Large numbers of scammers have been trying to trick people with fake tax debt scams recently. These scammers will tell you that you have a tax debt and if you don’t pay it straight away, you’ll be arrested. If you receive a phone call or message like this, don’t respond.
The ATO will never:
threaten you with immediate arrest, jail or deportation
request payment of a debt via iTunes, Google Play gift cards or other vouchers
insist you stay on the phone until you pay
prevent you from discussing your tax affairs with your agent or adviser.
Here are some useful tips.
Tip 1 Know the status of your tax and super affairs! You’re less likely to fall victim to a scam if you’re aware of any refunds, debts and lodgments due. Chat with your tax agent or log into our online services to check your details.
Tip 2 Stay safe online by logging into our online services through our website or ATO app – never via links in emails. For added security, update your myGov sign-in option so you receive SMS codes.
Tip 3 Help protect your family and friends, especially older relatives! Warn them about tax scams and tactics so they don’t get tricked into paying money or sharing their personal info.
If you’re ever unsure if a contact is really from the ATO, hang up and call us on (03) 9904 9261.
You can verify or report a scam here – https://www.ato.gov.au/general/online-services/identity-security/verify-or-report-a-scam/
A business industry code (BIC) is a five-digit code you include on relevant tax returns and schedules that describes your main business activity.
BICs are derived from the Australian and New Zealand Standard Industrial Classification (ANZSIC) codes and have been simplified for tax return reporting purposes.
Find the correct BIC for your business
Use the BIC tool to help you find the correct BIC for your business.
If you know your ANZSIC code or BIC
enter the code in the search field
click through the relevant link and check that it covers your activities.
If you don’t know your code you can search by entering your main business activity or a key word that describes what you do into the search field (see example).
Click through the relevant link and check that it covers your activities.
About the codes
The codes are very broad. One code might cover many different work types, activities and industries. If the codes are not an exact match to your role or title, choose the code that is closest.
If you have more than one work type or business:
use the activity that gives you the highest gross income or smallest loss
report this at the relevant labels on your tax return.
Example: search for codes
Search the broadest term for your business and select the closest match. If you’re a:
copywriter – search ‘writing’
financial manager – search ‘finance’ or ‘management’ separately
ride-sourcing driver for Uber, Shebah, GoCatch or others – search ‘taxi’
teacher – search ‘teaching’, ‘school’ or ‘tutoring’.
End of example
How to update your code
As your work or business changes or expands you may need to update your BIC. Do this by:
entering the new code on your next income tax return
Using the right code is important as it ensures you are lodging your return in the right category. This helps:
avoid delays in the processing of your return
reduce the risk of your business being incorrectly targeted for compliance activities
ensure you receive services and materials that are relevant for your business type.
After you have the right BIC, you can also use the small business benchmarks to compare your business’ performance against similar businesses in your industry.
You may be required to pay fringe benefits tax (FBT) if you provide certain fringe benefits to an employee (or their associate) in respect of employment. An employee can be a current, future or past employee, or a director of a company or trust.
You will need to pay FBT even if the benefit is provided to an associate of your employee or by a third party under an arrangement with you.
Examples of fringe benefits include:
allowing your employee to use a work car for private purposes
giving your employee a discounted loan
paying an employee’s gym membership
providing entertainment by way of free tickets to concerts
reimbursing an expense incurred by your employee, such as school fees
giving benefits under a salary sacrifice arrangement with an employee.
Some employers, including charities, need to assess the status of their workers when working out their FBT liability. Generally, benefits provided to volunteers and contractors don’t attract FBT.
You must self-assess your own FBT liability each FBT year (1 April to 31 March) and lodge an FBT return before the due date.
Your tax return will show whether you have made a tax profit or a loss and will determine how much tax you should pay.
You need to keep comprehensive records explaining all transactions that relate to your tax affairs. This will help you complete and lodge your tax returns each year.
Keeping good records also ensures you are meeting your reporting obligations.
Records you need for your tax return
Your business records must contain enough information to calculate the income, expense and other amounts you must report in your tax return.
You will need to keep records of your transactions; cash, online, EFTPOS, bank statements, credit or debit card, covering:
gross earnings or proceeds from your business including
sales
income earned from the sharing economy
other money received such as
foreign income
personal services income
crowdfunding
payments outside of ordinary business activities
government payments
commissions, investment earnings, gratuities and compensation payments
expenses you will claim as a deduction such as
business travel expenses
motor vehicle expenses
salary, wages and super
repairs, maintenance and replacement expenses
home office expenses for a home-based business
other operating expenses
capital assets and expenses
We may review your tax return and ask for copies of your records to check the information provided. If we are unable to verify these claims, we may adjust your return. We will contact you before this occurs.
It is easier for you to lodge your tax return if you update your records regularly. We recommend you use the following practices to help:
Reconcile daily sales to ensure all sales are accounted for.
Keep specific records showing when you use business purchases for private purposes or make cash payments and drawings. This will ensure your business finances can be easily separated from your personal finances.
If you use a bookkeeper or a registered agent, regularly summarise your expenses. This may reduce the time it takes them to prepare your tax return or activity statements.
