Last week, a local court has sentenced a 33-year old Sydney man after pretending to be a tax agent and charging several people a fee to lodge their tax returns, only to then steal their refunds.
The fake tax agent pretended to be a genuine tax agent to more than 1,000 people, charging $100 for his services and using their myGov login details to submit income tax returns on their behalf. He also stole $12,866.62 worth of refunds by having them directed to his personal account.
Make sure you are lodging your tax returns using a real tax agent who is registered with the Tax Practitioners Board Australia. You can check if their tax practitioner is registered on the Tax Practitioners Board website at tpb.gov.au
For more information give our team at SPS Business Consultants a call on ☎️ (03) 9904 9261.
Now let’s look at each of those 4 categories in terms of your tax obligations.
Entertainment gifts which cost more than $300
Entertainment gifts are more recreational gifts such as tickets to a concert or a musical, a movie theatre, live play, sporting events or gifting a holiday package.
For those entertainment gifts which cost more than $300 per employee, GST can be claimed and also it’s tax-deductible. The downside is that Fringe Benefit Tax (FBT) is payable at the rate of 49 percent on the grossed-up value.
Entertainment gifts which cost less than $300
For the entertainment gifts that cost less than $300 per employee, FBT is not payable, but also you can’t claim GST credits and not tax-deductible.
Non-Entertainment gifts which cost more than $300
Non-Entertainment gifts are items such as beauty and skincare products, flowers, wine, perfumes, gift vouchers, and hampers.
When the cost of those gifts are more than $300 per employee, you are liable to pay FBT, but it is tax-deductible and you can claim GST credits.
Non-Entertainment gifts which cost less than $300
When the cost of those non-entertainment gifts are less than $300 per employee, you are not liable to pay FBT, and also it is tax-deductible and you can claim GST credits.
Please have a look at the below matrix made by us to get a further understanding.
What’s the best gift to give an employee this Christmas?
Based on the above criteria, a Non-Entertainment gift that costs less than $300 per employee is the best choice of gift this Xmas. It will be tax-deductible, GST credits can be claimed and also you will not be liable to pay FBT.
For more information give our team at SPS Business Consultants a call on ☎️ (03) 9904 9261.
Have you considered your tax obligations as an airbnb host?
Extra income from your airbnb business will result in more taxes for you. But also you will be able to claim business-related expenses when you are running it as a business.
You can claim expenses such as,
Internet and phone costs
Water, power and council rates
Upkeep and repairs
Depreciation on the cost of furnishings and equipment
Be careful when it comes to GST. There is a popular misconception that airbnb income is residential income hence you don’t need to register for GST even if your income exceeds $75,000 per annum.
But according to airbnb’s tax guide and ATO, short term holiday rental will be classified as commercial accommodation and should be registered for GST if your income exceeds $75,000 per year.
For more information give our team at SPS Business Consultants a call on ☎️ (03) 9904 9261.
You can no longer claim deductions for payments to workers if you have not met your pay as you go (PAYG) withholding obligations. This applies to income tax returns lodged for the 2020 income year onwards.
If PAYG withholding rules require an amount to be withheld, you must:
withhold the amount from the payment before you pay your workers
report that amount to ATO.
You will not lose these deductions if you withhold:
the correct amount but make a mistake when reporting – you should correct the mistake as soon as possible.
You will only lose your deduction if no amount is withheld or reported to ATO, unless you voluntarily disclose this before ATO examine your affairs.
This measure aims to level the playing field for honest businesses doing the right thing by their workers. It is part of the government’s response to recommendations from the Black Economy Taskforce.
When hiring workers, do you understand the difference between contractors and employees for tax and super purposes? Getting it wrong compromises your ability to meet your tax and super obligations, and can mean your workers miss out on employee entitlements. If you misclassify your workers you can be caught out with penalties and charges.
You can understand how to correctly classify your workers, by knowing that there is no one deciding factor that makes a worker an employee or contractor. To help classify your workers, you must consider the whole working arrangement, including questioning your worker’s:
ability to subcontract/delegate: can the worker pay someone else to do the work?
basis of payment: is the worker paid based on an agreed quote they provided?
equipment, tools and other assets: does the worker provide their own tools and equipment needed to do the job?
commercial risks: is the worker legally responsible for their work and liable for fixing mistakes or defects?
control over the work: does the worker decide how to do the work, subject to specific terms in the contract or agreement?
independence: does the worker operate their own business independently of your client’s business?
If you answers no to some or all of these questions, you should seek further information and advice before hiring, or continuing to treat your workers as contractors. Remember, if you are taking on an apprentice, trainee, labourer or trades assistant, those workers are always employees, never contractors.
If you need any help with classifying employees and/or contractors properly, give our team at SPS Business Consultants a call on ☎️ (03) 9904 9261
When you sell a property, you may be carrying on an enterprise. If you are carrying on an enterprise, you will need to have an Australian business number (ABN) and register for GST – even for one-off transactions.
Below are the things you should consider when selling a property:
if you subdivided land, or acquired new land and built new residential premises. ATO information on GST at settlement will help.
your intent for the property when you first bought it
if your original intent was to develop it for resale at a profit, your activities may be regarded as an enterprise
if your intent changed. For example, you were not able to sell the property so instead you rented it out, there could be a change in creditable purpose.
if the turnover from your property transactions and other transactions are more than the GST registration threshold, you are required to register for GST.
One-off transactions
When you are carrying on an enterprise solely because you sold property as a one-off transaction, you must:
have an ABN and register for GST. You need to lodge activity statements for the periods required.
cancel you ABN and GST registration once your enterprise has ceased.
