March is already over – does time fly, or what?
Here at Shuriken Consulting we are back with a quick look at some of the most important tax and accounting updates this month. Here is all you need to know about the latest financial changes in March 2017, and how they will affect you.
Making “cents” of car allowances
The Australian Taxation Office (ATO) made some changes to car allowances.
For example, if you’re paying your employees a car allowance that is over 66c per kilometre, you will need to withhold tax on the excess amount.
Advice: You can start to withhold tax on the amount you pay over 66c and tell your employees about this.
What if your employees think not withholding until now will bring them a tax bill?
Generally, this shouldn’t have a significant impact on their taxes for the year. It all depends on the amount you have paid your employees until now.
Tip: Agree with your employees to increase the amount you withhold for the rest of the financial year to cover the deficit.
You might also be interested in: How Much Do You Know About Tax Deduction?
Easier GST reporting for food retailers
A lot of small food merchants distribute products that are both taxable and GST-free. Keeping a record of these sales can be difficult.
This month, the ATO is putting an end to it. They have come up with a few simplified accounting methods (SAMs) to help you estimate the amount of GST you have to pay at the end of each tax period.
[ctt template=”7″ link=”2i0Yc” via=”no” ]The ATO provides a few simplified accounting methods (SAMs) to help you estimate the amount of GST you have to pay.[/ctt]
The purchases snapshot method can calculate GST credits for trading stock purchases. But to use this method you need to meet several conditions:
- You need to be registered for GST
- You need to operate a restaurant, café or catering business
- Your GST turnover should not be more than the small business turnover threshold (currently $2 million)
Currently, there are five SAMs you can choose from. Your accountant can assist you in choosing the best method for your business.
GST on imported services and digital products
The ATO announced new GST rules on selling digital products and services by foreign businesses to Australian consumers. This new rule will apply to digital products like movies, music, apps, games and architectural or legal services.
The regulations will be applied starting 1 July 2017, although they already have an impact. The transitional rules affect foreign businesses that meet the registration turnover threshold of $75,000 and supply digital products or services to Australian consumers.
For example: A foreign business which supplies software for download by an Australian consumer on a 12-month subscription will need to pay GST on the part of the subscription that relates to the period from 1 July 2017 onwards. Then, the foreign business has to report the GST collected and remit the amount to the ATO in the first tax period after 1 July 2017.
The ATO announced a simplified system available starting from 1 April 2017. It will assist foreign businesses to register, report and pay GST online.
You might also be interested in: February Tax & Accounting Roundup
ATO’s new live chat: get help when you need it
Last but not least, is the launch of a new ATO live chat service which provides expert guidance on topics like:
- payment arrangements.
The live chat is available from 3 pm to 9 pm (AEST) Monday to Friday and 10 am to 4 pm (AEST) Saturday, except national public holidays. Give it a try here.
Want to know more about how these updates affect you?
One of our dedicated specialists is ready to assist you with any questions you might have about the latest tax and accounting updates. Get in touch with us today: