Reminder the ATO is back to Business-as-usual debt collection.

ATO reminds Business to pay before they disclose their debts. 

(Announcement 6 October 2023).  

The Australian Taxation Office (ATO) is warning businesses to engage with their tax and super obligations to avoid having their debts disclosed to credit reporting agencies.

As the ATO shifts back to business-as-usual debt collection, as of July 2023 it has issued Notices of intent to disclose business tax debts to more than 22,000 businesses with a tax debt of at least $100,000 that is overdue by more than 90 days.

ATO Assistant Commissioner Jillian Kitto said paying or engaging with the ATO is the only way to stop a business’s tax debt becoming visible in credit rating checks. ‘We want to work with businesses to help them get on top of their debts. Anyone with a debt is encouraged to reach out to us as soon as possible,’ Ms Kitto said. 

Need help or advice.

Be proactive contact Blackburn Accounting for your Business accounting matters and Cashflow Management guidance. 

It's out!

Here are highlights from this month's Federal Budget 2024-25 announcements.

Checkout what they mean for you and your Business.

• The instant asset write-off policy has been extended for another year. This allows Businesses with a turnover below $10 million to an immediate deduction of $20,000 per eligible asset.
• The Budget also sets aside $641.4m over the next financial year for ‘targeted support’ to small Business including the above initiative.
• Includes energy bill relief of $325 to eligible small Businesses 
• Investment to deliver and expand the Digital ID System and
• Building cyber resilience, providing free cybertraining for Small Business operators and their staff.
• To help increase the number of Apprentices and Tradies includes funding for 20,000 new fee-free TAFE, VET, and pre-apprentice courses related to the housing sector, and $1.8 million to help fast-track assessment of potential migrants, that may have relevant construction-related qualifications.
• The government has pledged to expand its ‘new energy’ apprenticeship scheme to encourage greater uptake.
• Stage 3 tax-cuts from 1 July this year:Reduce the 19% tax rate to 16%; reduce the 32.5% to 30%; increase the 37% tax threshold from $120,000 to $135,000; increase the 45%  tax threshold from $180,000 to $190,000.

What it is, how it applies and what you need to do as an Employer!

 What is Fringe Benefits Tax?

• Fringe Benefits tax (FBT) is a tax paid by employers on certain benefits provided to their employees, or to their employees’ family or other associates.
• FBT is separate to income tax. It's calculated on the taxable value of the fringe benefit.
• As an employer, you must self-assess your FBT liability for the FBT year (1 April to 31 March). If you have an FBT liability, you must lodge an FBT return and pay the FBT you owe.

 What is a Fringe Benefit?

A fringe benefit is like a payment to an employee, but in a different form to salary or wages.

There are different types of fringe benefits. Examples include:

• allowing an employee to use a work car for private purposes
• car parking
• paying an employee's gym membership
• providing entertainment by way of free tickets to concerts
• reimbursing an expense incurred by an employee, such as school fees
• giving an employee a discounted loan
• giving benefits under a salary sacrifice arrangement with an employee.

Not a Fringe Benefit.

Examples that are not fringe benefits are listed on the ATO website.

Who receives Fringe Benefits?

It's that time of the year again, Tax-Time it's just around the corner.

Don’t put it off or file it in the too hard basket, start now with our,

6 Top Tips!

1. Getting ready is about getting your ‘house’, Business in order. Start by organising your paperwork.  If you have a 'shoe-box' or bottom drawer full of unsorted papers now is the time to start sorting and filing.   

2. A stress-less tax time is all about good record keeping. You need to account for every dollar that comes in and out of your Business! Make sure you have the ‘evidence’ to back your claims!

3. Missing copies of claimable receipts or expenses records, follow-up now to avoid panic later.     

4. Working from home, remote flexi arrangements, keep copies and record any related expenses for 'end of year' deductible claims. 

5. Have you checked if there are any Government incentives and initiatives for small Business?  Have you received any concessions? If so, are there reportable implications!

6. Do you have any questions regarding your Taxation obligations, not sure what a legitimate claimable expense is or are needing help with bookkeeping, payroll systems and processes! Contact Blackburn Accounting, we are 'Your Family Business Specialists'.

• Taxpayers are encouraged to have all their ‘paperwork’ before lodging their returns. This helps avoid delays with missing information, for example, where there are multiple sources of income. 

• reminder that the income tax cuts, which started on 1 July 2024, don't apply to the 2023-24 tax return 

• the importance of keeping accurate records and having records to substantiate any claims 

• that there is updated web content for the Small business energy incentive including eligibility requirements and how to claim 

• for an employer with a mixture of both closely held payees and arms-length employees, the due date for end-of-year STP finalisation for closely held payees is 30 September each year. All other employees are due 14 July each year.

  If you have 20 or more employees the final date to finalise is 14 July

• that super guarantee contributions need to be paid in full, to the right fund, by 28 July 
• June 2024 income tax installments are due on 28 July

There’s more and the ATO website provides regular updates. 

