSF trustee dispute
3. Change a will by a deed of family arrangement
4. GST Credit

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

MNY Group 2018 July Newsletter Available – Subscribe Now!

MNY Group’s July Newsletter is Now Available!
featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In July we have included Business & Accounting Topics including:

1. The pension loans scheme
2. Tips for tax return
3. Division 7A Compliant

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

World Cup 2018 – Income averaging for Sportsperson

With the World Cup 2018 Russia now very much on the way, we want to share some tax tips about Income averaging for special professionals (SPIA), especially for Sportsperson.

According to the ATO,you are a special professional if you compete in sporting activities where you primarily use physical prowess, physical strength or physical stamina. A navigator in car rallying, a coxswain in rowing or a similar competitor is also a special professional. In order to apply for SPIA, you must earn a taxable income of more than $2,500 in the financial year from the above activities.

As a special professional who is also an Australian resident for tax purpose, you may eligible for the tax concession which allow you to apply lower tax rates to your sports derived income to lower your overall tax liability.

Apart from that, Sportsperson can claim work-related deductions. Tax rulings have determined that sportsperson may be eligible to claim home to work travel expense deduction, and also expenses related to following journeys, such as training, matches and competitions, appointments with medical professionals, airports for sports related travel, and public promotional appearances.

In addition, there are other expenses can be claimed as deductions, such as Player management fees; Travel, accommodation & insurance expenses for sporting related travel; Expenses whilst attending training camps; Purchase of supplements and sporting clothing; Depreciation & Maintenance on training equipment; Regular medical sporting related fees, etc.

SPIA is also available for Authors or inventors, performing artists, production associates and performers.

Don’t miss your Home to Work travel deduction

What is “itinerant work”?

As many people know, the cost of transport between home and the normal work place is generally not tax deductible. However, in the case of an employee’s work is itinerant, a deduction is allowable for the cost of travelling between home and work.

In general, travel MUST be a fundamental feature of an employee’s duties then the work can be classified as ITINERANT.

So when can you consider your home as a workplace?

You cannot consider your home as a workplace unless your work can be classified as itinerant, that is, the duty to incur the travel expenses arose from the nature of your work, and you are travelling to perform your duties from the moment of leaving your home. The following factors/characteristics may indicate itinerancy:

  • Travel is a fundamental feature of your work, NOT just for you or your employer’s convenience;
  • You have shifting workplaces, and continually travel from one workplace to another throughout the day;
  • You have a ‘network’ of work sites in your regular employment, that is, you must regularly work at more than one work place before travelling back to your usual place of residence;
  • Your home constitutes as your base of operations;
  • You do not have a regular pattern of work routine and often uncertain of the location in your employment;
  • An allowance in recognition of your need to travel continually between different workplaces is provided by the employer;
  • You have to carry bulky equipment from home to different workplaces

 

In practice, there will be cases where the eligibility of claiming a travelling deduction is less clear, while the nature of an employment is not inherently itinerant. It is important to classify your own circumstances to check if you are entitled to claim the travel expenses between your home and your regular workplace, or even your alternative workplace.

It’s now buyers’ obligation to pay GST to the ATO for their new residential properties

住宅需要缴纳GST

According to the current law, the property developer collects the GST (as part of the payment) from the property buyer and pays it to the ATO. This payment method is consistent with other industries.

However, The ATO is changing the way of collecting goods and services tax (GST) on some property transactions during the settlement process.

 

From 1 July 2018, buyers who purchase new residential premises or potential residential land need to withhold an amount from the purchase price and pay it directly to the ATO on or before settlement.

 

How the change may affect the buyers and property developers?

For property developers:

You need to let the buyer know when you sell residential premises or potential residential land if the buyer needs to withhold an amount. You can include this information in the sale contract or in a separate document.

Please note that, you don’t have to tell the buyer if you are selling:  commercial residential premises   or potential residential land where the buyer is a GST – registered business purchasing the property for a creditable purpose.

For buyers:

If you need to withhold an amount, you must also include the details listed below:

  • your name and Australian Business Number
  • the amount you need to withhold and pay to the ATO
  • when you need to make the payment
  • if the purchase includes a non-cash payment (such as land swaps), the GST-inclusive market value of that part of the payment
  • other information as stated in the regulations.

