resources

Our Blog

ATO myDeductions tool

Are you looking for a quick and easy way to manage your records this financial year?

The ATO have released a new myDeductions tool available as part of the ATO app. The tool allows you to use your smart device to record and capture a range of work-related and general expenses, photos of invoices and receipts and the ability to document vehicle trips. If you are a sole trader, you can also use the tool to record business income and expenses.

The myDeductions tool will enable you to practice good record keeping by tracking your income and expenses accurately in real time. By keeping your records digitally you won't miss out on the deductions you are entitled to due to the common "lost receipts" ever again.

 At tax time next year, all you need to do is either:

- email us your records directly from the tool

- upload your records to the ATO, which will be available to you through the practitioner lodgement service.

All data uploaded to the myDeductions tool is privately stored on your device or personal cloud service.

Visit the Apple Store or Google Play Store to download the ATO app and start using the myDeductions record keeping tool today.

Ready For Tax Time

We know it's a busy time of year for everyone, but you need to start getting ready for tax time – yes, it's almost upon us again.

We want to make it as easy as possible:

At the beginning of July 2018, we will be sending out our normal tax information gathering checklists to make it easier, but we thought that it would be good to highlight some key things that you need to do to prepare:

1.    Start gathering and sorting your records now, (it will save you time in the long run). This may include bank statements, PAYG Withholding Summaries, Interest or Dividends received,

2.    Other income such as business income or the sale of investments, such as property or shares,

3.    Expenses you can claim as a business deduction or against your employment income. This may include motor vehicle expenses, union fees, gifts and donations or any other expenses directly related to you earning income.

Make sure you can show how you apportioned your expenses between business and private use also.

If you changed your record keeping software during the year, check that all your information has transferred over correctly.

The tax deductions on this year's ATO hit list

Every year the ATO makes it known what sort of deductions will be getting the eagle eye – so far, here's what we know about this upcoming financial year:

The ATO publicly flags a couple of areas it's looking at because (surprise, surprise) it's not really trying to scrounge every dollar it can from you.

It just wants to stop people from over claiming (accidentally or otherwise), and the main drivers are:

It costs the taxpayer money if people successfully claim deductions they're not entitled to.

Chasing up fraudulent claims is a time-consuming hassle, despite the ATO's fancy tech toys on hand.

So, if the ATO stops people making fraudulent claims in the first place by giving them a heads-up, then it's happy days all-round.

Here's what it's flagged for this year:

'Gig economy' incomes

The ATO will be looking closely at the incomes of so-called "gig economy" workers or those earning money from gig economy activities such as renting out a room on Airbnb.

"Individuals who choose to rent their vehicle or rooms in their homes through the sharing economy are entitled to certain deductions".

However, these expenses must relate directly to the earning of income and accurate records or receipts may be required to back up a claim. No matter how little you earn through car or room sharing, it's important to include it in your tax return.

Work-related expenses

The ATO is also on the lookout for claims made for work expenses. There's a trend to not give much proof that the claim is for a work-related activity.

Data suggests that 6.7 million Australians claimed a record $7.9 billion in work-related deductions last financial year, so it's checking if people were claiming these correctly.

In the firing line are claiming deductions for entire phone call costs, when some of these phone calls were personal, and home-office expenses.

The ATO has also said it's also keeping a special eye out for work-related clothing expenses.

"Many taxpayers do wear uniforms, protective or occupation-specific clothing and have legitimate claims. However, far too many are making mistakes such as claiming for plain clothing they bought to wear to work, like a suit or black pants".

The ATO advises that you can't claim a deduction for what's called 'conventional clothing' even if your boss tells you to wear it. The ATO said occupation-specific clothing can be chequered chef pants, while protective clothing like hi-vis safety vests and steel-capped boots can be claimed as deductions.

"There's no such thing as a standard deduction for clothing and laundry, and there's no safe level to claim a deduction where you haven't spent the money or where an expense isn't directly related to earning your income."

Car expenses

The ATO advised there were $8.8 billion in car-related claims during the last financial year – coming from 3.75 million people.

That's a whopping $2,347 per person.

The ATO's concerned that people are claiming private trips, trips they didn't make, or trips or car expenses that have already been paid by their employers.