Tax matters can be complex and understanding what’s within the tax laws can be confusing. If that’s you, you are not alone.  

If you need help, contact Blackburn Accounting. We are here ready to make Tax Time less stressful and minimise your tax contributions within the ‘rules’. 

On 9 May 2023, as part of the 2023–24 Budget, the Australian Government announced it will improve cash flow and reduce compliance for small businesses by temporarily increasing the instant asset write-off threshold to $20,000, from 1 July 2023 until 30 June 2024. 

This measure is not yet law.

Small Businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024.

 The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

 Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.

Individual income tax rates and threshold changes

On 25 January 2024, the government announced proposed changes to Individual income tax rates and thresholds from 1 July 2024. These changes are not yet law.

From 1 July 2024, the proposed tax cuts will: 

• reduce the 19 per cent tax rate to 16 per cent
• reduce the 32.5 per cent tax rate to 30 per cent
• increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000
• increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.

For more information see Tax cuts to help with the cost of living | Treasury.gov.au

The ATO is warning Business that pay contractors to provide certain services to lodge their taxable payments report (TPAR) for 2023.

The TPAR is used to report the payments made during the financial year to subcontractors or contractors. It is due on 28 August each year.

 Be aware, from 22 March 2024, the ATO will apply penalties to those Businesses that haven’t lodged their TPAR from 2023 or previous years or have received three reminder letters about overdue TPAR.

If this is you, act now to avoid paying penalties.

Other – Outstanding Debts

From January 2024, the ATO has an external debt collection agency actioning tax cases they have referred.

This will apply to Taxpayers who haven’t responded to previous ATO contacts attempts or referral warning letters and are not engaged in debt repayment.

Don’t wait, contact the ATO or speak with our team at Blackburn Accounting asap.

Unsure of your responsibilities or what to do?

Need help!

Contact Blackburn Accounting we understand taxation matters,

or contact the ATO directly or check their website for further information. 

Be prepared! 

•  If you are a not-for-profit Organisation, be prepared for new reporting requirements to maintain your tax-exempt status.

The ATO has announced this change, which is expected to affect a range of Organisations, from small sporting clubs to major sporting groups, cultural, educational and community and health providers.

• From July 1, not-for-profits claiming exempt status will need to fill out an online questionnaire on the tax office website. The questions are based on the rules for each of the eight categories of exemption.

 Need help with understanding these requirements! Contact Blackburn Accounting, we can help you navigate the changes.

The ATO has registered three data-matching notices on 26 August 2024 for compliance related purposes:

• Notice of a lifestyle assets: The ATO will acquire lifestyle assets data from insurance providers for 2023-24 through to 2025-26 for specified classes of assets, where the relevant asset value is equal to or exceeds the nominated thresholds. The data items include client identification and policy details. 

• Notice of a Property management: The ATO will acquire property management data from property management software companies for 2018-19 through to 2025-26. The data items include property owner identification and property transaction details. 

• Notice of an Officeholder: The ATO will acquire officeholder data from ASIC, the ORIC, the ACNC, and ABRS for 2023-24 through to 2026-27. The data items include name, contact details, date of birth, ABN, organisation details, state of incorporation, officeholder type, including officeholder role start and end dates. 

• ATO ramps up warnings on $50b in tax debts. 

This warning from the new Tax Commissioner as the ATO chases $50 billion in outstanding debts, claiming increasing numbers of Australian small Businesses operators are falling behind on tax and superannuation obligations. 

• At a recent small Business summit in Sydney the Commissioner said ‘it’s critical that all employers, big and small, keep on top of their obligations to their employers first and foremost, as well as their obligation to government in respect to GST, income tax and other taxes’. 
• Previously, in November, the ATO warned Business to stop using unpaid tax and superannuation liabilities to prop up their cash flow, stressing its debt book was not a bank.  

If these matters concern you, act now, heed the warnings!  

Need help? contact Blackburn Accounting, we are experts in taxation matters.

• Tax Debts can affect your credit ratings 

Disclosure of Business Tax Debts: 

Be aware that in certain circumstance the ATO may disclose your debt information to credit reporting bureaus (also known as credit reporting agencies).

The ATO lists a number of criteria where they may report your Business tax debt. These are provided on the ATO website.

 Note: It will not report your debt information to credit reporting bureaus (CRBs) if you are already engaged with them to manage your tax debts and may also decide not to report your tax debt information if you are experiencing exceptional circumstances.

You can find full details on the ATO website.

More from the ATO

The Tax Office is taking compliance seriously. 

This recent message from the Tax Office highlights the need for Insurance brokers to provide details of customers with high-value assets. If you have any of these, luxury vehicles, fine art, aircraft or motorhomes the ATO is keen to know! 

