Business Tax

  • 122BusinessTaxEffectOfInsolvencyOnContractsThere was a time when, if a company got into financial difficulty the contracting party could terminate the contract, even if the company had been meeting all its obligations.

  • 099FederalBudget2018SpecialEditionOn Tuesday, 8 May 2018, Treasurer Scott Morrison handed down the 2018–2019 Federal Budget, his third. In what is widely perceived to be an election Budget (and certainly the last full Budget before the next Federal election), the Treasurer forecast a return to a modest deficit of $2.2 billion in 2019–2020 and an increase to surplus in 2020–2021. In the lead-up, the Treasurer signalled the need to “exercise the restraint that has been so important in ensuring that we bring that Budget back to balance”.

  • BUDGET 2019

    PERSONAL TAXATION

    Personal tax cuts: low–mid tax offset increase now; more rate changes from 2022

    In the 2019–2020 Federal Budget, the Coalition Government announced its intention to provide further reductions in tax through the non-refundable low and middle income tax offset (LMITO).

  • ATO ABN PurgeHave you run a small business that has ceased or paused operations? Or perhaps you’ve been hired as an ABN contractor? The ATO is cleaning up the Australian Business Register

  • 127AlternativeDisputeResolutionAlternative dispute resolution (ADR) is not only used to resolve substantive disputes, and can be used to clarify or limit issues, and remove barriers created by relationship issues between you and the ATO.

  • Are you declaring personal use of business trading stock?For business owners in industries such as hospitality and food retail, using small amounts of the business’ trading stock for personal use is a reality of day-to-day operations.

  • Gig Platform ClaimsHave you ever considered joining a site like Airtasker to make some extra cash? If so, you’ll need to keep the ATO happy. Here, we explain the tax issues that arise when you earn money performing “gigs” through Airtasker, or any other online platform that connects workers with third-party hirers looking for help with one-off tasks.

    It’s important to understand that these platforms are used by everyone from “moonlighters” making some extra dollars on top of their regular job, through to self-employed people running substantial businesses (eg tradespeople) who use these platforms to pick up extra clients. Certain tax issues like GST registration can therefore depend on the person’s particular circumstances.

    Is this money assessable income?

    Yes, you must declare this income in your tax return. This means you must keep records of the amounts you earn.

    If the platform charges you a fee or commission, you must declare the gross amount of income you earn. For example, if Sally earns $100 from a gardening gig and pays the platform a $15 service fee, she must declare the full $100 as income in her tax return.

    However, you’re entitled to claim relevant deductions, including platform fees and commissions. You may also be able to deduct other expenses you incur in generating the income, including equipment and some car expenses. If your expenses also entail some personal use, you’ll only be able to claim a portion of the expenses. Your tax adviser can explain exactly what you’re entitled to deduct and how to substantiate this. In the meantime, ensure you keep receipts of all expenses related to your gigs.

    How does GST work?

    If your annual turnover is $75,000 or more, you must register for GST. Below this threshold, registration is optional. Being registered for GST means:

    • You must report and remit GST of 10% to the ATO. This involves additional administration, and you’ll need to take this into account when deciding what price you’re willing to perform a “gig” for. Other workers you’re competing against who aren’t GST-registered may be willing to perform a gig at a lower price.
    • However, you can claim GST credits on the GST components of business expenses you incur, including the GST included in any platform fees. (Note that where you can claim a GST credit for an expense, you can only claim the GST-exclusive part of that expense as an income tax deduction in your annual tax return.)

    If you’re below the $75,000 threshold, seek advice from your adviser about whether GST registration would be worthwhile in your situation.

    Do I need an ABN?

    If you must register for GST (or wish to do this voluntarily), you’ll need an ABN. But what if your turnover is below $75,000 and you don’t want GST registration? While you’re not legally required to have an ABN, there are downsides of not having one: in some cases, businesses who hire you may have to withhold tax at the top marginal rate from the payment if you don’t provide an ABN.

    Anyone who carries on an “enterprise” may apply for an ABN. Most gig platform users, as independent contractors performing services to make money, arguably carry on an enterprise. If you’re only planning to use gig platforms very occasionally (or as part of a genuine “hobby” like photography or crafting, rather than to make a profit), talk to a tax adviser about your ABN needs.

    More time earning, less time on tax!

    Whether you’re using gig platforms occasionally or as part of a significant business, let us handle all your tax issues. We offer expert advice and assistance with deductions, ABNs and GST, freeing you up to spend more time pursuing your income-earning opportunities.

  • 104LowValueGoodsComplianceDid you know from 1 July 2018, GST will apply to sales of all goods to Australia. The previous $1,000 low-value threshold will no longer apply and those businesses that meet the $75,000 registration threshold will need to register, charge and remit GST to the ATO. This applies regardless of where the business is based.

  • 079AreYouSignedUpToTheNewSmallBusinessSuperClearingHouseThe small business superannuation clearing house (SBSCH) is a convenient service that allows a small business to make superannuation contributions for its employees in one single payment. It’s important to know that access to the service has recently changed significantly.

