As tax time approaches, make sure you’re ready to claim all the deductions you’re entitled to. These include the following:
Travel. You can claim for expenses relating to travel you do for work, but not usually the trip to get to and from work.
Clothing, laundry and dry cleaning. You can claim on the cost of purchasing and cleaning uniforms and other work related clothing. It needs to be clothing specific to your work (such as safety clothing or a shirt with a logo on it) and not just general black pants or a white shirt that matches a work dress code.
If you’ve been watching the news lately, you might have heard that the change in franking credit rules is going to break open the earth and swallow our retirees whole.
Or if you’re listening to the other side of politics, it won’t. So who’s right? Who’s wrong? What’s a franking credit? Let’s start with that. A franking credit is used by the Government to avoid you paying tax twice on dividends from shares. Say you invest in a company like Google. Hang on, this article is about paying tax :). Say you invest in a company like John’s Global Meat Pies. John’s Global Meat Pies pays you $700 in dividends after paying $300 in tax on that amount ($1000 in total).
Overseas business clients may no longer be subject to GST from 1 October 2016.
Overseas businesses supplying Australian businesses don’t need to register for GST if they:
- only make GST-free supplies through an enterprise carried on outside Australia
- have a business presence in Australia of less than 184 days in a 12-month period
- have a GST turnover below the GST registration threshold of A$75,000 (because certain supplies will no longer be included in the GST turnover).
GST-registered importers no longer need to identify the exact amount paid for international transport, insurance and other costs to calculate the value of the taxable importation for GST purposes.
A reminder for those of you in the building and construction industry that paid contractors in 2015-16, your Taxable payments annual report is due 28 August 2016.
Here are four simple tips to get it right:
- Check your contractor’s ABN and GST registration details as you deal with them through the year to make sure you correctly report them. To do this – use the ABN lookup tool or the ATO app. Report each contractor’s ABN, the total GST and gross amount paid to them for the year, in the correct fields.
- Show whole dollar amounts – ignore the cents
- Lodge online – make the process quick and easy this year by lodging online. All you need is an AUSkey and business software that can generate the annual report.
- Tell us if you don’t need to report – if you’re no longer in the building and construction industry or didn’t pay contractors for the year, let us know by completing the simple online form on our website. That way we will know not to contact you further about it.
[et_pb_section admin_label=”section”][et_pb_row admin_label=”row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]
Story: You get a phone call. The caller says they’re from the ATO. They want you to pay a debt (which you know nothing about), or are asking for your personal details.
But it doesn’t seem quite right. Maybe the caller:
- is aggressive
- threatens that if you don’t pay you will be arrested and sent to jail, or
- tries to make you call another number outside normal business hours.
Or maybe you have received an email or SMS offering you a tax refund or asking for personal details, but it just smells wrong.
What to do if you think it is a scam?
REVIEWING YOUR SALARY PACKAGING ARRANGEMENTS
The new fringe benefits tax year starts on 1 April 2016. The following changes will take effect from this date.
Car expense fringe benefits
The rules for individuals claiming car expense deductions have changed.
As a result, if you reimburse expenses relating to an employee’s use of their own car, only two methods will be available to calculate the taxable value of this fringe benefit (when you apply the ‘otherwise deductible’ rule).
The two methods are:
- The log book method
- The cents per kilometre method (a single rate of 66 cents per kilometre now applies).
Meal entertainment benefits
All salary packaged meal entertainment benefits will be reportable. They will also be subject to a separate cap of $5,000. Benefits exceeding this cap will be counted towards an employee’s existing FBT exemption or rebate cap.
Are you SuperStream ready
With only two quarters left until SuperStream becomes mandatory, employers are being urged to cross SuperStream off their ‘to-do’ list ahead of the 30 June 2016 deadline.
It takes a little time to set up, but over a quarter of a million employers who have made the change are already enjoying (on average) a 70% reduction in the time they spend on super. That equates to approximately 1.5 hours each cycle! If you haven’t done so already your options to get ready include:
- upgrading your current payroll software
- using your super fund’s online system
- using a messaging portal
- using a clearing house (like the ATOs free Small business superannuation clearing house).
You can also ask your accountant or bookkeeper for help.
An important part of SuperStream preparation is collecting your employees’ TFNs and their funds’ unique super identifiers (USIs). You then enter it into your system ahead of the next quarterly due date on 28 January. This gives you time to check that things are running smoothly before the deadline.
February fuel tax credit rates change
Fuel tax credit rates change regularly. They also vary depending on when you acquire the fuel, what fuel you use and the activity you use it for.
Fuel tax credit rates are indexed twice a year, in February and August, in line with the consumer price index (CPI). The CPI is released towards the end of January and July, five days before the rates are changed. Fuel tax credit rates will be updated as soon as they become available.
Rates may also change for fuel used in a heavy vehicle for travelling on public roads. This is due to changes to the road user charge which is reviewed annually.
As of Monday 1 February 2016 fuel tax credit rates change due to indexation.
Fuel tax credit rates are indexed in August and February in line with the consumer price index.
You may need to use more than one rate in a BAS period.
Use the Fuel tax credit calculator to help you get your claim right.
For details of the fuel tax credit changes go to ato.gov.au/fueltaxcreditrates
CHANGES TO CAR ALLOWANCES
Claiming work-related car expenses is a common tax-time claim for many taxpayers. In fact, almost 4 million taxpayers claim the deduction each year. There are of course certain rules that must be adhered to in claiming these expenses and these days, the Australian Tax Office takes a close interest in such claims given the cost to the revenue.
The Treasurer announced in the 2015-16 federal budget that the methods used for calculating work-related car expense deductions would be simplified and modernised – in other words, changed.
Currently, taxpayers have an option to use one of four methods to determine their work-related car expense deductions:
- cents per kilometre
- logbook method
- the 12% of original value method, and
- one-third of actual expenses incurred.
Changes to car allowances mean if you are paying your employees a car allowance in excess of 66c per kilometre, you need to withhold tax on the amount you pay over 66c.
If you haven’t been doing this since July 2015, you should begin to withhold tax on the amount you pay over 66c and advise your employees.
What if your employees think that not withholding until now might result in them getting a tax bill?
Depending on the amount you’ve paid them, this shouldn’t have a significant impact on their tax for the year. But you can agree to increase the amount you withhold for the remainder of the financial year to cover the shortfall.
Welcome to Sciacca’s News – July 2015
Happy New Financial Year! Have you got big plans for this new year? More importantly, do you have a plan for how you are going to make it happen?
Remember we’re here to help. If you need advice or someone to run things by, to make sure you’re on the right track, give us a call. This month we’re talking about :
- Why you need a financial advisor
Superannuation, insurance, investments, budgeting… is your mind already wandering and eyes glazing over?
We understand that knowing where and how to invest your money, can be confusing and overwhelming……….
- Retirement – the most important career move you’ll ever make
Heading into retirement and contemplating ending paid work, means you need to rethink the risks in your portfolio.
Are you fearful of retirement? Most of us are very anxious for what retirement means for our lives. The allure of time to spend with your family and freedom from the demanding schedule of work is matched with a new set of responsibilities – that of financial survival as a ‘sole business owner’ to your household.Retirement is a change of career, not an end of a career…………
- July checklist for employers
As an employer you need to:
- provide payment summaries to your employees by 14 July
- lodge your PAYG withholding payment summary annual report
- check you’re using tax tables applying from 1 July 2015…….