Tag: tax

meeting

ATO issues ‘good governance’ checklist for NFPs

Posted on | by Allan Hall

The Tax Office has reminded not-for-profit organisations to check that tax and super obligations are being met effectively to uphold good governance.

Background

It’s important that your NFP organisation has good governance and you are meeting your tax and super obligations. You need to check that you continue to be entitled to:

  • deductible gift recipient (DGR) endorsement
  • income tax exemption
  • other tax concessions.

To do this, you should complete a self-review of your NFP every 12 months and when your organisation makes changes to its governing rules or structure and activities.

The checklist and worksheets below will help you complete your self-review. You may need to complete more than one worksheet depending on the entitlements you are claiming.

You must also:

If you don’t notify the ATO of changes to your eligibility or registration details, penalties or a referral to prosecution may apply.

Not-for-profit good governance checklist

All NFPs should complete the self-governance checklist. This will help you:

Eligibility to income tax exemption

From 1 July 2023, non-charitable NFPs with an active ABN need to lodge an annual self-review return to confirm their eligibility to self-assess as income tax exempt.

NFPs that self-assess as income tax exempt, can use the questions in the ATO’s self-review guide to conduct an early review. This can be done before the NFP-self-review return is available on 1 July.

Charitable NFPs endorsed as a tax concession charity (TCC), must self-review TCC endorsement annually, and whenever there is a change in the charity’s structure, purposes or operations.

Charities are not required to lodge the NFP self-review return with the Tax office.

The following worksheet will help charities review their TCC endorsement:

Deductible gift recipient (DGR) endorsement worksheets

The following worksheets will help you to work out whether your NFP organisation is still entitled to endorsement as a DGR.

Select the worksheet that applies to your organisation:

CONTACT ALLAN HALL BUSINESS ADVISORS

, , , , , , , ,
small business owner

ATO focus areas for small business

Posted on | by Allan Hall

The ATO reveals what they’re focusing on for small business and how to get it right.

The ATO has published their focus areas for small business. It shows small business owners the current risks and behaviours attracting the ATO’s attention.

The ATO actively detects, treats and addresses concerning behaviours to ensure all small businesses can operate on a level playing field. Their 3 key focus areas include:

  • business income is not personal income
  • deductions and concessions
  • operating outside the system.

The ATO will continue to publish new focus areas quarterly. By being transparent about what attracts their attention, they want to ensure small businesses get it right from the start.

Use the ATO’s focus areas for small business as a guide for conversations to help get your tax right.

Business owners are also encouraged to visit good business habits and Essentials to strengthen your small business, the ATO’s online learning site that offers over 30 free, self-paced courses.

CONTACT ALLAN HALL BUSINESS ADVISORS

Related reading

Audit Insurance
, , , , , , ,

empty property

Victoria Vacant Residential Property Declarations due Jan 2025

Posted on | by Allan Hall

Important: Victoria Vacant Residential Property Declarations Due by 15 January 2025

The Victorian State Revenue Office (SRO) requires all owners of potentially vacant residential properties to submit a vacant property declaration by 15 January 2025.

Failure to comply may result in additional Vacant Residential Land Tax (VRLT) penalties, which will be charged on top of existing land tax obligations.

Key Details:

  • Vacant Residential Land Tax (VRLT): From 2025, properties with dwellings deemed vacant are subject to VRLT. From 2026 onward, vacant land without a dwelling will also be taxed.
  • Exemptions for Holiday Homes: Owners may claim an exemption if the property is used for at least four weeks per calendar year. This exemption is not automatic; owners must explicitly apply.
  • Building or Renovating: There is a two-year exemption period for properties undergoing construction or significant renovation.
  • Escalating Rates: The VRLT starts at 1% of the Capital Improved Value in the first year and increases to 2% in the second year and 3% in the third year if the property remains vacant.
  • Strict Enforcement: The SRO Victoria applies these regulations rigorously. Retroactive adjustments or penalty waivers are generally not granted.

Please note that a signed authorisation form is necessary for us to act on your behalf in dealings with SRO Victoria. Read more »

To avoid penalties and ensure compliance, please make your vacant property declaration before 15 January 2025.

