~A Day in the Office~

Transcription

1 ~A Day in the Office~ Hi Everyone, Welcome to the April-May 2016 newsletter. It is with heavy heart that we bid farewell to our beloved Matt. He has left the fabulous Coffs Coast to move to Papua New Guinea to count rice...not literally, I am sure he will be counting numbers as well. We wish Matt all the best on his new endeavour, our doors will always be open if he ever wishes to return. For Matt's farewell we decided to roll up our sleeves and head out for a game of paintball, it's not everyday you get to shoot the "Boss", it was very therapeutic...only kidding!! Sam, Jo and Hannah are off to the Gold Coast in a few weeks for the 2016 NTAA Tax Schools so we can keep you up to date on all the latest tax gossip. Hannah is just over half way through her bachelor of business studies and is showing some impressive results. In 2 years she will be a fully qualified accountant living the numbers dream. Denise is heading off with Geoff for a caravanning trip to the Northern Territory. It's gold the're after - so if she doesn't come back we may all pack up and head out west. Watch out for the crocodiles in those billabongs Denise. That's all from us here at the office, see you next time! From the team at Advantage Plus Tax tel: fax: info@advantageplustax.com.au 24 Gordon St, PO Box 25, Coffs Harbour NSW 2450 tel: fax: info@advantageplustax.com.au 24 Gordon St, PO Box 25, Coffs Harbour NSW 2450

2 ATO reminder What s new for small business? The ATO has issued a timely reminder before the end of the financial year on the changes announced in last year s Budget. Instant asset write-off similar depreciation rules Small businesses can immediately deduct the business portion of most (new or secondhand) assets if they cost less than $20,000 and were purchased between 7.30pm on 12 May 2015 and 30 June From 1 July 2017, the threshold will return to $1,000. Accelerated depreciation for primary producers From 12 May 2015, primary producers can immediately deduct the costs of: Fencing previously deducted over a period up to 30 years: and Water facilities previously deducted over three years. They can also deduct the cost of fodder storage assets over three years, instead of 50 years. Deductions for professional expenses for start-ups From 1 July 2015, small businesses are entitled to certain deductions when starting up a small business. The range of deductible start-up costs includes professional, legal and accounting advice, and government fees and charges. Small business restructure roll-over From 1 July 2016, small businesses will be able to change the legal structure of their business without incurring any income tax liability when assets are transferred by one entity to another. This roll-over basically applies to: CGT assets; trading stock; and depreciating assets used, or held ready for use, in the course of carrying on a business. FBT changes for work-related devices From 1 April 2016, small businesses will not incur an FBT liability if they provide their employees with multiple work-related portable electronic devices that have similar functions. These include devices that are primarily used for work, such as laptops, tablets, calculators, GPS navigation receivers and mobile phones.

3 Small business income tax offset From the 2015/16 income year, an individual is entitled to a tax offset on the tax payable on the portion of their income that is from: net small business income from sole trading activities; and/or their share of net small business income from a partnership or trust. The income tax offset can reduce the tax payable that relates to the individual s small business income by 5% (up to $1,000.00) each year. The ATO will work out the offset based on the total net small business income reported in a client s income tax return. Company tax cut for small businesses For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%. The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate. If you need to discuss any of the above please contact our office preferably before 30 June. ATO sounds warning to super funds with collectables The ATO is warning trustees of SMSFs who hold investments in collectable* or personal-use assets*, acquired before 1 July 2011, that time is running out for those items to be transferred out of the fund under the old rules. Basically, collectables and personal use assets are things like artworks, jewellery vehicles, boasts and wine. Investments in such items must be made for genuine retirement purposes, not to provide any present-day benefit. From 1 July 2011, investments in collectables and personal-use assets must have a qualified independent valuation if they are transferred to a related party.. However, items acquired before 1 July 2011 can be transferred to a related party, without a qualified independent valuation, provided the transfer take place before 1 July 2016, and the transaction is made on an arm s length basis. Again, if any clients wishes to take advantage of this window, they should contact us very soon. Government set to re-think the backpacker tax Basically, the backpacker tax, as announced, would see backpackers who work in the agricultural industry during harvest time being taxed at 32.5% from their first dollar of income. Last month, the National Farmers Federation issued a media release slamming the tax and its negative effect on the agricultural industry, which relies heavily on backpackers. It pleaded for a more reasonable tax of about 19% The Deputy Prime Minister and the Assistant Agriculture and Water Resources Minister have announced a review into taxation arrangements For the Working Holiday Maker visa program. The review s scope will cover taxation and superannuation arrangements under the program.

