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On 6 October 2020 as part of the 2020–21 Budget, the government announced that it will target support to businesses and encourage new investment through a loss carry back regime. Eligible corporate entities that previously paid corporate income taxes in a relevant year and have subsequently made taxable losses can claim a refundable tax offset up to the amount of their previous income tax liabilities.   The measure interacts with the government announcement on Jobmaker Plan – temporary full expensing to support investment measure. This will allow new investment to generate significant tax losses which can then be carried back to generate cash refunds for eligible businesses.   Eligible corporate entities with less than $5 billion turnover in a relevant loss year can carry back losses made in the 2019–20, 2020–21 and 2021–22 financial years to a prior financial year’s income tax liability in the 2018–19, 2019–20 and 2020–21 financial years.   The amount of the r...

  Business Support Fund – Tax Consequences   A government payment to assist a business to continue operating is included in assessable income. This will include assistance provided as a one-off lump sum or a series of payments. For businesses operating on:   an accruals accounting method – the income will be derived when the right to the government payment arises a cash accounting method – the income will be derived when the government payment is received.   Generally, you do not have to pay GST on grant funding unless you provide something of value in return for the payment. Providing something of value for the payment can include entering into a binding legal obligation to do something or refrain from doing something in order to receive the payment.   Example – Cash payment for running business   Bharat operates a local café which employs five full time and 10 casual workers. As a result of COVID-19 the café is closed for two months ...

Don’t let these Tax Time myths slow down your return At a time when many people want the tax refund that they are expecting to arrive quickly, the Australian Taxation Office (ATO) is warning people not to get tripped up by tax time myths that slow down returns. Usually, tax returns lodged electronically are processed in less than 2 weeks.   Top tax time myths for 2020   Bank details don’t update themselves   While ATO receive information from banks, this doesn’t extend to updating details for the bank account you nominate to have your refund deposited into. Last year many people in their rush to lodge early forgot to update bank details and delayed their refund.   It’s not okay to double dip   ATO is concerned that some taxpayers may either accidentally or deliberately double dip by claiming their working from home expenses using the all-inclusive shortcut method while also claiming for specific items such as laptops or desks.   It’s important...

Employee Obligations   Employees will receive a notification from their employer that they are receiving the JobKeeper Payment. The majority of employees will need to do nothing further.   Employees in the following circumstances will have additional obligations.   Employees that have multiple employers must notify the employer that is their primary employer. Employees that are not Australian citizens must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee. Employees that are currently in receipt of an income support payment must notify Services Australia of their new income. Background on Jobkeeper Payment for Employees   Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a wage subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 20...

What is a PAYG Instalment?   A PAYG instalment is an estimate only made by the Australian Taxation Office based on your previous years’ assessment and is essentially a prepayment of the tax liability.   The ATO will also determine how frequently you are required to pay these instalment amounts.   How do PAYG instalments affect my Annual Tax Return?   Upon lodgement of your Tax Return , the instalment paid will be credited against your actual tax liability to determine if additional tax is payable or a refund due.   Your PAYG instalment is greater than the actual tax liability After finalising the Annual Tax Return, if it is noted that the actual tax liability is less than the PAYG instalment amount already paid to the ATO for the Financial Year then upon lodgement of the Tax Return, you will be entitled to a refund from the ATO.   PAYG instalment is less than the actual tax liability If the actual tax liability is greater than the PAYG instalment amount...

JobSeeker: how to treat in tax return   JobSeeker payments are taxed.   The ATO will automatically load this information into the ‘government payments and allowances’ section in your tax return, but it will not necessarily be there from July 1.   This means if the information is missing when you do your tax return, you will have to provide this information to your tax agent or wait until the data is available on ATO portal.   “Leaving out income can slow down your return or result in a bill later so it’s definitely best avoided.   JobKeeper: how to treat in tax return   JobKeeper payments are taxed as regular income.   If you have received JobKeeper payments from your employer do not need to do anything different to other “normal” years.   The payments will be included as salary and wages and/or allowances, in your regular income statement, which your employer provides directly to the ATO.   The income statement sent to the ...