If you have any questions or need further guidance, we encourage you to seek professional advice promptly.

CONTACT ALLAN HALL BUSINESS ADVISORS

, , , ,
super

ATO Recovers Unpaid Super as part of Employer Compliance

Posted on | by Allan Hall

ATO highlights of 2023–24 year

Highlights of super guarantee (SG) annual employer compliance results for 2023–24.

The ATO’s report underscores their commitment to collecting employees’ superannuation entitlements by ensuring employers meet their SG obligations. It also highlights the significant impact of compliance activities and employer engagement in recovering unpaid superannuation for employees.

Highlights of the 2023–24 financial year are:

  • Employers are paying more than 92.4% of the SG they are required to, without ATO intervention
  • A total of $1.91 billion in superannuation guarantee charge (SGC) liabilities was collected through ATO compliance, proactive reminders and prompts, and employer voluntary disclosures of unpaid SG, for over 1.13 million employees
  • $932 million was distributed to employee funds and individuals from liabilities raised for current and prior financial years, for 797,000 employees
  • Approximately 23,600 SG cases were finalised, resulting in $659 million SGC liabilities and $300 million in Part 7 penalties being raised
  • 167,000 employers received proactive ATO actions including reminders and prompts to check their obligations, raising $240 million in SGC liabilities:
    • 100,000 reminders to employers
    • 67,000 prompts to employers
  • Employers made voluntary disclosures of unpaid super, resulting in around $539 million in SGC liabilities being raised.

It is best to take swift action on an outstanding tax debt

For those unable to pay their full obligations, payment plans can be set up through the ATO’s online services. It is important to note that taxpayers with debts under $200,000 can request these arrangements online through their tax agent or independently.

In cases of genuine financial hardship, there are additional options available, including deferred payments and interest remissions. However, address any outstanding issues proactively to avoid further penalties.

The ATO has also begun a phone campaign to recover debts

Remain cautious and never disclose personal information, such as tax file numbers or credit card details, over the phone. Always request a call reference and independently contact the ATO using a publicly listed number for verification.

If you have any concerns regarding the legitimacy of ATO communications, contact Allan Hall Business Advisors. Our team is here to help you navigate these changes and ensure that your business remains compliant with the latest tax obligations.

For more information, or if you have concerns about unpaid tax, please contact Allan Hall Business Advisors.

CONTACT ALLAN HALL BUSINESS ADVISORS

Related reading

, , , , , , ,
managing debt

Updated ATO approach to Unpaid Tax and Super obligations

Posted on | by Allan Hall

Revised approach targets businesses failing to respond to unpaid tax and Employer Superannuation obligations, plus Individuals with unpaid taxes.

Key points

  • Intensified focus on businesses that ignore unpaid tax and employer superannuation obligations
  • Stricter actions for businesses and individuals not responding to reminders, including SMS and letters
  • Prompt action urged to avoid penalties.

The ATO has emphasised that businesses and individuals failing to meet their tax obligations not only jeopardise their own financial health but also pose risks to other small businesses and employees.

As a result, the ATO is implementing a more targeted strategy aimed at businesses that refuse to respond or set up payment plans.

Key Changes to ATO Debt Collection

The ATO’s revised approach includes:

  • Director Penalty Notices (DPNs): Directors of businesses with outstanding Goods and Services Tax (GST), Pay As You Go (PAYG) withholding, or superannuation guarantee charge (SGC) obligations who fail to engage will face quicker action, including the issuance of DPNs. Directors of multiple companies may receive DPNs that cover all related entities.
  • Garnishee Notices: The ATO may issue garnishee notices to financial institutions, employers or other businesses that hold funds for non-compliant companies or individuals.
  • Engaging External Debt Collection Agencies: From January 2024, the ATO has engaged Recoveries Corp to assist in the collection of overdue debts. Anyone who receives a call from debt collectors are urged to remain vigilant and verify the authenticity of the communication.