There are no changes to the GST rate or the way you normally lodge the BAS.

Small Business – benchmark reporting,STP & Modern Awards

 

MNY X Bank of Melbourne Business Elite Networking Mixer highlights

It was our pleasure to meet all the retails and F&B leaders at our business elite networking mixer event with Bank of Melbourne last night.

During the event, our director, Mr Ben Gu, has shared his fruitful insights with fellow elites on topics such as Industrial Benchmark, the upcoming Single Touch Payroll & Employee Modern Awards.

Thank you again for Bank of Melbourne & Element Zero Consultancy for making this event so successful.

We are looking forward to sharing more Accounting & Business Insights with all of your in our future events.

*Contact MNY Group for future event collaboration opportunities!

2018 Federal Budget – Health and Aged Care Budget

In 2018, 4 areas within the health & aged care category will be changed, including:

1. Medical services in rural and remote areas 
2. National immunization program
3. Access to aged care at home
4. New listings on the pharmaceutical benefits scheme (pbs)

More info as below.

1. Medical services in rural and remote areas

Financial assistance is proposed to be increased for the Royal Flying Doctor Service to improve the delivery and availability of dental, mental health and emergency aeromedical services in rural and remote areas. This is part of measures to achieve stronger rural, regional and remote health outcomes by aligning the distribution of the health workforce to areas of greatest need and building the capability of Australia’s medical practitioner workforce.

2. National immunization program

Certain vaccines are proposed to be listed on the National Immunisation Program from 1 July 2018. Vaccinations introduced on the list include those to prevent whooping cough in pregnant women, influenza in people aged over 65, and the prevention of meningococcal in children.

3. Access to aged care at home

The Government proposes to increase the number of high level home care packages by 14,000 over four years. It will be introduced over four years from 2018-19. The intention is to support the choice of older Australians who wish to stay at home and avoid going into residential care.

4. New listings on the pharmaceutical benefits scheme (pbs)

The Government has introduced new and amended listings on the PBS, including Spinraza for the treatment of spinal muscular atrophy. Changes will apply over various dates from 1 January to 1 July 2018. The medicines are intended to treat or prevent spinal muscular atrophy, breast cancer, refractory multiple myeloma, relapsing-remitting multiple sclerosis or HIV.

[2018 MNY x Silver Star Motors Business Elite Networking Mixer]

MNY x Silver Star Motors Mercedes-Benz Business Elite Networking Mixer Event was a blast last night.

During the event, our Director, Mr. Ben Gu, has shared with fellow business and community leaders on how companies can upgrade their core business activities with accounting outsourcing service and how to maximize your tax benefit through vehicle purchase before the end of financial year.

Thank you again for Silver Star Motors & Element Zero Consultancy for making this event so successful.

We are looking forward to sharing more Accounting & Business Insights with all of you in our future events.

*Inbox MNY Group for future event collaboration opportunities!

[29/5 MNY X Silver Star Motors Business Elite Networking Mixer]MNY X Silver Star Motors Mercedes-Benz Business Elite Networking Mixer Event was a blast last night.During the event, our Director, Mr. Ben Gu, has shared with fellow business and community leaders on how companies can upgrade their core business activities with accounting outsourcing service and how to maximize your tax benefit through vehicle purchase before the end of financial year. Thank you again for Silver Star Motors & Element Zero Consultancy for making this event so successful.We are looking forward to sharing more Accounting & Business Insights with all of your in our future events.*Inbox MNY Group for future event collaboration opportunities!

Posted by 卓誠立和会计师事务所 on Wednesday, 30 May 2018

How will the 2018 Federal Budget affect your Personal Income Tax?

The 2018 Federal Budget has been released, and how will your Personal Income Tax be affected?

The upper threshold for the 32.5% marginal tax rate bracket will increase from $87,000 to $90,000. It will apply from 2018-19.

Implemented to address the issue of bracket creep, it is anticipated that the adjustment to the marginal tax bracket will stop a further 200,000 Australians from entering the 37% marginal tax rate bracket.

Moreover, from 1 July 2022, there will be further adjustments to the brackets. The upper-income threshold for the 32.5% bracket will be increased from $90,000 to $120,000. In addition, the upper-income threshold for the 19% rate will increase from $37,000 to $41,000.

By 2024 the 37% bracket will be scrapped completely, leaving a 32.5% rate up to $200,000.

