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ATO on the warpath

Are you an ATO audit target?

The ATO has announced it’s audit ‘hit list’ for this financial year:

Work-related expenses:

  • motor vehicle expenses for travelling between home and work;
    overnight travel; and
  • the work-related proportion of use for computers, phones and other electronic devices

 

Rental property expenses:

  • excessive deductions being claimed for holiday homes (deductions should be limited to the amount of income earned, or to the number of days actually rented out at a commercial rate);
  • husbands and wives inappropriately splitting rental income and deductions for jointly owned properties; and
  • interest deductions being claimed for the private proportion of loans.

 

Cash economy:

  • the building and construction industry; and
  • the restaurant, café and takeaway industry.

 

Contractors:

  • employers misusing contracting arrangements with the intention of avoiding employment overheads.

 

Motor vehicle data matching

The ATO has announced a new “Motor vehicle data matching program” to collect details of individuals or businesses that have purchased or acquired a vehicle costing $10,000 or more in the 2011/12 and the 2012/13 financial years. It will gather information from every State and Territory vehicle registration authority – around 2.8 million individuals will be matched.

Want to know more? We’re here to answer your questions – contact us on (03) 8888 4000 or info@thepractice.com.au


Employers: Don’t get burnt by FBT

The ATO have announced they are dramatically increasing audits to catch out those employers who are not meeting their Fringe Benefits Tax (FBT) obligations.

Employers must remember that any FBT obligations rest with them, not the employee. So you must assess any benefits you provide to employees which may result in you being liable for FBT.

Common Fringe Benefits include:

  • Motor Vehicles
  • Entertainment and Meals
  • Short Term Loans

 

If you provide any of these to your employees, or any other benefits, you MUST contact us to discuss any potential impacts on you. With careful planning, in many instances we can help you reduce your FBT obligations to nil.

Want to know more? Contact our FBT expert Tim Sherlock on (03) 8888 4036 or info@thepractice.com.au.


ATO super crackdown – child care, building, cleaning, pubs

The ATO will target employer super obligations in the following industries:

  • child care services;
  • building and industrial cleaning; and
  • pubs, bars and taverns.

 

The ATO is currently running an education campaign for business owners in these industries to help them better understand their super obligations. Audits will be conducted from July 2015 for employers who fail to meet super obligations for their employees.

The ATO is also reminding directors of companies that are required to pay Superannuation Guarantee (SG) for their employees, that they may be personally liable for any unpaid or unreported SG Charge liabilities of their companies.

Want to know more? We’re here to answer your questions – contact us on (03) 8888 4000 or info@thepractice.com.au


Construction industry annual payments report

The ATO is writing to businesses in the building and construction industry that have not lodged their ‘Taxable Payments Annual Report’, which was due to be lodged by 21 July 2014.

Each year, businesses in the building and construction industry must complete the Taxable payments annual report to advise the ATO the amount they paid for building and construction services.

What are ‘building and construction services’?
The definition of building and construction services is broad and covers a wide range of occupations and activities. It includes services such as bricklaying, plumbing, etc, however, it also includes some activities that businesses may not be aware of, such as:

  • architectural work (including drafting and design);
  • cable laying;
  • communications construction;
  • decorating (including painting);
  • engineering;
  • installation of hard wired alarm systems;
  • installation of solar devices;
  • landscaping; and
  • project management.

 

Questions? Contact us on (03) 8888 4000 or info@thepractice.com.au


‘Single Touch Payroll’ on the horizon

The government announced on 28 December 2014 that they intend to simplify tax and superannuation reporting obligations through ‘Single Touch Payroll’.

Under Single Touch Payroll, employers’ accounting software will automatically report payroll information to the ATO when employees are paid.

This will eliminate the need for employers to report employee-related Pay As You Go Withholding (PAYGW) in their activity statements throughout the year, and employee payment summaries at the end of the year.

It will also streamline tax file number (TFN) declarations and Super Choice forms by providing a digital channel to simplify the process of bringing on new employees. It may also cut red tape by notifying super funds and government agencies, such as the Department of Human Services (DHS), when an employee ceases employment.

It is intended that Single Touch Payroll will be available from July 2016, with all employers “operating in a Single Touch Payroll environment” by 1 July 2019 (though exemptions may apply in exceptional circumstances).

Note that, to meet their obligations under Single Touch Payroll, employers would be required to use, and if necessary acquire, appropriate payroll software.

The government is yet to make final decisions on the implementation of this proposal, and is currently seeking submissions regarding issues such as transition arrangements and how to minimise implementation and compliance costs.

Want to know more? We’re here to answer your questions – contact us on (03) 8888 4000 or info@thepractice.com.au