It is best to take swift action on an outstanding tax debt. For those unable to pay their full obligations, payment plans can be set up through the ATO’s online services. It is important to note that taxpayers with debts under $200,000 can request these arrangements online through their tax agent or independently.

In cases of genuine financial hardship, there are additional options available, including deferred payments and interest remissions. However, address any outstanding issues proactively to avoid further penalties.

The ATO has also begun a phone campaign to recover debts.

Remain cautious and never disclose personal information, such as tax file numbers or credit card details, over the phone. Always request a call reference and independently contact the ATO using a publicly listed number for verification.

If you have any concerns regarding the legitimacy of ATO communications, contact Allan Hall Business Advisors. Our team is here to help you navigate these changes and ensure that your business remains compliant with the latest tax obligations.

For more information, or if you have concerns about unpaid tax, please contact Allan Hall Business Advisors.

CONTACT ALLAN HALL BUSINESS ADVISORS

Further reading

  1. ATO changing approach to collecting unpaid tax and super »
  2. Find out what happens if you don’t pay your ATO debt »
  3. Director penalties »
, , , , , , ,
shares

Share investing versus share trading

Posted on | by Allan Hall

Understanding Share Investing vs Share Trading: A Guide to ATO Classifications

Key tax differences between share investors and traders explained

A commonly asked question we receive at Allan Hall is how the ATO classifies a share investor vs a share trader.

Typically clients make a profit and they want to be assessed as an ‘investor’ so that the capital gain is taxed with any applicable discounts. Conversely if they incur a loss we receive questions as to whether they are classified as a ‘trader’ so that the losses can be deducted against other income they have earned.

Tax treatment

If you hold shares as an investor:

  1. your shares are assets and are subject to capital gains tax when you sell them
  2. your costs are taken into account at the time you sell your shares
  3. if you have a capital loss you can use it to offset capital gains but not to offset income from other sources
  4. income is earned from dividends and similar receipts.

If you are a share trader:

  1. your shares are treated like trading stock in the ordinary course of a business
  2. your gains are treated as ordinary income
  3. your losses and costs are treated as deductible expenses in the year they are incurred.

How to determine if you are a share trader

Determining if you are a share trader is the same as determining whether your activities are considered to be carrying on a business for tax purposes.

Under tax law, a business includes ‘any profession, trade, employment, vocation or calling, but does not include occupation as an employee’.

To determine whether you are a share trader or a business of trading shares, the following factors have been taken into account in court cases:

  1. the nature and purpose of your activities – typically the ATO wants to see a business plan that details the intention to make a profit and the ways this would be achieved
  2. the repetition, volume and regularity of your activities – the higher the volume the more likely you are carrying on a business
  3. whether your activities are organised in a business-like way – advice received, company analysis methodology, record keeping etc  
  4. the amount of capital invested

The above is a brief overview of the issues involved. Should you require further advice please contact your Allan Hall advisor.

CONTACT ALLAN HALL BUSINESS ADVISORS

, , , , , , ,
house key

Landlords targeted in expanded ATO crackdown

Posted on | by Allan Hall

ATO Expands Property Management Data Matching Program to Strengthen Tax Compliance

The Australian Taxation Office (ATO) is expanding its Property Management Data Matching Program as part of its ongoing commitment to enhance tax compliance.

This program plays a critical role in identifying and addressing potential discrepancies in rental income reporting, particularly within the property management sector.

Key points

  • Expansion of Data Matching Program: The ATO has expanded its program to better track rental income reporting and ensure tax compliance within the property management sector
  • Enhanced Data Collection: The program now collects more detailed rental data, cross-referencing it with ATO records to identify under-reporting or non-compliance
  • Focus on Compliance: Property owners and managers are advised to maintain accurate records, as the ATO’s enhanced capabilities increase the likelihood of detecting discrepancies.

The Property Management Data Matching Program enables the ATO to collect and analyse a wide range of data from property management agencies across Australia. This includes detailed information on rental income, property expenses and other financial activities related to investment properties. The data collected is cross-referenced with other ATO records to identify cases of under-reporting or non-compliance with tax obligations.

