We’ve summarised the most important financial and accounting news for the month of April 2018.
Following are the key points of this month’s major tax and compliance measures and deadlines to keep track of.
The fringe benefits tax return instructions
The ATO has released the instructions for completing FBT returns, including guidance on changes which have been made, as well as the rates and thresholds for 2018.
Although these rules have, for the most part, remained unchanged, the instructions provided by the ATO also include completing FBT returns, beyond an extension of the entitlement to car parking and extended work-related items exemptions for small business entities with an aggregated turnover of less than $10 million.
Moving away from increased audit activity of FBT returns for this year, the ATO is now focusing more on:
- employee declarations
- substantiation and record keeping
- correct reporting
You might also be interested in: How to Recognise an ATO Tax Scam
Sales to incur GST for “drop shipping”
The biggest change regarding GST rules is that goods sourced domestically and from overseas will now receive the same GST treatment when sold to consumers in Australia.
The new policy will take effect starting July 1st 2018, and will deal with sales of low value imported goods (those valued at $1,000 or less) to consumers in Australia.
How will this affect you?
The GST treatment of low value imported goods means that Australian retailers will need to apply GST at the point of sale, the same way they do with other domestic sales.
An update on cryptocurrency
The ATO’s updated guidance indicates that there might be situations where digital currency could be held on capital account, even if it is not held for making private purchases.
This could happen as part of a broader investment portfolio, e.g., if the asset is held for more than 12 months.
It’s important to determine whether digital currency is a personal use asset under the CGT provisions. For example, in case the asset was purchased for less than $10,000. Why? Because capital gains made on personal use assets are ignored in all other cases.
How do you determine the tax outcome when you exchange one cryptocurrency for another?
The ATO confirms that it will be necessary to determine the market value in Australian dollars of the property received as part of the transaction.
Inactive ABNs to be cancelled
Australian business numbers that appear to be inactive will automatically be cancelled by the ABR if they have:
- stopped their business activity
- declared no business income for the last two years
- not lodged business activity statement or income tax returns for more than two years
- not updated their tax returns or activity statements
Tip: Every business owner is generally required to lodge a tax return, regardless of the income or profit being generated.
[ctt template=”7″ link=”hmciB” via=”no” ]Tip: Every business owner is generally required to lodge a tax return, regardless of the income or profit being generated.[/ctt]
This includes income statements that are below the tax-free threshold.
Advisers should ensure that all sole trader business clients have lodged individual tax returns.
You might also be interested in: I’ve Missed The Tax Deadline, What Do I Do?
Nothing to report?
Even if you have nothing to report this quarter, you still have to lodge a nil activity statement.
How do you do that?
Simple, go online and follow these steps:
- Choose the ATO business portal or your myGov account if you are a sole trader (you can also call 13 72 26 if you want to lodge your nil activity statement over the phone).
- Select the Prepare as NIL option on your activity statement form.
Simplify your fuel tax credit calculations and claims
Do you claim fuel tax credits for using your heavy vehicle, farm equipment or other machinery for your business?
To simplify your fuel tax credit claim for less than $10,000 each year, you can calculate your costs using the increased rates that apply at the end of the period.
If you want to know exactly how much you should enter on your BAS, you can use our easy fuel tax credit calculator.
Enter all of your fuel into the final rate period and that’s it. The calculator will use the right rates to work out how much should your claim be.
Want to find out more about how these updates affect you?
Keep up to date with all the ATO’s proposed changes to this month’s tax and accounting news and updates. Don’t forget to come back next time, for more information. Until then you can get in touch below.