Better Targeting The R&D Tax Incentive

For companies with an aggregated annual turnover of $20 million or more, the Government will introduce an R&D a premium that ties the rates of the non-refundable R&D tax offset to the incremental intensity of R&D expenditure as a proportion of total expenditure for the year. 

The maximum amount of R&D expenditure eligible for concessional R&D tax offsets will be increased from $100 million to $150 million per annum.

For companies with an aggregated annual turnover below $20 million, the refundable R&D offset will be a premium of 13.5 percentage points above a claimant’s company tax rate. 

Cash refunds from the refundable R&D tax offset will be capped at $4 million per annum.

R&D tax offsets that cannot be refunded will be carried forward as non-refundable tax offsets to future income years.

The changes will apply for income years starting on or after 1 July 2018.

MNY Group 2018 May Newsletter Available – Subscribe Now!

[Don’t start your franchise before reading our May Newsletter]

MNY Group’s May Newsletter is Now Available!
featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future Networking Events, Seminars & Training Courses

In May we have included Business & Accounting Topics including:
1. Franchising and tax
2. Interest deductibility of income-producing activity ceases
3. Superannuation contributions “work test’ for over 65s
4. Testamentary trusts

*Please feel free to inbox us if you/ your companies would like to be included in our Monthly Newsletter Email List for free

What Is Happening When Your Online Shopping Order Is Above $1000 AUD?

Relevant facts to keep in mind include:

– For goods that are worth $1,000 or less, there are at the present time no duties, taxes or charges to pay (however see below*).

– For goods that are worth more than $1,000, you are generally required to fill out a special form called an Import Declaration, and pay duties, taxes and charges.

– You will need to pay duties and taxes on some goods (like tobacco or alcohol) regardless of their value.

Certain types of goods are not allowed to be brought into Australia, such as firearms, or else need special permits.

For more information:

In order for the commutation request to be valid under the ATO’s guidelines, it must not be subject to the discretion of the fund’s trustee or a member at a later date. Likewise, the commutation request must not be dependent on certain events occurring in the future.

Items that you buy over the internet from an overseas source are generally required to abide by the same rules and screening processes that apply to any other “import”. Also the usual duties or taxes should apply. Customs duties are regulated by the Department of Home Affairs (a recently formed body from December 2017, which now oversees the Australian Customs Service as well as Immigration and Border Protection).

The Department of Home Affairs may screen, x-ray or examine your goods just like any other imported items to make sure the goods are allowed into Australia. The Department of Agriculture may also need to clear and inspect items before they can be delivered to you.

*GST is to be extended to low value imports from 1 July 2018.

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How much tax should you pay for your Bitcoin?

For individuals, when buying items online for personal use or consumption, there is generally no income tax or GST implications.

Any capital gain or loss realised by disposing of bitcoin is generally disregarded (as a personal use asset), provided the value of the bitcoin is less than $10,000.

ATO advice is that certain records should be kept for any bitcoin transactions, including:

  • the date of the transactions
  • the amount in Australian dollars (which can be taken from a reputable online exchange)
  • what the transaction was for
  • who the other party was (even if it’s just their bitcoin address).

For more information:

Crypto-currency in Australia had until recently been subject to what was labelled “double taxation”. Legislation affective from July 1, 2017 aligned the goods and services tax (GST) treatment of digital currency with money. Before this, anyone using cryptocurrency as payment effectively paid GST twice — once when buying the bitcoin and again on its use in exchange for goods and services subject to GST.

The ATO deems bitcoin to be neither money nor foreign currency, but also holds that it can be regarded as an asset for capital gains tax (CGT) purposes.

As far as conducting transactions with bitcoin, the ATO states that it views such transactions as akin to barter arrangements.

In conducting a business transaction therefore, the same process would be followed as when, for example, receiving a non-cash consideration under a barter transaction, with the consideration recorded at fair market value. This can be obtained from a reputable bitcoin exchange.

MNY Group 2018 April Newsletter Available – Subscribe Now!

MNY Group’s April Newsletter is Now Available!
featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future #NetworkingEvents, Seminars & Training Courses

In April, we have included Business & Accounting Topics including:
– Bitcoin & SMSF investment
– SMSF commutation request
– Online purchase from overseas
– Renting via Airbnb

*Please feel free to inbox us if you/ your companies would like to be included into our Monthly Newsletter Email List for free

2017 Fed Budget says: No! to travel deductible

Legislation that came into law in the last half of 2017 makes certain measures first announced with the 2017 Federal Budget now a reality.

The “housing tax integrity” bill solidifies the government’s intention to deny all travel deductions relating to inspecting, maintaining, or collecting rent for a residential investment property. As well, second-hand plant and equipment that came with an investment property are now off the table as far as depreciation goes.

The measures will apply from July 1, 2017, so will affect returns for the current financial year. However the changes to depreciation are dependent on when assets were purchased (more below).

The change to travel claims means that travel expenditure incurred relevant to gaining or producing assessable income from housing premises used as residential accommodation will not be deductible.

The travel expenditure will also not be recognised in the cost base of the property for CGT purposes.

It should be noted that the amendments do not affect deductions for travel expenditure incurred in carrying on a business, including where a taxpayer carries on a business of providing property management services.

Depreciation change

The government has also limited plant and equipment depreciation deductions to outlays actually incurred by investors. In essence, unless you as the buyer have physically purchased the items, you can no longer depreciate them. In other words, if otherwise depreciable assets came with the investment property you purchase, there will no longer be an option to continue depreciating those assets in your hands.

Being new rules however, there are calendar dates that may determine if you are affected or not. The amendments will apply from 1 July 2017 for assets purchased after 7.30 pm 9 May 2017 (when they were announced in the Federal Budget 2017).

The changes apply to:

  • previously used plant and equipment acquired at or after 7.30 pm on 9 May 2017 unless it was acquired under a contract entered into before this time
  • plant and equipment acquired before 1 July 2017 but not used to earn income in either the current or previous year.

Investors who purchase new plant and equipment will continue to be able to claim a deduction over the effective life of the asset.

[Expanding the Empire] – While retaining the CGT main residence exemption

A question that surfaces now and then in regard to capital gains is whether the main residence exemption extends to additional land acquired after the time of acquisition of the residence.

The short answer is yes — provided that certain requirements are met. It should also be noted that where the exemption applies upon satisfaction of the following requirements, it applies to both pre- and post-CGT dwellings (before and after 20 September 1985).

The requirements are:
1. the additional land (including the area of land on which the dwelling is built) is adjacent to that on which the dwelling is situated;
2. the total area of land is not greater than two hectares;
3. the additional land is used primarily for private or domestic purposes in association with the dwelling; and
4. the CGT event that happens in relation to the additional land also happens in relation to the dwelling (that is, your ownership interest in it).

Single Touch Payroll (STP) – You must Read This if You Have More Than 20 Employees!

The ATO has announced about changes regarding the streamlined payroll reporting through SingleTouchPayroll. This change will start from 1 July 2018 for employers with 20 or more employees.

To find out if you need to be ready by then, you will need to do a headcount of the employees you have on your payroll on 1 April 2018. If you have 20 or more employees on 1 April, you will be a ‘substantial employer’ and will need to report through Single Touch Payroll from 1 July 2018.

Once you are a ‘substantialemployer’ you will be required to continue reporting through Single Touch Payroll even if your employee numbers drop below 20.

Also, you need to have an updated payroll solution to run your payroll and pay your employees. You are required to reporting payments such as their salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and super information to the ATO at the same time.

This change will become mandatory requirements from 1 July 2019 for all employers.

*Contact us now If you have any questions regarding Single Touch Payroll,
MNY Outsourcing is an alternative solution for you to release accounting hassles. Contact us if you would like to obtain additional information on how this may help you.

 

Single Touch Payroll你准备好了吗?

Q:什么是Single Touch Payroll?
A:这是税务局将实施的一个新的系统-, 简称为STP. 雇主需要及时并直接申报工资发放(Wages & Salaries)工资预扣(PAYG Withholding)和养老金(Superannuation)信息给税ATO

Q:ATO为什么会实施这样一个新的系统?
A:这是为了提高信息透明度和完善税务系统的新举措。税局、雇主、员工三方的工资和养老金信息将实现同步。ATO利用信息匹配的方式核查雇主是否履行Superannuation Guarantee和PAYG Withholding的义务与责任,从而对未履行的雇主进行审查。