Objective and Scope

The primary objective of the expanded program is to ensure that all property owners and managers accurately report their income and meet their tax obligations. By gathering data from property management software, rental bond authorities and other relevant sources, the ATO can detect inconsistencies between reported income and actual rental earnings. This helps to identify individuals and entities who may be attempting to under-report their income or avoid their tax responsibilities.

Implications for Property Owners and Managers

The program covers a broad spectrum of rental properties, including residential, commercial and short-term accommodations.

Property owners and managers are advised to ensure that their records are accurate and up to date. The ATO’s expanded data matching capabilities mean that discrepancies in rental income reporting are more likely to be detected, leading to potential audits, penalties or other compliance actions.

By leveraging advanced data matching technology, the ATO aims to ensure that all taxpayers meet their obligations. Read more »

CONTACT ALLAN HALL BUSINESS ADVISORS

, , , , , , ,
2024 EMEA Conference Sofia

Alliott Global EMEA Conference in Sofia

Posted on | by Allan Hall

Scott Jago recently returned from the Alliott Global Alliance’s EMEA Regional Conference held in Sofia, Bulgaria.

The event featured panel discussions and workshops on insightful topics in the legal and accounting industries, such as the impact of AI and cybersecurity, ESG compliance, the digital economy and leadership development. 

Representing Allan Hall, and as one of the 85 delegates from 54 firms across 30 countries, Scott attended in a dual role as both the APAC Chair and Alliott Global Board member. His participation aimed to gain deeper insights into international tax and business-related practices that would benefit Allan Hall’s clients operating on both a global scale and closer to home. 

The conference also marked the launch of AGAOne, Alliott Global Alliance’s digital collaborative platform. Tech partner LexRing demonstrated how it can enhance information and opportunities between member firms. It incorporates a full-scale directory of AGA firms globally and their specialist fields, amongst other items.    

The opportunity to connect with professionals from diverse backgrounds in such a historic city added a unique and enjoyable dimension to the conference. Allan Hall is now looking forward to the Alliott Global Alliance worldwide conference in Vietnam, scheduled for 13-17 November 2024.

For more information regarding our Alliott Global Alliance, please visit Global Alliance or contact us.

CONTACT ALLAN HALL INTERNATIONAL SERVICES

, , , , , , ,
car buying private or business

Changes to car thresholds from 1 July

Posted on | by Allan Hall

The following car threshold amounts will apply for the 2024–25 financial year.

Income tax

  • The car limit for 2024–25 is $69,674. This is the highest value you can use to calculate depreciation on a car where both of the following apply:
    • you use the car for business purposes
    • you first use or lease the car in the 2024–25 income year.
  • As a business owner, you can claim a tax deduction for expenses for motor vehicles you use for business purposes.
  • If you use a motor vehicle for both business and private purposes, you can only claim a deduction for the business part. You must be able to show the percentage you claim as business use and have records to support your claim.

Goods and services tax (GST)

  • If you buy a car and the price is more than the car limit, the maximum GST credit you can claim (except in certain circumstances) is one-eleventh of the car limit. For the 2024–25 income year, the maximum GST credit you can claim is $6,334 (that is, 1/11 × $69,674).
  • You can’t claim a GST credit for any luxury car tax you pay when you buy a luxury car, even if you use it for business purposes.

Luxury car tax (LCT)

  • The LCT threshold for 2024–25 is:
    • $91,387 for fuel-efficient vehicles. This is in line with an increase to the motor-vehicle purchase sub-group of the Consumer Price Index (CPI)
    • $80,567 for all other luxury vehicles, in line with an increase in the ‘All Groups’ CPI.

If you’re looking to buy a luxury car, remember to be cautious of those who offer to buy one from a dealer on your behalf at a discount. This may be a scheme to evade LCT. You may be at risk if they don’t have the right insurance or if the car is damaged or defective.

To find out more about LCT, including when you need to apply it and what’s included in the LCT value of a car, visit the Luxury car tax page on the ATO’s website.

CONTACT ALLAN HALL BUSINESS ADVISORS

, , , , , , , ,