JobKeeper – Business monthly declaration If you have enrolled for the JobKeeper Payment and identified your eligible employees, you need to make a business monthly declaration to the ATO. You will be able to do this from the 1st to the 14th day of each month, to receive reimbursements for the payments you have made to your employees in the previous month. For example, the business monthly declaration for reimbursement of JobKeeper payments for the month of May needs to be completed by 14 June. Each month every business enrolled for Job Keeper payment must reconfirm their reported eligible employees. Every business must also provide information regarding their current and projected turnover. This is not a re-test of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme. If your eligible employees change or leave their employment, you will need to notify ATO through your monthly declaration. Conta...

Very often we are asked if meal expenses incurred while driving Uber, Ola, DIDI or using any other ride sourcing platform are deductible. We’ve noticed a spike in inquiries relating to deduction for meal expenses. In most cases, clients tell us that other accountants are claiming meal expenses on GST returns for ride sourcing and have been told by other accountants that these expenses are deductible. There are some expenses that can’t be claimed because they’re personal expenses or not allowed under the law. This includes personal or private expenses, such as meals you purchase while on a break. Next time, if an accountant tells you that meal expenses incurred while ride sourcing are claimable, ask them to show an ATO weblink confirming the same. Contact Expert Tax  on 0449 952 855 or 1300 869 829 for assistance on tax related matters.

Rental and other rental-related income is the full amount of rent and associated payments that you receive, or become entitled to, when you rent out your property, whether it is paid to you or your agent. You must include your share of the full amount of rent you earn in your tax return. What happens if Rental Bond is retained in case of tenant default or damage caused to property by the tenant? You must include rental bond money as income if you become entitled to retain it, for instance, because a tenant defaulted on the rent, or because of damage to your rental property requiring repairs or maintenance. In case of commercial rent, if the landlord becomes entitled to rental bond then the amount will be inclusive of GST (if landlord is registered for GST) and GST liability will arise as a result. What if you received an insurance payout? If you received an insurance payout, there may be situations where the payout needs to be included as income, for example,...

Superannuation guarantee amnesty bill passed Parliament on 24 February 2020 and has now received Royal Assent and is law. This law change provides a number of incentives for employers to pay any unpaid historical superannuation guarantee (SG) amounts relating to the period 1 July 1992 to 31 March 2018. Superannuation guarantee amnesty benefits   Provided superannuation guarantee charge (SGC) relating to the period above is paid during the amnesty period of 24 May 2018 until 6 months after the date of Royal Assent (6 September 2020), eligible employers will receive the following benefits:   The SGC will be deductible The SGC, which is usually non-deductible, is comprised of the following amounts: Ø   The total SG shortfall – that is, the total of the SG shortfalls for each affected employee. Ø   Interest on SG shortfalls – currently 10% per annum on each individual SG shortfall; and Ø   An administration fee – usually $20 pe...

Personal Insurance Need insurance cover to cover yourself and your family members in case of unforeseen circumstances? We have partnered with experienced and qualified insurance brokers to offer you tailor-made insurance policies to provide peace of mind for you and your loved ones. Our insurance offering includes the following insurance types – Life Insurance ·          Financial support for your loved loves in the event of your death. ·          You can choose the level of protection you require. ·          Tailor your plan to suit your personal needs. Total and Permanent Disability Cover ·          Benefit from a lump sum payment if you were to become totally and permanently disabled. ·          Choose the level of protection you want based on your personal ne...

Feeling charitable in the lead up to the festive season?  Whether you’re digging deep to support your favorite charity or dropping five bucks into a donation bucket, hang onto those receipts! You might be able to claim a deduction next tax time. For your donation to be deductible, it must be for $2 or more and made to what’s called a ‘deductible gift recipient’ (DGR). Organizations entitled to receive tax-deductible gifts are called 'deductible gift recipients' (DGRs). You can only claim a tax deduction for gifts or donations to organizations that have DGR status. The person that makes the gift (the donor) is the person that can claim a deduction. What is a DGR? A deductible gift recipient (DGR) is an organization or fund that can receive tax-deductible gifts. Not all charities are DGRs. For example, in recent times crowdfunding campaigns have become a popular way to raise money for charitable causes. However, many of these crowdfunding websites ...