The ATO will be making visits over the next few months to cafés and restaurants in Box Hill, Melbourne. The aim is to meet with owners and ensure they understand their tax obligations. It has been noted by the ATO, ““Where taxpayers are unwilling to work with us or continue to cause us concern, we will undertake further investigation.”
From July 1st 2015, small businesses and entities that intend to carry on business may immediately claim certain start up costs.
These costs include:
These expenses can now be fully deducted in the year in which the expenditure was incurred. Before July 1st, these expenses had to be deducted over a five year period.
The Superannuation Complaint’s Tribunal has recently released some guidance in relation to the payment of death benefits from superannuation funds due to an increased number of confusion and complaints.
“There are some common misconceptions about superannuation death benefits that can result in unexpected outcomes for the beneficiaries of a death benefit, and may result in a complaint being made to the Tribunal.
The most common misconception, arguably, relates to the purpose of superannuation.
Broadly speaking, the purpose of superannuation is to provide income in retirement to members and their dependants; it does not form part of a person’s estate.
Accordingly, a superannuation death benefit should be paid to dependants and those who had a legal or moral right to look to the deceased member for financial support had they not died.
The ability of a superannuation fund to pay a death benefit directly to a dependant rather than to the estate has a number of advantages.
Firstly, it ensures that the benefit is paid directly for the benefit of the dependants and is not available to creditors who would be paid first from the assets of the estate.
Secondly, it can usually reach the beneficiaries quicker than if a grant of probate or letters of administration has to be obtained and the estate called in and distributed.
Thirdly, as a general rule, superannuation death benefits are protected from bankruptcy.
Therefore, even if the deceased member was bankrupt, or if the estate is insolvent, funds can be paid direct to the dependants to replace the income stream that may be lost as a consequence of the death.
However, if you would like to ensure that your superannuation is distributed a certain way then it is important to find out if your superannuation fund has the option for a binding nomination and if so, ensure you meet the requirements, including renewing your binding nomination every three years.”
From the 1st July 2015, the ATO implemented a new two-tier tax system for companies. The tax rates are as follows:
As a small company, no action is required at this point. The new rate will automatically be applied to PAYG instalments.
The option to report GST annually, and pay instalments quarterly is now available to all businesses that have a turnover that is less than $2 million.
The GST instalment is worked out by the ATO (which can be varied by the taxpayer) and then the entity reports its actual GST information annually on an Annual GST return.
If you would like to discuss this option, please call our office.
It has recently been announced to reduce the GST threshold on imported goods and services to zero effective 1 July 2017. It is currently at $1,000.
A proposal that is dependent on a vendor registration model to collect GST has been put forth.
Overseas suppliers will charge, collect and remit GST on digital and physical products, and as in the case in Australia, they will only need to do so if turnover is at least $75,000.
The ATO has sent out a firmly reminder that individuals with rental properties must ensure they are only claiming deductions that they are entitled to.
That is, claiming deductions for periods in which the holiday home is rented out and/or is available for rent.
Clients are advised to keep accurate records to ensure they are declaring the correct income and expenses, and have evidence for these claims.
Each year, the ATO identifies industries where employers are at a greater risk of not making super contributions for their eligible employees.
This year its focus is on:
Furthermore, the ATO stated that, in early 2015, it will write directly to employers in these industries to remind them of their super obligations.
It has also advised that it will be undertaking super obligation audits of these industries from July 2015.
The ATO reminds all taxpayers that they must:
Businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. You need to report these payments to the ATO on the Taxable payments annual report by 28 August each year
What are ‘building and construction services’?
It includes services such as bricklaying, plumbing, etc. However, it also includes some activities that businesses may not be aware of, such as:
The Government has announced that it will simplify tax and superannuation reporting obligations through ‘Single Touch Payroll’. Under Single Touch Payroll, employers’ accounting software will automatically report payroll information to the ATO when employees are paid.
This will eliminate the need for employers to report employee-related Pay As You Go Withholding (PAYGW) in their activity statements throughout the year, and employee payment summaries at the end of the year. The Government stated that Single Touch Payroll will be available from July 2016, and transition arrangements will be the subject of consultation with the business community early in 2015.
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