And Employers have been put on notice to ensure compulsory superannuation payments are on time as new details emerge about the rollout of ‘payday super’. The ATO has released a Fact Sheet targeting employers and employees to explain how the system will work when changes kick in on July 1, 2026. More about this to come! 

If this information raises any questions, contact Blackburn Accounting. We are your family Business specialists, available to advise on all your Taxation and Accounting matters.  

Planning is at the heart of achieving the best results and outcomes whatever task, activity or goal you are pursuing!

Simply put, planning is deciding in advance what to do, how to do it, when and who should do it! 

So, when it comes to managing your Business and personal financial affairs and tax obligations, doesn’t it make sound business sense to adopt a ‘tax planning’ strategy. If you are one of the smart operators, you have answered Yes!

Tell me more!

Tax planning is:

• the process of analysing financial affairs from a taxation perspective, with the aim to achieve tax efficiency. That means arranging your affairs, (your financial plan) and functioning to keep your tax to a minimum within the intent of tax laws. Be aware of tax schemes outside the bounds of the law will attract ATO attention.
• an important process that benefits Businesses to plan for their tax requirements. For example, by using deductions to reduce the total taxable income, such as structuring salaries and appropriate business planning.
• proactive planning and structuring all about flexibility, whether you are an existing Business, starting new, thinking retirement, or overseas opportunities. The right fit, structure and ownership model influence many areas, including tax planning and regulatory compliance, asset protection, wealth creation through business, growth and succession.
• compliance with statutory and regulatory reporting requirements.

What is the ATO looking at in 2024! 

The Australian Taxation Office (ATO) has announced it will be taking a close look at three common errors being made by taxpayers:

• Incorrectly claiming work-related expenses
• Inflating claims for rental properties
• Failing to include all income when lodging.

According to the ATO assistant Commissioner ‘the ATO is focused on supporting taxpayers to get their lodgement right the first time’. The above areas are where mistakes are most likely to occur, genuine errors but also sometimes deliberate. Taxpayers are being encouraged to get it right the first time.

• Work-related expenses

Last year, the ATO revised the fixed rate method of calculating a working-from-home deduction to broaden what is included, increase the rate, and adjust the records taxpayers need to keep.These changes are now in full effect this financial year, meaning you must have comprehensive records to substantiate your claims as you would for any other deduction. Important care needs to be taken as other home-related deductions such as internet expenses cannot be claimed if you choose to use the working-from-home deduction option.

If you are one of the many Taxpayers hoping for a tax refund it is crucial to submit your return ‘right’!

That is, submit it with all the necessary supporting documentation. This step can save you and the ATO time and effort.

And with Tax Time fast approaching,

• it is a timely reminder to start now and get your ‘paperwork in order’.  
• Also, make sure you have all the ‘evidence’, such as receipts, to substantiate your claims for deductions.  This applies to all claims.
• Be aware, the ATO recently announced it is putting the microscope on tax deductions. Remote workers, landlords and workers taking a liberal approach when claiming travel expenses can expect scrutiny as part of a compliance crackdown. 
• Have a job second that generates income remember to declare it! Freelancers, Influencers are also on the ATO's radar. 
• Taxpayers, those ‘work-from-homers' are reminded of the changes to the generous tax concessions offered during the pandemic. Changes, effective from March 1 this year. Anyone making these claims must now prove how much time they spent working from home and what were actual work expenses, not to be confused with household expenses.

 To claim or not to claim! 

It’s important to know what a legitimate claim is and isn’t and that can be confusing. Avoid mistakes, if you need advice contact Blackburn Accounting, we are experienced and available to help you maximise your return within the ATO guidelines.   

With costs of living spiraling what better way to add to your cashflow than with a tax refund cheque! 

The following tips will help guide you when preparing this year's tax return, whether you or a Professional are lodging it.

1. Get it Right the first time

2. Support deductions with evidence

3. Know what is ‘claimable’

1.Getting it ‘right’ the first time saves both you and the ATO time and effort. Make sure your end of year Income Statement is complete with all relevant facts. Don’t guess vital information and avoid submitting incorrect or misleading data. Mistakes can cause delays in processing, there is potential for penalties and can slow down receiving a refund if due.

2.Support your deductions with evidence. If you are claiming any expenses, such as ‘remote’ or working from home costs be prepared to provide proof, (receipts/ documents) to support eligibility. All deductions require evidence to back a claim.

3.Know what is claimable. Know what you are entitled to claim! For example, work-related education and training and donations to charitable organisations. Also, subscriptions, union and membership fees if they are work related. But remember if your company pays for them, you are not entitled to claim the cost.

Call on an expert to help you get the most out of your hard work and tax dollar!

Contact Blackburn Accounting, we tick all the boxes when it comes to tax matters.

We will work closely with you to help avoid any mistakes, to stay in compliance with tax laws and make sure you claim all the deductions you are entitled to.  Don't delay, contact us now to make your appointment.