What made the ATO raise an eyebrow for car-expenses claims is that 870,000 people claimed the absolute maximum amount they could for work-related travel under 5000kms.

"It's legitimate to claim for 5000 kilometres if you did actually do them as part of earning your income".

"The ATO is concerned that some taxpayers mistakenly believe that this is a 'standard' deduction they're entitled to, without needing to provide any evidence of having travelled that distance or even having undertaken any travel at all."

While you don't need to provide a log book for claims under 5000km, you need to provide some record of travelling to the places you said you did.

What's more, the ATO's data analytics unit's getting better all the time – it'll be able to match up your claim with others in your industry earning similar incomes.

Be careful, the ATO are certainly watching.

Trading names are being retired

(Source – www.ato.gov.au – 22 May 2018)

The Australian Business Register (ABR) is working with Australian Securities & Investments Commission (ASIC) in preparation for the retirement of trading names.

To continue trading under a specific name, you need to register it as a business name. After a business name is successfully registered it will appear on ASIC's business names register and the ABN Lookup.

From November, all trading names will be removed from ABN Lookup. Only registered business names will continue to be listed, so check you have registered your trading name as a business name with ASIC by then.

Changes to GST on property transactions

(Source – www.ato.gov.au – 4 May 2018)

From 1 July 2018, if you are purchasing new residential premises or potential residential land subdivisions you will have to pay the GST directly to the ATO as part of the settlement.

These changes will apply to contracts entered into on or after 1 July 2018.

The amount of GST hasn't changed, just who is required to pay the GST to the ATO has. You now pay the GST directly to the ATO instead of paying it to the developer as part of the purchase price. You won't have to register for GST to make this payment.

Property developers will need to give written notification to you when you need to withhold an amount for GST. There are no changes to the sales of existing residential properties or the sales of new or existing commercial properties.

Be sure to check this legally before a prospective purchase ends up costing you more by not complying with the new GST requirements.

Due to a significant number of developers failing to remit the GST collected on the sale of properties in the past, the Australian government has introduced some significant changes that now require the purchaser of a "new residential property" to withhold GST from the purchase price or a property and remit this amount to the Australian Taxation Office. 

This change comes into effect from the 1st July 2018 and will impact all contracts for the sale of new residential premises by a developer entered into after this date.

To help you understand the changes and how it may impact on your business, we have provided you with the following summary of how the legislation will work:

  • From 1 July 2018, a purchaser will be required to withhold and pay an amount to the ATO when purchasing "new residential property". 
    Please note that where a contract of sale is entered into before 1st July 2018 and any payment under the contract (excluding the deposit) is provided before 1st July 2020, there will be no requirement for a purchaser to withhold the GST.
  • The amount of GST to be withheld is 1/11th of the purchase price. However, if the developer uses the margin scheme, then the amount that needs to be withheld is 7% of the purchase price. Please note that settlement adjustments are ignored for determining the amount of GST withholding.
  • Prior to settlement, the developer must provide a statement to the purchaser setting out the amount to be withheld and paid to the ATO (failing to provide this statement carries penalties up to $21,000).
  • The vendor (developer) will be entitled to GST input tax credits for the withheld amount on the next activity statement so long as payment has been made to the ATO by the purchaser. This means that if the purchaser withholds an amount from the developer, but does not pay it to the Commissioner, the developer will not be entitled to input tax credits.

These changes present developers with a range of issues including significantly impacting the cash flow of a Developer. It is therefore important to be prepared and understand how these changes will impact your business.

Please contact our office if you require any further information relating to this.

Single Touch Payroll

Single Touch Payroll

You may have heard of the term Single Touch Payroll Reporting ('STPR') being bandied around lately. The belief is that STPR will streamline the way employers report some tax and superannuation information to the ATO.

From 1 July 2018, it will be compulsory for employers with 20 or more employees to use STPR. This will then become compulsory for all employers from 1 July 2019 regardless of the amount of employees.

What does this mean in terms of changes to your business?

