Our Blog
Can the ATO take money out of your bank account? Following on from the media "Your Right to Know"campaign, we discuss some of the ATO's powers in our November 2019 update.
Capital Gains Tax and the family home: expats and foreign residents in the ATO's sights again. Read more about the governments plans to remove the main residence exemption for non-residents. Following from our September update where tax residency does not always align with other residency rules, expats or other non-residents with Australian property should be aware of these proposed changes.
Finally legislation has been passed to close the superannuation loophole preventing employers from claiming any salary sacrifice superannuation as part of their Superannuation Guarantee Contribution commitments. We provide an update on this welcome rule due to commence July 2020.
Holding vacant land with the intention of building an investment property? Read here for an overview on the changes which will affect 'Mum & Dad' investors from 1 July 2019:
Business and Tax Update November 2019
Superannuation Guarantee Amnesty - for those employers that are behind in their superannuation guarantee payments, the amnesty legislation is again before parliament. This will give those employers the chance to "self-correct" without facing crippling penalties. However, be warned, those that do not take advantage of the amnesty to voluntarily disclose short payments or non-payment of superannuation guarantee amounts will face tougher penalties under the proposed new legislation. Find out more in our October update.
Falling Interest Rates - what does this mean to you? Economist Emmanuel Calligeris discussed the impact of low interest rates.
Read more here: Business and Tax Update October 2019
The ATO's 'gloves off' approach to overseas income. Determining your tax residency is not always straight forward, nor is determining the overseas income and assets that need to be reported. Our September update covers this topic in more detail.
Rental Property Expenses - the tax office's favourite subject and always open to close scrutiny. Read more here to refresh your memory or learn more about what you can and can't claim.
Confused again at tax time? Our August update covers what the changes mean to you. Who is eligible for the new Low & Middle Income Tax Offset and how much you are entitled to.
Does your business receive $10,000 or more in cash? The government intends to restrict cash payments going forward with severe penalties for those who ignore the limit.
And on a much lighter note read here for some of the weirdest tax deductions on the ATO's list of most unusual claims:
Our first update for the new financial year is here: Business and Tax Update July 2019
Topics covered include:
Changes to Superannuation 1 July 2019
Single Touch Payroll for family members
Laundry claims being reviewed by the ATO
Who owns the assets in a Trust?
Don't Lodge Your Tax Return Too Soon!
The Australian Taxation Office has been flooded with 90,000 calls as tax cuts pass, according to ABC news. The Federal Government's tax plan includes changes to the Low and Middle Income Tax Offset (LMITO), reducing the amount of tax low and middle income earners need to pay. The Federal Government estimates that 4.5 million Australian taxpayers will be eligible for the full LMITO, and a further 5.6 million will receive a partial offset. 
This will encourage taxpayers to lodge their returns as soon as possible and while the ATO has said it would aim to process online tax returns within two weeks, has previously warned Australians not to lodge too early.
Assistant Commissioner Karen Foat has asked taxpayers to wait until around August to lodge. "Most employers have until July 31 to finalise their employees' income statements so, we strongly encourage taxpayers to wait a few weeks before lodging their tax return," she said. "If you lodge your tax return before your income statement is tax ready, your employer might make changes, and you may need to lodge an amendment. In some cases, additional tax and interest may be payable." Waiting also allows more time for other information, such as from banks , health funds and government agencies to be reported to the ATO.
The Government has increased the base and maximum amount of the LMITO to $255 (from $200) and $1,080 (from $530):
- Less than $37,000 get $255
- Between $37,001 and $48,000 get $255, plus 7.5 cents per dollar above $37,000
- Between $48,001 and $90,000 get $1,080
- Greater than $90,000, the offset decreases at a rate of 3 cents per dollar, ceasing at income of $126,000
Warning - if you owe the ATO money and are entitled to the new $1,080 offset, that entitlement will firstly be applied against your existing ATO debt before you receive the rest.
Read the ATO statement regarding the changes here ATO Statement on the Low and Middle Income Tax Offset
The team at Davies, Thompson & Wright take this opportunity to thank all our valuable clients for your continued support throughout 2018.
We wish you all a Merry Christmas and a safe and Happy New Year for 2019 - along with some much needed rain!
Our office will close at 5:00 pm Thursday 20 December 2018 and re-open 9:00 am Monday 7 January 2019.
No tax deductions if you don't meet your tax obligations - New laws passed by parliament last month directly target the behaviour of taxpayers that don't meet their obligations.
Contractor or employee? A former Foodora Australia delivery rider, Joshua Klooger, recently won an unfair dismissal claim despite a service agreement that classified him as an independent contractor. We explore the implications of the case.
Are you in the cleaning services, road freight, IT or security, investigation or surveillance business? The Taxable Payments Reporting system was introduced to stem the flow of cash payments to contractors and rampant under reporting of income. Introduced to the Building and construction services industry back in 2012, this was extended to the cleaning services industry from 1 July 2018. The addition of road freight, IT or security, or investigation or surveillance services, from 1 July 2019, adds another layer. For businesses providing mixed services, if 10% or more of your GST turnover is made up of affected services, then you will need to report the contractor payments to the ATO.
All this and more are discussed in our Tax & Business Update - December 2018.
Accelerated tax rate reduction for small business - Small business is still a vote winner with the Government and Opposition teaming up to accelerate tax cuts for the sector by 5 years impacting on an estimated 3.3 million businesses.
The new rules for gift cards – what you need to know - In Australia, around 34 million gift cards are sold each year with an estimated value of $2.5 billion. On average, an estimated $70 million is lost because of expiry dates. What your business needs to do from 1 November 2019, and what happens if a business ignores the new rules.
Travelling to and from your investment property - From 1 July 2017, new rules came into effect that prevent taxpayers claiming a deduction for expenses they incur travelling to and from their residential investment property. We looks at the exceptions to the rules.
For further information on these topics and more read our November 2018 update.
Working from home? A lot of people do some sort of work from home. It might be simply answering emails on the couch or working from home a few days a week. So, what can you claim if you're putting in extra hours?
What does the China/US trade war mean to Australia? As the bilateral trade war between the US and China heats up, Australia is caught between its cultural and military ties to the US and its strong economic relationship with China.
These diverse topics and more are explored further in our Business & Tax Update for October 2018.