Latest News
ATO’s focus on small business
The ATO is ‘detecting and addressing’ recurring errors in specific industries when businesses have a turnover between $1 million and $10 million. These industries include property and construction (including builders, contractors and tradies), and professional, scientific and technical services (including engineering, design, IT and consulting professionals). In these industries, the ATO continues to see recurring […]
ATO reminder: Business expenses that can (and cannot) be claimed
Taxpayers can claim a tax deduction for most business expenses, provided they meet the ATO’s three ‘golden rules’: The expense must be for business use, not for private use. If the expense is for a mix of business and private use, they can only claim the portion that is used for business. They must have […]
Dual cab utes and FBT
The ATO wishes to dispel the ‘common myth’ that dual cab utes are automatically exempt from fringe benefits tax (‘FBT’). If an employer provides dual cab utes to staff to complete their duties and the vehicle is available for personal use, then the benefit may be subject to FBT. By understanding how their employees use […]
ART dismisses argument that medical expenses were deductible
In a recent decision, the Administrative Review Tribunal (‘ART’) held that a taxpayer could not claim a tax deduction for medical expenses incurred by him in relation to his total and permanent disability pension. The taxpayer had been terminated from his employment due to total and permanent disablement (‘TPD’). For the 2024 income year, his […]
ATO warning regarding private use of work vehicles and FBT
Employers that supply work vehicles to their employees need to check how the work vehicles are used and whether any exemptions apply to determine if they attract fringe benefits tax (‘FBT’). FBT generally applies when a work vehicle is made available for private use, even if it is not actually used. Private use includes any […]
Tips to help sole trader clients
The ATO is seeing sole traders make mistakes in the following areas: not reporting all income — this includes income earned outside their business (like a ‘side hustle’), cash jobs, or payments in-kind/barter deals; overclaiming expenses — this includes claiming the portion of an expense related to personal use, or overstating the cost of goods […]
What is a Testamentary Trust – Look Before You Leap
What is a Testamentary Trust Testamentary trusts are formed under the auspices of a valid will or testament rather than other trusts which are ordinarily created during life (inter vivos) under the terms of a trust deed. It is a trust structure that is often used to protect family assets by having greater control […]
Interest Deductibility After Income-Producing Activity Ceases
An issue that sometimes arises for business owners is whether interest expenses incurred on borrowed funds used in a business remain deductible after the business’s income earning activities have ceased. As a general rule, in order for interest expenses to be deductible in the relevant income year, a taxpayer is generally required to demonstrate that […]
2 Minute Quiz – Business Deductions
How well do you know your business deductions? Try these questions to find out! Answers at the bottom of this post. (No peeking!) Question 1 A company’s financial accounts show the following information in relation to its bad debts and doubtful debts for the year: Closing balance for doubtful debts from the previous year: $172,000 […]
Superannuation Work Test Contributions For Over 65s
Whether or not the trustee of a complying superannuation fund can accept member contributions for those aged between 65 and 75 depends on the member satisfying a “work test”. The work test requires a member to have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days […]
Unpacking Statute-Barred Debts
Various tax implications can arise with a statute barred debt. So what is statute barring and when can it be a problem? In simple terms, a statute barred debt is when it has reached a statutory limitation period where it can no longer be legally recovered by creditors. Specifically, each state and territory in […]
Managing Tax Disputes Can Be Like Wrestling With a Superhero
It is sometimes said that a superhero like the DC Comics character Superman can be uninteresting because he is, for all practical purposes, indestructible. Critics have said the knowledge that he will most likely win can make Superman’s adventures monotonous. A similar accusation could be levelled at the Federal Commissioner of Taxation (the flesh […]