  • ATO Business BenchmarksThe ATO’s business benchmark data is a useful tool for smart business owners. Learn how you can access these benchmarks to judge your business’ performance against industry standards

  • 156BlitzOnSharingEconomy 720x454The sharing economy is booming in Australia with a large proportion of the population either making it their full-time job or making a little extra money on the side. However, with the boom comes the all-seeing-eye of the ATO which is now firmly focused on the sharing economy.

  • ATO impersonation scams on the riseThe ATO is warning taxpayers about scammers who impersonate the ATO in order to obtain the taxpayer’s personal information or even to demand payment of a fake tax debt.

  • 009AvoidAnATOAuditYourEssentialGuideToSmallBusinessBenchmarksThe Australian Bureau of Statistics recently estimated that unreported business income totals around $24 billion, or 1.5% of our nation’s gross domestic product. To reduce the amount of money circulating under the radar, the ATO constantly monitors the cash economy to ensure small business owners report all of their income.

  • 066BitcoinPart2InTheBitcoinBusinessIn Part 2 of our series on bitcoin, we examine the tax and GST consequences for business; specifically, those businesses that buy and sell bitcoin or mine bitcoin.

  • 076BitcoinPart3CryptocurrencyComplianceBitcoin is “neither money nor a foreign currency” the ATO warns, but it is still an asset that can be treated as income or counted as capital gains. In Part 3 of our series on bitcoin, we look at the compliance implications of operating bitcoin and how the ATO intends to monitor cryptocurrencies in general.

  • 101Budget2018WhatsInItForYouIt’s May, which means it’s Budget time. In the last full Budget before the next Federal election, the Treasurer delivered an election Budget with enough sweeteners for everyone including businesses, income tax relief for individuals, measures to boost superannuation, and help for older Australians.

    The 2018-19 Budget was handed down on 8 May by Treasurer Scott Morrison. In the last full Budget before the next Federal election, ScoMo delivered what was widely perceived to be an election Budget with lots of sweeteners for everyone. So what’s in it for you?

  • BudgetBusinessIncentivesIs your business planning to purchase new assets? Perhaps new tools, a vehicle or computer upgrade? If so, you may be able to take advantage of the Coalition’s expanded “instant asset write-off” incentive.

  • BudgetTaxCutsWith a federal election just around the corner, both major parties have put personal tax breaks front and centre of their Budget plans. Make sure you understand each party’s tax policy as you head to the polls this autumn.

  • 080BusinessCashPaymentsOnATOsRadarCash might be king, but the use of cash by businesses is attracting attention from the ATO. It will begin visits of selected businesses to ensure that all tax obligations are met. Third-party data and risk analysis is being used to identify the types of businesses the ATO will visit, which will not be limited to one particular industry this time around.

  • R and D Software Claim AlertIs your company planning to develop software as part of an experimental R&D project? You may qualify for the R&D tax incentive, even if you’re not a software developer

  • 120CashPaymentsLimitsComingSoonThe Government is planning to introduce an economy-wide cash payment limit of $10,000 as a part of its crackdown on the black economy. Any transaction that exceeds $10,000 will need to be made using an electronic system or by cheque.

  • There are two methods of accounting for GST: a cash basis and a non-cash basis (accruals).

    The method you use will affect when you must report GST.

    Businesses with an aggregated turnover (your business's turnover and the turnover of closely associated entities) of less than $10 million, or who use cash accounting for income tax, can use either method. Most larger businesses must use the non-cash method.

  • 121CompensationFromTheATOWith all the media attention around the ATO’s alleged rough treatment of the small business segment. Many of these small business owners may think that they have a case for compensation from the ATO for everything that they have been through.

  • Hunter Partners Corporate Tax Rates There’s finally some certainty about the corporate tax rate(s). Legislation has recently passed Parliament and the fate of other proposed changes has also been finalised. The law is settled, so it’s a good time to remind ourselves what the final state of play is concerning the dual rates of 27.5% and 30%.

  • Deemed dividend rules: new 10-year loan model

    003 NewDiv7ALoanModelThe government is acting to simplify the Division 7A rules that govern deemed dividends, proposing a new 10-year loan model for compliant loans. Significantly, companies with existing loans would be forced to transition to the new model

  • Deemed dividends: changes are coming

    Deemed dividends: changes are comingDiv 7A or deemed dividend payments may be familiar to you if you’re the shareholder or associate of a private company. It generally applies to treat a benefit provided by a private company to the shareholder or associate as a deemed dividend, which is then taxed at the recipients’ marginal tax rates.

  • 130FutureTaxReformDirectionsTo be fiscally responsible, a government needs to have enough resources to service its debt obligations. One of the main sources a government uses to service its debts is tax revenue.

  • Director identification numbers coming soon

    Director identification numbers coming soonAs a part of anti-phoenixing measures, the government is seeking to introduce a “director identification number” (DIN), a permanent and unique identifier to track directors’ relationships across companies.

  • 058Division7aThinkTwiceItsAlrightIf you own a small private company, perhaps with your spouse, think twice before borrowing money from that company. If the transaction is not recorded correctly you could end up paying tax on any loan thanks to the rules known as Division 7A. You as an individual and your company are different entities so using your business to fund private expenses may attract adverse consequences if proper advice is not sought.

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