Q:STP会带来哪些影响?
对于雇主:需更及时,准确的向税局申报工资,预扣税(PAYG)和养老金(Superannuation)信息
例子:雇主每周发放工资,则每年需申报52次; 每两周发工资,则每年申报26次; 每月发放工资,则每年需申报12次. 而现行的Annual PAYG report 和 Group Certificate则会取。雇主需使用标准商业(Standard Business Report) 软件,主动上报ATO。

对于员工:所有员工都要注册MyGov来及时的查询自己的工资信息,新员工可直接在 MyGov 直接填写 TFN Declaration 和Super 的信息,而无需再填写纸质的TFN Declaration Form

Q:哪些雇主必须用STP 进行申报?
A:雇佣20名或者20名以上员工的雇主,少于20名员工的雇主将暂时不会受到影响。

Q:从什么时候开始实行?
A:
•从2018年4月1日,雇主需确认他们的员工人数,有20名或者20名以上员工的雇主则需使用Single Touch Payroll 申报系统。
•从2018年7月1日,所有雇佣20名或者20名以上员工的雇主将统一使用Single Touch Payroll 申报系统。STP试行期为一年。
•从2019年7月1日,雇佣19名或少于19名员工的雇主也将需要使用Single Touch Payroll进行申报。

Key factors for rescuing a bad debt deduction

Doubtful debt – is a receivable amount that might eventuate to be a bad debt in future. Doubtful debt often represents a mere accounting provision and is not deductible for tax purposes for the current financial year but may evolve into a bad debt the following year.

Bad debt – is a receivable amount that has been identified as not collectible and on being written off may well be deductible for tax purposes.

In broad terms, for any other business to claim a bad debt deduction, the following conditions or requirements are posed:
1. The debt must be written off as bad during the year of income in which the deduction is claimed.
2. Except in the case of taxpayers in the business of lending money, the debt must have been brought to account by the taxpayer as assessable income.

In regard to the first requirement, it should be noted that there must be a physical writing off of the debt — not necessarily a book entry, but something in writing to indicate that the creditor has treated the debt as bad. It is not sufficient that the debt is written off when the accounts are completed after the close of the income year (in conformity with usual accounting practice) and merely relates back to the income year just closed.
Furthermore, the second requirement will not be satisfied by a taxpayer who lodges returns on a cash basis, because those debts will not have been brought to account as assessable income.

The key components of the ATO’s views on the treatment of bad debts are:
• a debt must exist before it can be written off
• the question of whether a debt is bad is a matter of judgement having taken into account all relevant facts
• debt is written off as a bad debt in the year of income and deduction is claimed, and it is recommended that some form of written record is kept to evidence the decision to write off the debt
• the debt must be written-off before the financial year ends
• the amount of debt must previously have been included as assessable income.

As a matter of course, the Tax Commissioner will generally require a taxpayer to have taken appropriate steps to attempt to recover a debt, including the obtaining and enforcement of a judgement against the debtor and valuation of any securities held against the debt.

It should also be noted that, specifically for companies wanting to claim bad debt deductions, there is an additional requirement to comply with the so-called continuity of ownership test or same business test, which is also a prerequisite for the carrying forward and utilisation of company tax losses.

All you need to know for Partnership Start-up

Partnerships can be less expensive to set up as a business structure than starting business as a sole trader, as there will likely be greater financial resources than if you operated on your own.

On the flip side however, you and your partners are responsible for any debts the partnership owes, even if you personally did not directly cause the debt.
Each partner’s private assets may still be fair game to settle serious partnership debt. This is known as “joint and several liability” – the partners are jointly liable for each other’s debts entered into in the name of the business, but if any partners default on their share, then each individual partner may be severally held liable for the whole debt as well.