There are commercial business accounting packages which can automatically update and summarise your income and expenses records for you. Alternatively, you can do it manually by keeping a record of cash book totals for the period.
Use our record keeping evaluation tool to evaluate how well you are keeping business records.
You can claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms.
To make a deduction you may need to have written evidence that you purchased the clothing and diary records or written evidence of your cleaning costs.
If you received an allowance from your employer for clothing, uniforms, laundry or dry-cleaning, make sure you show the amount of the allowance on your tax return.
Follow the links below for more information about:
You can claim for clothing that is specific to your occupation, is not everyday in nature and allows the public to easily recognise your occupation – such as the checked pants a chef wears.
You can’t claim the cost of purchasing or cleaning clothes you bought to wear for work that are not specific to your occupation, such examples as a bartender’s black trousers and white shirt, a business person’s suit or a swimming instructor’s swimwear.
You can claim for clothing and footwear that you wear to protect yourself from the risk of illness or injury posed by your income-earning activities or the environment in which you are required to carry them out. To be considered protective, the items must provide a sufficient degree of protection against that risk.
Protective clothing includes:
fire-resistant and sun-protection clothing
safety-coloured vests
non-slip nurse’s shoes
rubber boots for concreters
steel-capped boots, gloves, overalls, and heavy-duty shirts and trousers
overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary clothes during your income-earning activities.
Ordinary clothes (such as jeans, drill shirts, shorts, trousers, socks, closed shoes) are not regarded as protective clothing if they lack protective qualities designed for the risks of your work.
You can’t claim the cost of purchasing or cleaning ordinary clothes you wear for work that may also protect you. For example, you can’t claim for normal, closed shoes, even though you wear them to protect your feet.
Work uniforms
You can claim for a uniform, either compulsory or non-compulsory, that is unique and distinctive to the organisation you work for.
Clothing is unique if it has been designed and made only for the employer. Clothing is distinctive if it has the employer’s logo permanently attached and the clothing is not available to the public.
You can’t claim the cost of purchasing or cleaning a plain uniform.
Compulsory work uniform
This is a set of clothing that identifies you as an employee of an organisation with a strictly enforced policy that makes it compulsory for you to wear the uniform while you’re at work.
You may be able to claim a deduction for shoes, socks and stockings where they are an essential part of a distinctive compulsory uniform and where their characteristics (colour, style and type) are specified in your employer’s uniform policy.
You may be able to claim for a single item of distinctive clothing, such as a jumper, if it’s compulsory for you to wear it at work.
Non-compulsory work uniform
You can’t claim expenses incurred for non-compulsory work uniforms unless your employer has registered the design with AusIndustry.
Shoes, socks and stockings can never form part of a non-compulsory work uniform, and neither can a single item such as a jumper.
You can claim the costs of washing, drying and ironing eligible work clothes, or having them dry-cleaned.
You must have written evidence, such as diary entries and receipts, for your laundry expenses if both:
the amount of your claim is greater than $150, and
your total claim for work-related expenses exceeds $300 – not including car, meal allowance, award transport payments allowance and travel allowance expenses.
If you don’t need to provide written evidence for your laundry expenses, you may use a reasonable basis to work out your claim. For washing, drying and ironing you do yourself, we consider that a reasonable basis for working out your laundry claim is:
$1 per load – this includes washing, drying and ironing – if the load is made up only of work-related clothing, and
50 cents per load if other laundry items are included.
If you choose a different basis to work out your claim, we may ask you to explain that basis.
Dry-cleaning expenses
You can claim the cost of dry-cleaning work-related clothing. If your total claim for work-related expenses exceeds $300 – not including car, meal allowance, award transport payments allowance and travel allowance expenses – you must have written evidence to substantiate your claim.
Before you sit down to do your tax, you’ll need to gather all the right information. Here are some of the documents you’ll need to complete your tax return.
Payment summaries – Outlines the income you have received from your employer, super fund or government payment like Centrelink and the Department of Veterans Affairs.
Bank statements – Details any interest you have earned during the period and fees you have paid.
Shares, unit trusts or managed funds statements – Information on dividends or distributions you’ve received. Dividends that you’ve elected to reinvest must be declared as income.
Buy and sell investment statements – Needed to calculate capital gains and losses. If you bought or sold any shares you can access the details on your online broking account or you can get them from your investment adviser or stockbroker.
Records from your rental property – If you use a property manager you will probably get an annual tax statement that details income and expenses, otherwise you will need to gather details of income received and expenses paid, including any capital gains or capital losses from the sale of property.
Foreign income – Details of foreign pensions or other foreign income.
Private health insurance policy statement – Information needed to complete the private health insurance section of your tax return.
Income you must declare
You can do your tax online using myTax. You can access myTax through myGov or the ATO website.
Smart tip
If you wait until mid August the ATO will pre-fill most of the information from employers, banks, government agencies and other third parties into your tax return. All you will have to do is double-check the information is correct, enter any deductions you have and hit submit.
If you are lodging your tax return before pre-fill is complete, here’s a list of common types of income that must be declared on your tax return.
