Blog

Better access for small businesses to resolve tax disputes. The government announced that it will make tax dispute resolution between small businesses and the ATO cheaper, easier and quicker. The government is establishing a Small Business Concierge Service within the Australian Small Business and Family Enterprise Ombudsman’s office to provide support and advice about the Administrative Appeals Tribunal (AAT) process before an application is made. The Government will also create…  Read more

Inspector-General of Taxation’s annual report The Inspector-General of Taxation has tabled his annual report for 2017/18. As an outgoing IGT, Mr Ali Noroozi reflected on the evolution of the IGT and highlighted some of its achievements over the last 10 years of his tenure. Mr Noroozi noted that over the past 10 years, the IGT has become a mainstay in the tax landscape, both domestically and internationally, and has played a…  Read more

Toxic leaders poison entire companies, and once they get authority over others, they don’t let it go willingly. Thankfully, any business can destroy their poisonous influence. Tell The Truth Toxicity thrives when no one tells the truth, but the reverse is also true. If your employees are honest about each other, they can uncover toxic conduct and destroy it. Employees know how obnoxious leaders can be, but reporting their actions…  Read more

Businesses want to grow and help a larger audience, but too many make mistakes that cripple their growth. Even worse, they keep repeating them! Don’t do the same; avoid the blunders outlined below. Hiring Toxic Personalities Businesses hire more staff as they grow. But if they expand too quickly, they will feel pressure to fill positions on their team, even if the job candidates have a few personality flaws. While…  Read more

Lower tax rates brought forward for SMEs The government will bring forward the progressive reduction in the company tax rate for businesses with an aggregated turnover below $50m. Under current legislation, a tax rate of 25% will apply to such taxpayers (also known as base rate entities) from 2026/27. Legislation will be introduced to bring forward the 25% rate to 2021/22. The government has indicated that a similar change in…  Read more

ATO finalises its diverted profits tax guidance Contributed by Michael Bona, Peter Collins, Jonathan Malone, Greg Weickhardt, Chris Morris, Paul McNab, James Nickless and Angela Danieletto, PwC Australia In brief The ATO released its finalised guidance on the diverted profits tax (DPT), Practical Compliance GuidelinePCG 2018/5 and Law Companion Ruling LCR 2018/6, on 26 September 2018. The PCG was previously released as Draft PCG 2018/D2 and the LCR as Draft LCR 2017/D7. In finalising…  Read more

Extension of $20,000 instant asset write-off now law An immediate deduction for depreciating assets costing less than $20,000 is now available for small business entities until 30 June 2019. The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 has received assent as Act No 109 of 2018 on 21 September 2018. The Act extends the current availability of the immediate deduction for depreciating assets as well as for amounts…  Read more

GST ruling on supplies connected with Australia The ATO has issued a new GST Ruling GSTR 2018/2 which sets out the Commissioner’s views on when supplies of goods are connected with Australia under key provisions in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The concept discussed in the ruling is important because one of the preconditions for liability for GST is that a supply must be connected with the…  Read more

Super sector must address trust deficit In a speech to the Financial Services Council Summit on 26 July 2018, Australian Securities and Investments Commission (ASIC) Chair James Shipton said the superannuation sector must restore the “trust deficit” and be more mindful of the responsibilities that come with being the custodians of other people’s money. Mr Shipton said the super industry has been exploiting opportunities to make money from members, citing…  Read more

Government launches new service to simplify business registrations The government has officially launched a new stand-alone Business Registration Service, providing a simpler and clearer way to register a business. The service is available at www.business.gov.au. The service can be used for things such as applying for an Australian Business Number (ABN) or goods and services tax (GST) registration. It is for people starting a new business as a sole trader,…  Read more

Spotlight at Royal Commission Bank lending practices for small and medium enterprises (SMEs) were in the spotlight when the Financial Services Royal Commission (FSRC) held its third round of public hearings in late May. These hearings focused on the conduct of financial services entities providing credit to SMEs. SMEs are an important sector of the economy – over two million SMEs account for more than 65% of private sector employment.…  Read more

Tax planning With the end of the 2018 income tax year rapidly approaching, this issue draws attention to year-end tax planning strategies and compliance matters that you need to consider to ensure good tax health. It focuses on the most important issues for small to medium businesses and individuals to consider. Tip: This is general information, but we’ll take your particular circumstances into account to help you achieve good tax…  Read more

ATO closely examines work-related car expenses The ATO is concerned about taxpayers making mistakes or deliberately lodging false claims for work-related car expenses, and has announced it will be closely examining claims for these expenses in 2018 tax returns. Last year, around 3.75 million people made a work-related car expense claim, totalling about $8.8 billion. The best way for to avoid mistakes is to make sure you follow “the three…  Read more

ATO embarking on e-Audits The ATO has recently published information about the “e-Audit” technology it uses as part of its tax compliance activities. These audits involve the ATO performing computer tests on a taxpayer’s own electronic records to verify that the data is accurate and complete and that the taxpayer has complied with relevant tax laws. If a taxpayer is selected by the ATO for an audit or review, the…  Read more

Bill to implement housing affordability CGT changes As part of the 2017–2018 Budget, the Federal Government announced a range of reforms intended to reduce pressure on housing affordability. Legislation has now been introduced into Parliament that proposes to: remove the entitlement to the capital gains tax (CGT) main residence exemption for foreign residents; and modify the foreign resident CGT regime to clarify that, for the purpose of determining whether an…  Read more

ATO guidelines: profit allocation within professional firms The ATO has become aware that its guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements, including the use of related-party financing and self managed superannuation funds (SMSFs). The guidelines have been suspended from 14 December 2017 to allow the ATO to consult with stakeholders on replacement guidelines. Anyone considering new arrangements beginning…  Read more

Compensation for ATO systems outages After the ATO’s unplanned systems outages, it provided lodgment deferrals, and remitted interest and penalties where the outages affected practitioners and their clients’ lodgments. The ATO has also advised that it assesses claims for compensation in two ways: compensation for legal liability (eg negligence); and compensation under the Compensation for Detriment caused by Defective Administration (CDDA) scheme, which allows the ATO to consider claims and…  Read more

Bill to increase Medicare levy The Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 has been introduced to implement the Government’s 2017–2018 Budget announcement to increase the Medicare levy by 0.5% to 2.5% from 1 July 2019 in order to help finance the National Disability Insurance Scheme (NDIS). Nine other Bills have been introduced to increase the following rates that are linked to the top personal tax rate. TIP: Think…  Read more

Work-related expense claims under scrutiny Will you claim work-related expenses on your tax return this year? The ATO now uses real-time data to compare people’s tax returns with others in similar occupations and income brackets. This year it’s focused on identifying higher-than-expected claims for expenses related to work vehicles, travel, internet and mobile phones, and self-education, and may even check people’s work deduction claims with their employers. TIP: Ever heard…  Read more

Tax cut for small business: ATO will amend returns For the 2016–2017 income year, the company tax rate for small businesses decreases to 27.5%. Companies with turnover of less than $10 million are eligible for this rate. The maximum franking credit that can be allocated to a frankable distribution has also been reduced to 27.5% for these companies. The reduced company tax rate of 27.5% will progressively apply to companies…  Read more