4 The review is intended to ensure the right measures are in place to support the two key growth sectors of agriculture and tourism. We know about 40,000 backpackers work in agriculture for a few months each year, the majority in horticulture at seasonal peaks, Deputy Prime Minister Barnaby Joyce said. The clear aim is to make sure we have a balanced and equitable approach to the tax status for workers here on visas we do not want to risk a slide into black market employment in agriculture and tourism, Assistant Minister Anne Ruston said. ATO releases latest business benchmarks The ATO says that the 2013/14 data is now available for the Small business benchmarks. The ATO uses these benchmarks as a guide on industry trends to identify businesses that may be avoiding their tax obligations by not reporting some or all of their income. The ATO says that using the Small business benchmarks can assist with building taxpayers businesses. They say that taxpayers should compare their details against similar businesses in their industry and see how competitive they are or where improvements can be made. We can help you find the benchmarks for your industry (if any) GIC and SIC rates for June quarter The ATO has published the 2016 June quarter rates for the General Interest Charge (GIC) and the Shortfall Interest Charge (SIC): GIC annual rate 9.28% GIC daily rate % SIC annual rate 5.28% SIC daily rate % Impending blowout from the leaked Panama Papers Clients may have recently heard something about an unknown source who has leaked 11.5 million documents from the Panamanian law firm of Mossack Fonseca. Basically, the documents illustrate how many wealthy individuals hide their money from tax authorities. Under a plan devised by the Commissioner of Taxation, Chris Jordan, 35 countries have agreed to mount the most ambitious international investigation in history to hunt down tax evaders identified in the Panama Papers leak. About 800 Australians are listed in the files of Panama law firm Mossack Fonseca, from which confidential correspondence was leaked, and 80 of those are identified in the Australian Crime Commission s (ACC s) database for serious and organised crime. The ATO says that it has now linked over 120 of them to an associated offshore service provider located in Hong Kong.

5 Deputy Commissioner, Michael Cranston, said that The information we have includes a large number of taxpayers who haven t previously come forward, including high wealth individuals, and we are already taking action on those cases. The documents from Mossack Fonseca have been exposed in a global media project led by the international Consortium of Investigative Journalists (ICIJ). The ICIJ plans to release the names of all of the 240,000 offshore entities set up by Mossack Fonseca, along with directors and shareholders, next month. Gold Coast businesses under the ATO s microscope As part of an ongoing, Australian-wide program, the ATO has advised that it will be visiting restaurants, cafes and take-aways, along with hair salons and nail bars, on the Gold Coast. Assistant Commissioner Matthew Bambrick said In all, we ll be visiting around 250 businesses in the Gold Coast to talk about a range of topics, including business registration, record-keeping, superannuation and lodgement. Where taxpayers are unwilling to work with us or continue to cause us concern, we will undertake further investigation. In Sydney and Melbourne, for example, we have now moved to auditing businesses that didn t want to work with us. ATO SuperStream deadline rapidly approaching With the SuperStream deadline of 30 June rapidly approaching, ATO Deputy Commissioner James O Halloran says now is the time for employers who are not yet using SuperStream to cross it off their to-do list. SuperStream is the new way employers must pay super. It means paying super and sending employee information electronically. More than 60% of all Australia s small businesses are now using SuperStream. Employers who are using SuperStream have reduced the time they spend on super by an average of around 70%, each cycle, says Mr O Halloran. We are encouraging the remaining employers who have not yet adopted SuperStream to do so before 28 th April. By taking action now employers will have a chance to test their SuperStream solution and ensure things are running smoothly and eliminate any stress around the 30 June deadline, says Mr O Halloran. ATO s High risk industries for super guarantee Each year, the ATO identifies industries that they believe are at risk of not meeting their super guarantee obligations for eligible employees. This year they are looking at these industries: bakeries; supermarkets; car retailers; and computer system designers. Letters will be sent to clients in these industries advising of planned audits from July Lifestyle assets and CGT

6 The ATO has advised that it has identified some instances where lifestyle assets, such as artworks and collectables, are not being properly accounted for. They said that they want to help taxpayers with these kinds of assets comply and be aware they may be subject to CGT on disposal. They said that it s important taxpayers are aware that: Items purchased for more than $500 on or after 20 September 1985 are subject to CGT, even if they are kept mainly for the personal use or enjoyment of your client; Special CGT rules apply to items that form part of a deceased estate; and The date of purchase/auction needs to be accounted for, not the settlement date. The ATO is currently working with insurance companies to identify owners of these sorts of assets. Clients who may be effected should contact our office. Contractor payments data matching program The ATO has advised that it is continuing its Contractor payments data-matching program. It will acquire data from businesses that it visits as part of its employer obligations compliance program during the 2016/17, 2017/18 and 2018/19 financial years. The data collected from businesses is used to identify contractors that may not be meeting their taxation obligations through: not registering correctly with the ATO; non-lodgment of returns; failing to report payments received; and not paying amounts of tax due to the ATO. This is an ongoing data matching program and has been conducted for more than five years.