Employment income
Super pensions, annuities and government payments
Investment income (including interest, dividends, rent and capital gains)
Business, partnership and trust income
Foreign income
Income from crowdfunding (for example donations received for a venture in which you intend to make a profit)
Income from the sharing economy (for example Uber or Air BnB)
Other income – including compensation and insurance payments, discounted shares under employee share schemes, some prizes and awards
When completing your tax return, you’re entitled to claim deductions for some expenses, most of which are directly related to earning your income (called ‘work-related expenses’). A deduction reduces your taxable income, and means you pay less tax.
Take a look at the ATO’s video about the rules on claiming your deductions
To claim a deduction for work-related expenses:
You must have spent the money yourself and not been reimbursed.
It must be directly related to earning your income.
You must have a record to prove you paid for it.
When your expenses meet these criteria, here’s a list of the things you may be able to claim.
Vehicle and travel expenses – This does not normally include the cost of travel between work and home but if you use your car for work or work in different locations then you may be able to claim a deduction.
Clothing, laundry and dry-cleaning expenses – To legitimately claim the cost of a uniform, it needs be unique and distinctive, for example it contains your employer’s logo, or is specific to your occupation, like chef’s pants or coloured safety vests.
Home office expenses – Costs could include your computer, phone or other electronic device and running costs such as an internet service. You can only claim the proportion of expenses that relate to work, not private use.
Interest, dividend and other investment income deductions – Examples include interest, account fees, investing magazines and subscriptions, internet access, depreciation on your computer.
Self-education expenses – Providing the study relates to your current job, you can claim expenses like course fees, student union fees, textbooks, stationery, internet, home office expenses, professional journals and some travel.
Tools, equipment and other equipment – If you buy tools or equipment to help earn your income, you can claim a deduction for some or all of the cost. Examples include protective gear, including sunscreen, sunglasses and hats if you work outside, office equipment, safety equipment and technical instruments.
Other deductions – other items you can claim include union fees, the cost of managing tax affairs, income protection insurance (not if it’s through super), overtime meals, personal super contributions and other expenses incurred in the course of earning an income.
The ATO has an app called myDeductions that will make record keeping easier. The tool allows you to record deductions including work-related expenses, gifts and donations, interest and dividends. It also lets you store photos of receipts and record car trips. The myDeductions app can be used by individuals and sole traders (sole traders can use it to keep track of business income) and at tax time you can send your deductions to your tax agent or upload them directly to myTax.
What tax deductions are not allowed
The ATO is focused on helping taxpayers get their deductions right, but they’re also on the lookout for red flags that identify people who are doing the wrong thing.
Here’s a list of deductions you usually can’t claim on your tax return.
Travel between home and work – which is generally considered private travel.
Car expenses – unless you are transporting bulky tools or equipment, that you need to do your job, that your employer requires you to transport, and there is no secure area to store the equipment at work.
Car expenses – that have been salary sacrificed.
Meal expenses – unless you were required to work away from home overnight.
Private travel – including any personal travel portion of work-related travel.
Everyday clothes – you bought to wear to work (for example, a suit or black pants), even if your employer requires you to wear them.
The cost of laundering eligible work clothes – unless you can show how you calculated the cost.
Higher Education Loan Program – contributions charged through the HELP scheme.
Self-education expenses – where there is no direct connection to your current employment.
Phone or internet expenses – that relate to private use.
Tools and equipment that cost more than $300 – however, you can depreciate the cost over a number of years.
Test your understanding of what you can and can’t claim with the ATO’s myDeductions quiz. If you are still not sure what you can or can’t claim visit the ATO or a registered tax agent.
Lodging your tax return in 2017
You can lodge your tax return online using myTax – it’s quick, easy, safe and secure. Visit the ATO website to find out how to lodge online.
If you have a spouse you will also need details of their income and expenses to make sure your entitlements are correctly calculated.
Once you have lodged your tax return keep an eye on your myGov inbox for your notice of assessment and tax receipt.
Smart tip
To lodge online, you will need to create a myGovaccount and then link it to the ATO.
Lodge your return before the deadline
If you are lodging your own tax return, you have until 31 October 2017 to lodge it. If you decide to use a registered tax agent, or are using a different agent to last year, you will need to contact them before 31 October.
Video: The ATO explains the best time to lodge with myTax
Take a look at the ATO’s video on lodging using myTax.
Get help from a registered tax agent
If you want to use a professional to do your tax return, make sure you use a registered tax agent. You can check if the agent is registered on the tax and BAS agent register.
Whichever way you choose to lodge your tax return, remember you are responsible for the claims you make, so make sure your deductions are legitimate and you have included all your income before you or your agent lodges your return.
Make tax this year as easy as possible by getting organised and knowing what information you will need to lodge.
Know the status of your tax and super affairs! You’re less likely to fall victim to a scam if you’re aware of any refunds, debts and lodgments due. Chat with your tax agent or log into our online services to check your details.
Warn them about tax scams and tactics so they don’t get tricked into paying money or sharing their personal info.
(03) 9904 9261.
