Here we are again, at the end of another month.
You already know what that means – a brand new tax and accounting roundup.
Here’s all you need to know about the latest ATO updates from this month. Let’s get you up to date…
Have your clients had changes in creditable purpose?
There are clients that use their property purchases in a different way than its original intention.
If you have clients who claimed GST credits for purchases and they now use as input taxed supplies, you need to report adjustments for change in creditable purpose in June.
Let’s say a client creates new residential premises for sale but rents them out instead. You will have the obligation to make an increasing adjustment on their June activity statement.
Get your $20,000 instant asset write-off
Have you purchased an asset before 1 July 2017 that cost less than $20,000? You can be eligible for business portion deduction in your 2017 tax return.
Here are a couple of conditions that can make you eligible:
- You have a turnover less than $10 million (this has increased from $2 million)
- The asset was first used or installed ready for use in the 2016-17 income year
Assets that cost over $20,000 can’t be deducted right away, but they will continue to be deducted over time using a small business asset pool. You can write-off the balance of this pool if the balance is less than $20,000 at the end of an income year.
You might also be interested in: Tax Deductions for Travel Expenses: Travel Smarter and Cheaper
Affected by natural disasters this year?
If your records have been damaged or destroyed by this year’s natural disasters, the ATO can help you reconstruct your records. You can re-issue copies of your tax documents, such as:
- income tax returns
- activity statements
- notices of assessment
The ATO can accept claims without substantiation if it’s not reasonably possible for you to obtain your original documents.
Have you hired employees during the financial year? Here’s what you must do:
- issue PAYG withholding payment summaries to employees by 14 July 2017
- your PAYG withholding payment summary annual report is due to us by 14 August 2017
Casual employees may be entitled to super
Employing casual workers can give businesses a high level of flexibility. However, it’s important to remember that casual employees may be entitled to super.
Here is all you need to know:
- You may need to pay super guarantee (SG) regardless of whether your employee is full-time, part-time or casual.
- If you pay your employee $450 or more (before tax) in a calendar month, you have to pay SG on top of their wages.
- If your employee is under 18 they must also work for more than 30 hours per week to qualify for SG.
Super guarantee is currently calculated at 9.5% of a casual employee’s ordinary time earnings. Including their wage plus any casual or shift loadings for ordinary hours of work, commissions and some allowances. However, it doesn’t include overtime payments.
[ctt template=”7″ link=”6SFH3″ via=”yes” ]Tip: The ATO has a super guarantee eligibility tool that can help you figure out if casual workers are eligible for super.[/ctt]
Check it out here!
ATO issues notices to many organisations
Organisations have been served with notices by the ATO for failing to comply with their tax obligations.
There aren’t a lot of details about what type of income the ATO is targeting. One thing is for sure though – if you earn income, you pay tax.
This operation is part of a joint task force with the Australian Federal Police. Data matching technology in recent years that has helped identify movements of cash and income from undeclared and often illegal activities.
“Follow the cash” philosophy works well and often results in frozen bank accounts, disrupted cash flows and supply chains, which impacts on the overall viability of illegal activities.
The push for affordable housing
The Australian Government announced in the 2017-18 Budget that an increase in the CGT discount for individuals who choose to invest in affordable housing. The current 50% discount will increase by 10% to 60% for Australian residents choosing to invest in qualifying affordable housing.
The Government is also creating investment opportunities for Managed Investment Trusts (MIT). They can set up to acquire, construct or redevelop property to hold as affordable housing.
The affordable housing must be available for rent for at least 10 years in order for investors to qualify for the concession.
You might also be interested in: May Tax And Accounting Roundup
Fringe Benefits Tax (FBT) declaration forms
The ATO released five updated employee declaration forms. They indicate the changes in the FBT rules that have been applied on 1 April 2016.
These changes reflect the following changes:
- The 33.3% method is no longer used
- Different cents per kilometre rates for engine type and capacity no longer apply
Trust income deadline approaching
One last thing. Mark your calendars!
30 June 2017 is the deadline for trustee clients to make their resolutions for trust income distribution.
Clients need to make sure their income distributions are in conformity with the trust deed. Some trust deeds may have an earlier deadline for the resolutions.
Want to know more about how these updates affect you?
One of our specialists here at Shuriken Consulting is ready to assist you with any questions you might have about the latest tax and accounting updates. Get in touch with us today: