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 […]
The Proportioning Rule and Your SMSF: It’s all About Balance
When calculating a super benefit, it is necessary to identify and determine the value of the various components that make up the benefit. The law around superannuation dictates that the tax-free component and taxable components of a member’s payment must be paid in the same proportion as the tax-free and taxable components of the member’s […]
Retired and Asset Rich But Cash Poor? The Pension Loans Scheme May Help.
To help pensioners who are rich in assets but poor in income, the government launched a version of a commercially available financial product, the reverse mortgage. The government’s answer for pensioners who find themselves in the above situation is its pension loans scheme (PLS), whereby a pensioner can apply for a nontaxable loan using some […]
2 Minute Quiz – Partnerships
How well do you understand the taxation of partnerships? Try these questions to find out. Question 1 Which of the following is the definition of a tax law partnership? An association of persons (other than a company or a limited partnership) carrying on a business in common with a view to profit An association of […]
Plan Ahead: Tip to Better Prepare for Tax Time 2019 With ATO’s myDeductions App
It is highly recommended that you keep receipts for all expenses and possible tax deductions you are considering claiming for you or your business. It is also a good idea to scan and file them electronically so that they are accessible should you need them for audit purposes. If you haven’t used it already, note […]
Are Insurance Payments Tax Deductible?
Are insurance payments tax deductible? As a general guideline, the ATO will allow a deduction for certain insurance premiums if it can be shown that the insurance cover relates to earning assessable income. In other words, life insurance, trauma insurance or critical care insurance are generally out. Income protection insurance is one example of […]
Division 7A Compliance … Are you prepared?
Division 7A is an integrity measure that was designed to prevent companies from making tax-free distributions to shareholders or their associates. This can occur where distributions of profit are disguised as loans or other transactions. This effectively allows the shareholder or their associate to have access to the corporate tax rate. A consequence of […]