  • The Ordinary Time Earnings, salary or wages and Pay-As-You-Go withholding information will be reported and available to the Commissioner in 'real time' when payroll is processed by the employer
  • Superannuation will be reported to the Commissioner at the time the contributions are paid. 
  • Employers will have to acquire SBR-enabled software to comply with their PAYG withholding obligations
  • New employees can complete TFN declarations and Super Choice forms online
  • The STPR reports for PAYG withholding will become the accepted form for reporting PAYG withholding instead of the Business Activity Statements (BAS). A failure to lodge in the approved form may attract penalties
  • Employers that have reported their PAYG withholding obligations via STPR, will have these amounts prefilled by the ATO on their BAS
  • Employers will no longer be required to submit an annual PAYG report to the ATO
  • Employers may no longer need to provide payment summaries to employees, as the employees will have access to their payroll information via their myGov account.

What doesn't change?

  • If the employer does not elect to pay at the same time they report under the STPR there is no change to the due date for payment of the PAYG Withholding liability
  • STPR does not change the payment due date for superannuation guarantee, which is generally on the 28th day following a quarter

I strongly recommend that your business's SGC and PAYG payroll processes are reviewed to make sure that the treatment of these payments and remuneration is correct. This should be performed before the mandatory implementation of STRP.

For more information, please contact the friendly team at VI Partners who will be happy to assist you.

Source – www.ato.gov.au

According to the ATO, of all the things that can cause small businesses to fold, "high on that list is poor record keeping".

More than half of the businesses they visited in their Protecting honest business campaign needed to improve their record keeping.

Issues they found include businesses:

  • estimating their sales and income;
  • using the 'no sale' and 'void' button on cash registers when taking cash payments;
  • not keeping cash register tapes and not reconciling at the end of the day; and
  • paying their employees cash-in-hand.

They are writing to these businesses to recommend they attend one of the ATO's record keeping workshops, which cover why good record keeping is important and how it will save them time.

If you are not sure about whether your record keeping stacks up, feel free to contact us to enquire further. There are also many apps that can be utilized in today's world that can help with record keeping.

Welcome to the world of Digital Disturbance

Here we are in 2018, were digital disturbance is more prevalent than ever. Every single day we are forced into changing the way we work and live, and if you blink, you risk being left behind.

Gone are the days of renting a DVD at your local store, visiting the bank is a thing of the past, our electronic devices rule our lives and if you don't know something, no longer do you reach for a book from the library – just google it!

Digital disturbance has the power to close down businesses, eliminate jobs within the workforce and have a major influence on the Australian economy. In saying that, there are two sides to every story. And a shift in mindset gives us a whole new take on the impact Digital Disturbance can have.

Digital disturbance has the power to cut down costs within your business, streamline processes, improve efficiencies and ultimately your business thrives in the digital age.

It is time to let go of the fear surrounding the digital world and embrace the change. Digital disturbance has provided us with a business opportunity and it is up to you whether you innovate or disintegrate.

The first question that you need to ask yourself is: how is digital disturbance affecting my business? And how well are we responding to decrease the threats and increase the opportunities presented by this change?

Understanding your industry and competitors will provide you a key insight into how you can turn digital disturbance into an advantage for your business. You have the opportunity to learn from companies who have failed to get ahead of this change and ultimately turned a blind eye on the digital world we have no choice but to embrace. In 2010 the Taxi Industry ignored the need to identity what changes their digitally exposed consumers needed to see – along came Uber and as a result, we now see a broken taxi industry.

The key to leveraging the advantages of digital disruption lie within your ability to innovate your business. Re-design your website, develop an app, setup an online store, research and embrace technology, move to the cloud. All it takes is making a commitment to adapting to the change rather than resisting the inevitable.

Of course some industries face larger disturbance than others. Retail trades and media are industries that we would expect to face both impending and significant disturbance as a result of the digital world. Online shopping and online media streaming services are already predominantly used every day by consumers. The more accessible and affordable these services become the higher the risk of digital disruption.

It's crucial to recognise that when it comes to digital disturbance, the biggest risk may in fact be by doing nothing at all.

Innovation, imagination and action will separate tomorrow's winners from the losers.

how we can help

We work closely with our clients and provide them the peace of mind that their financial affairs are being cared for. Our purpose is to "make a positive difference to our clients".

taxation

taxation

business planning

business planning

smsf

smsf

wealth planning

wealth planning