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CLIENT ALERT
TAX NEWS | VIEWS | CLUES
SEPTEMBER 2017
WORK-RELATED EXPENSE CLAIMS UNDER SCRUTINY |
TIP: Ever heard that you can make a standard claim of $300 for work-related expenses even if you don't have evidence? This isn't true! The ATO doesn't ask for receipts up front for claims up to $300, but you must have actually spent what you claim, and be able to show how you worked out your deductions if the ATO asks. |
The ATO's also concerned about people's many incorrect claims for work-related clothing and laundry expenses. In 2014–2015, around 6.3 million people made claims against clothing expenses, but work-related deductions are in fact only available for specific uniforms and protective clothing items, not for everyday clothes you buy, launder and wear for work. |
EMPLOYEE TRAVEL EXPENSE DEDUCTIONS Transport costs for work-related travel may be deductible, but the ATO will consider factors such as:
Accommodation, meal and other incidental expenses are deductible as work-related only if your work has "special demands" or "co-existing work locations" that mean you have to sleep away from home. |
TIP: We're here to help – contact us to find out more about getting your work-related tax deductions right. |
WORKING HOLIDAYMAKERS AND TAX RETURNS FOR 2017
All employers need to include code H on payment summaries of backpacking workers' post-1 January income, even if the employer isn't registered with the ATO as employing working holidaymakers. |
TIP: If only one payment summary is issued, the income needs to be apportioned so the before and after 1 January amounts appear separately on the working holidaymaker's tax return. |
SMALL BUSINESSES Asset write-offs Small businesses with a turnover of less than $10 million can get an immediate deduction for assets that cost up to $20,000 each in their 2016–2017 return. The $20,000 threshold now applies until 30 June 2018. |
TIP: It's important to apply all of the simplified depreciation rules correctly so your business doesn't under-claim for its eligible assets. Talk to us today for more information. |
Tax debts: setting up a payment plan Does your small business have a tax debt? The ATO encourages you to get in touch to set up a payment plan. If the debt is $100,000 or less, you can use the ATO's self-help service to easily arrange paying by instalments. |
TIP: Your business still needs to lodge all of its ongoing activity statements and tax returns on time, even if you have a payment plan or can't pay by the due date. |
FEDERAL COURT RULES ON PAYG AVOIDANCE |
TAX ASSESSMENTS CONFIRMED FOR UNDISCLOSED BUSINESS INCOME The Administrative Appeals Tribunal has ruled that the ATO was correct to issue tax assessments of $3.7 million and penalties of $3.3 million to a business taxpayer that had underreported its income and failed to lodge several years worth of tax returns. The taxpayer, PSI Pty Ltd, argued that it owned and rented out several Sydney properties, but did not engage in other business activities or receive the significant amounts of income that the ATO had assessed to it. The Tribunal upheld the assessments and penalties issued, and allowed the ATO to impose an extra 20% penalty for two of the taxpayer's income years. |
ASIC TAKES ACTION ON SUPER FUND DISCLOSURES In response, seven trustees acted to disclose the required information, five made it easier to find the information online, trustees of two small funds sought relief from the obligations, seven trustees wound up their funds, and two improved their procedures for ensuring they kept disclosed information up to date. |
TIP: Transparency information needs to include details about the fund's governance, executive officer remuneration, fund trust deeds and product disclosure statements, a summary of significant event notices and a summary of how the trustee voted in the last financial year regarding its listed shares. |
COMPANIES SHOULD CONSIDER REPORTING TAX LIABILITIES: AASB |
Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval. |