Lidgerwoods In Our Community
Christmas is a time to reflect and consider those less fortunate than ourselves. A rewarding way to do this is to become involved with a local community group.
One such group very close to Lidgerwoods is the Wodonga Apex Club, of which Marc has been a member of for the last 15 years. The Wodonga Apex Club is a non-profit community organisation for 18-45 year olds who assist their local community by raising funds and providing their labour to worthy causes, the most notable being the planning, construction & management of the recently built community Pizza Oven at Sumsion Gardens in Wodonga.
You can see Apex members in action at the Wodonga Carols by Candlelight event, feeding the masses with their fantastic BBQ food. They will be out in force again for the Australia Day Ceremony.
If you’re interested in knowing more about Wodonga Apex, please feel free to contact Marc at our office – new members are always welcome.
Lidgerwoods also sponsor a local Wodonga junior basketball team – coincidentally coached by Marc, who until four years ago did not even know the rules of the game! The reward and enjoyment of the kids is yet another reason why it is great for anyone to be involved in our community.
As usual, we attach a few articles that may interest you surrounding tax matters and deductions, and a really important article for all employers in our client base.
“Keep taxing on…”
The Team at Lidgerwoods Accountants – Marc, Sophie, Louise & Kylie
The Day After - Your Work Christmas Party
Christmas is a great time to relax and enjoy the silly season. It is also a popular time to kick back and enjoy your business successes (and failures) with employees, clients and family by undertaking some sort of social event.
You have your fun but then regret both your headache and the size of the bill the next day, and guess what – you now have potential non-deductible expenditure or fringe benefits headaches also.
Quite simply, fringe benefits tax is payable where the benefit is provided to an employee in respect of employment, but you should also be aware that it upholds it’s very own entire Act of Parliament! Therefore you need to be aware that fringe benefits tax is very complex and all factors of each event need to be taken into consideration such as:
Editor: Every scenario is unique and has differing consequences. If you have any questions in relation to your annual party or gift giving, (and please no taunting us with your exciting adventures or events) please contact Lidgerwoods Accountants.
ALP announces massive (potential) changes
The Leader of the Opposition, Bill Shorten, has announced that a Labor Government (should they be elected) will introduce a standard minimum 30% tax rate for discretionary trust distributions to "mature beneficiaries" (i.e., people aged 18 and over).
Although the ALP acknowledges that individuals and businesses use trusts for a range of legitimate reasons, such as asset protection and business succession, "in some cases, trusts are used solely for tax minimisation."
Labor’s policy will only apply to discretionary trusts, so other trusts – such as special disability trusts, deceased estates and fixed trusts – will not be affected by this change.
Labor’s policy will also not apply to farm trusts and charitable trusts, and other exemptions will apply, such as for people with disability (the Commissioner of Taxation will be given discretionary powers to manage this).
Their announcement also reiterated their other policies regarding tax reform, including further changes to superannuation, changes to negative gearing and CGT, and limiting deductions for managing tax affairs.
Editor: Although we don't normally report on Opposition tax policies, this policy change is so fundamental, and the existing state of the Federal Parliament is so chaotic, that we believe it's worth bringing this to your attention.
Single Touch Payroll update
A limited release of 'Single Touch Payroll' began for a small number of digital service providers and their clients on 1 July 2017, with Single Touch Payroll operating with limited functionality for a select number of employers.
Editor: Single Touch Payroll will effectively require some employers to report information regarding payments to employees (or to their super funds) in 'real time', via their payroll software.
The following timeline sets out what is happening in the lead-up to the mandatory commencement of Single Touch Payroll next year.
September 2017 – the ATO has written to all employers with 20 or more employees to inform them of their reporting obligations under Single Touch Payroll.
1 April 2018 – employers will need to do a headcount of the number of employees they have, to determine if they need to report through Single Touch Payroll.
From 1 July 2018 – Single Touch Payroll reporting will be mandatory for employers with 20 or more employees.
Editor: Although this relates to larger employers (greater than 20 employees), we recently attended an ATO tax agent forum at which we were advised that the intention is to bring this into play for all other employers the following year (so from 1st July 2019 this will likely apply to ALL employers – watch this space for future news regarding this matter). This leads to the notion that all clients with employees (even if only the business owners themselves) will have little option but to begin to use employment compliance software in the coming years. Lidgerwoods will no doubt be in contact with all clients as confirmation of this comes to light.
|ATO: Combatting the cash economy
The ATO has reminded taxpayers that it uses a range of tools to identify and take action against people and businesses that may not be correctly meeting their obligations. Through 'data matching', it can identify businesses that do not have electronic payment facilities.
These businesses often advertise as 'cash only' or mainly deal in cash transactions. When businesses do this, they are more likely to make mistakes or do not keep thorough records.
The ATO’s ability to match and use data is very sophisticated. It collects information from a number of sources (including banks, other government agencies and industry suppliers), and also obtains information about purchases of major items, such as cars and real property, and then compares this information against income and expenditure reported by businesses and individuals to the ATO.
Example: Unrealistic personal income leads to unreported millions
The income reported on their personal income tax returns indicated that a couple operating a property development company didn’t seem to have sufficient income to cover their living expenses.
The ATO found their company had failed to report millions of dollars from the sale of properties over a number of years.
They had to pay the correct amount of tax (of more than $4.5 million) based on their income and all their related companies, and also incurred a variety of penalties.
Example: Failing to report online sales
A Nowra court convicted the owner of a computer sales and repair business on eight charges of understating the business’s GST and income tax liabilities.
The ATO investigated discrepancies between income reported by the business and amounts deposited in the business owner’s bank accounts, and found that the business had failed to report income from online sales.
Get it in writing and get a receipt
The ATO also notes that requesting a written contract or tax invoice and getting a receipt for payment may protect a consumer's rights and obligations relating to insurance, warranties, consumer rights and government regulations.
Consumers who support the cash economy, by paying cash and not getting a receipt, risk having no evidence to claim a refund if the goods or services purchased are faulty, or prove who was responsible in case of poor work quality.
Editor: Accountancy Insurance premiums were recently sent to all existing clients inviting them to be covered for professional fees to defend or assist in cases such as those above. It’s not too late to take up the cover still if you’d like to be involved, just pay the invoice we recently sent you. If you’d like to know more about this policy, please contact Kylie at our office.
ATO's occupation-specific guides
The ATO has developed occupation-specific guides to help taxpayers understand what they can and can’t claim as work-related expenses, including:
The guides are available for the following occupations:
The website link below can direct you to these guides:
Editor: If you encounter anything uncertain in these guides, feel free to contact our office and we can discuss this further taking to account your personal situation.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
Lastly we welcome your feedback. If you found this E-Newsletter very useful (or not?),
'The Team' at Lidgerwoods Accountants