Other general factors to note about partnerships include:

• the business itself doesn’t pay income tax. Instead, you and your partners will each need to pay tax on your own share of the partnership income (after deductions and allowable costs)
• the business still needs to lodge a tax return to show total income earned and deductions claimed by the business. This will show each partner’s share of net partnership income, on which each is personally liable for tax
• if the business makes a loss for the year, the partners can offset their share of the partnership loss against their other income
• a partnership does not account for capital gains and losses; if the partnership sells a CGT asset, then each partner calculates their own capital gain or loss on their share of that asset
• the partnership business is not liable to pay PAYG instalments, but each partner may be, depending on the levels of their personal income
• as a partner you will need to take care of your super arrangements, as you are not an employee of the business
• money drawn from the business by the partners are not “wages” for tax purposes

Subscribing to MNY Group 2018 Newsletter

MNY Group’s March Newsletter is Now Available!
featuring:
– Monthly Business & Accounting Tips
– Case Studies Sharing
– Event Invitations to our future #NetworkingEvents, Seminars & Training Courses

In March, we have included Business & Accounting Topics including:
– Third Party Fringe Benefits Tax
– Single Touch Payroll
– Simpler Trading Stock Rules
– Valuations & Your SMSF

*Please feel free to inbox us if you/ your companies would like to be included into our Monthly Newsletter Email List for free

[ATO Warning] Check if you have made a mistake on GST

As tax professionals we have been reminded by the ATO of a misconception that some taxpayers continue to make each income year regarding their eligibility to make claims for GST credits.

The reminder, issued in the middle of the third quarter of the 2017-18 income year, seeks to enlist the help of tax agents at more of a “frontline” point — before an audit or ATO review uncovers these type of client errors.

The type of taxpayer practitioners need to keep an eye on, says the ATO, are those who conduct irregular activity that brings in occasional income but no profit. These taxpayers may not be aware that they may be engaged in a hobby, rather than a business. As such, they are unable to claim GST credits on any purchases made in relation to that activity.

To claim GST credits, the ATO reminds practitioners that client must be able to demonstrate they are in business with an intention to make a profit. It says there are factors it will look out for to support this, including:

  • having a current business plan
  • repetition of the income producing activity
  • the size and scale of the activity being consistent with other businesses in that industry
  • commercial sales
  • marketing and advertising their activity to attract clients.

For clients who are actually performing a hobby, and not a business, the ATO advice is to seek a cancellation of GST registration. It may also be necessary to look at amending past activity statements if the client has claimed GST credits for purchases associated with their activity.

If you are confused about whether you are in business or not, we can definitely help!

Tax treatment of digital currencies – bitcoin

Transacting with bitcoin

Transacting with bitcoin is akin to a barter arrangement, with similar tax consequences. Our view is that bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for goods and services tax (GST) purposes. Bitcoin is, however, an asset for capital gains tax (CGT) purposes.

You need to keep the following records for bitcoin transactions:

  • the date of the transactions
  • the amount in Australian dollars (which can be taken from a reputable online exchange)
  • what the transaction was for
  • who the other party was (even if it’s just their bitcoin address)

Using bitcoin for personal transactions

Generally, there will be no income tax or GST implications if you are not in business or carrying on an enterprise and you simply pay for goods or services in bitcoin (for example, acquiring personal goods or services on the internet using bitcoin).

Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.

Using bitcoin for business transactions

If you receive bitcoin for goods or services you provide as part of your business, you will need to record the value in Australian dollars as part of your ordinary income. This is the same process as receiving non-cash consideration under a barter transaction. The value in Australian dollars will be the fair market value which can be obtained from a reputable bitcoin exchange, for example.

When receiving bitcoin in return for goods and services, a business may be charged GST on that bitcoin. If the supply of the goods and services was a taxable supply, the business will be able to claim input tax credits on the GST charged on the bitcoin they received as payment.

 

original link: https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia—specifically-bitcoin/

ATO shares it’s most frequent small business deduction queries

With the 2017 tax time continuing apace past its 12th week, the ATO has had an opportunity to identify some more-than-anecdotal trends that have emerged through its various channels of taxpayer engagement.

Questions from small business taxpayers make up a significant proportion of the enquiries the ATO fields in its day-to-day business, and it has shared the top three tax deduction questions that small business taxpayers keep coming back to.

Aside from specific deductions, the ATO also reminds small businesses that they can claim a deduction for most costs incurred in running the business, and this includes, for example, staff wages, marketing, and business finance costs. “Remember – you can’t claim private expenses,” the ATO says, “and make sure you keep records to support your claims.”

The top three deduction questions, and the ATO’s answers, are:

What business travel expenses can I claim?
If you or your employees travel for business, you can claim:

  • airfares, train, bus or taxi fares
  • accommodation costs and meal expenses for overnight business travel – fringe benefits tax may apply for some employee travel expenses.”

Can I deduct the cost of some assets straight away?
If you use the simplified depreciation rules, you claim a deduction:

  • immediately – for the business portion of depreciating assets costing less than $20,000 each
  • over time – for most other assets, combining costs into a small business pool and claiming a set percentage each year
  • immediately – if the balance of your pool is less than $20,000 at the end of the income year.”

What can I claim if I have a home-based business?
If you run your business at your home, or your business is based from home, you can claim the business portion of some expenses, including mortgage interest and electricity.

“If you sell your home, you may have to pay capital gains tax (CGT) on the business portion and declare it in your tax return.”

Tax practitioners with small business clients may want to refresh their knowledge covering these particular areas of taxation. The following links to the ATO website may help:

Original Link: https://taxandsupernewsroom.com.au/ato-shares-frequent-small-business-deduction-queries/

ATO says ordinary workers claiming expenses are the biggest problem

Dodgy work-expense claims and the cash economy are a far greater threats to Australia’s revenue base than profit shifting by multinationals, Tax Commissioner Chris Jordan says, ordinary workers claiming expenses are the biggest problem.

In a departure from the pervading political and societal narrative, Mr Jordan said ordinary wage and salary earners over-claiming for work-related expenses were responsible for the most significant revenue leakage.

ATO says ordinary workers claiming expenses are the biggest problem
Tax Commissioner Chris Jordan. Photo: The Tax Institute/Facebook

He said the next biggest problem came in the form of a willingness on the part of ordinary Australians to ignore the tax evasion implicit in paying cash for a kitchen renovation or cheap meal.

“Everyone is focusing on the large multinationals and the large corporates,” Mr Jordan told a Tax Institute conference in Adelaide on Thursday.

“Well I can tell you the total corporate tax base is something like $67 billion and the gap at that level is relatively modest because of the concentration of the companies in Australia and our assurance over that.”

What he means is that the ATO knows precisely who these taxpayers are and keeps a very close eye on them. But it was a different story with the 20 million or so individual taxpayers, he said.

“The big dollars are with us claiming work-related expenses,” Mr Jordan said.

“The biggest gap we’ve got in the system is us, not them.”

The tax system allows work and investment-related expenses to be deducted against salary income.

Personal income tax deductions totalled $31.4 billion in 2012-13. Of that, $19.7 billion was for work-related deductions and the remainder for investment-related category, mostly for negatively geared rental properties.

The ATO is working on a “tax gap analysis” for large corporates, which could be as low as $2 billion a year. It was due last year but has been delayed.

“Getting every single dollar out of multinationals and large corporates is not going to make a dent,” Mr Jordan said.

“The biggest of all is individuals, wage and salary earners, claiming work-related expenses. So that’s what’s we’ve actually got to focus on to make a real dent across this area.”

Mr Jordan was quick to add that the ATO should – and did – go after multinationals, private companies and wealthy individuals for unpaid tax. And people needed to know the ATO had those groups under control so they could have confidence in the system, he said. But they were not the full story.

In late 2015, Treasurer Scott Morrison gave the go-ahead for the House Economics Committee, which was then chaired by Liberal MP and successful businessman Craig Laundy, to examine deductions by individuals and companies. No report was produced.

In a submission to the inquiry, the Parliamentary Budget Office said the average work expense claim was $3000, and work-related expenses made up two-thirds of total deductions claimed in 2013, or $19.7 billion.

The most common claims were for car, home office and travel expenses. Taxpayers in the highest tax bracket claimed 12 per cent of the total value of deductions, and men claimed more than women at all levels of income.

The federal government is already planning a major crackdown on the cash economy.

As part of that, a working group headed by Board of Tax chairman Michael Andrew is examining options for change and will provide a report to governing within weeks.

Mr Jordan said it would be good if Australia could get to the same point as Scandinavian countries, were using cash to avoid paying tax was frowned upon.

“Ha ha I got $200 off a plumber, I’m great [is the attitude here],” he said.

“It’s not actually, if you multiply that out.

“Never can we audit our way out but it’s a very long program of education and changing social attitudes so it’s no longer okay to cheat a bit.”

The ATO has forecast tax assessments totaling $2 billion will be issued to seven global businesses in June, arising out of audits of multinationals.

While the tech companies have never been identified, they are believed to include Apple and Google.

This article first appeared on AFR.com.

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