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Got an old super fund account you haven’t touched for years? New rules mean “inactive” accounts (ie no contributions or rollovers for 16 months) will lose their insurance coverage from 1 July 2019 – unless you want to keep your insurance and take action now. Low-balance accounts may even be transferred to the ATO for consolidation. While the reforms will undoubtedly benefit many Australians, some members who wish to prevent unwanted action on their account may need to take action. The new laws, that apply to “MySuper” and choice products (but not to SMSF trustees or small APRA funds), [...]

Car expense claims are one of the most popular deductions claimed by individuals at tax time each year, but the ATO says not everyone gets it right. Make sure you know the basic rules for when and how you can make a claim. These rules apply to a car you own or lease that is designed to carry a load of less than one tonne and fewer than nine passengers. Motorcycles, bigger cars and cars hired intermittently (eg a car hired for a week) have different rules. Generally, you can’t deduct costs of travelling between home and your regular [...]

“Gig economy” platforms like Airtasker are allowing Australians to earn some extra cash by completing a staggering variety of odd jobs – everything from gardening to data entry and even standing in line for concert tickets! Here, we explain the tax issues that arise when you earn money performing these “gigs”. It’s important to understand that these platforms are used by everyone from “moonlighters” making some extra money on the side, through to self-employed people running substantial businesses who use these platforms to get new clients. Certain tax issues like GST registration can therefore depend on the person’s particular [...]

Is your company planning to develop software as part of an experimental R&D project? You may qualify for the R&D tax incentive, even if you’re not a software developer but operate in a technology-focused industry such as manufacturing. However, the activities you claim for must genuinely meet the relevant tests – and the ATO says some companies are incorrectly assuming their project qualifies. Make sure you understand the criteria before making an R&D claim. The incentive broadly offers: for companies with turnover below $20 million: a refundable tax offset of 43.5% of eligible R&D expenditure; or for other companies: [...]

The ATO’s business benchmark data is a useful tool for smart business owners. Learn how you can access these benchmarks to judge your business’ performance against industry standards, identify your ATO audit risk and other tax compliance issues, and prompt new thinking about ways to improve your profit margins. This data is available for over 100 industries across categories ranging from accommodation and food to manufacturing, and health care to veterinary services. Naturally, the ATO also uses this data for compliance purposes. By identifying businesses that are “outliers” compared to their industry benchmarks, the ATO is better able to [...]

This year’s federal Budget saw the major parties go head-to-head to ease the cost of living for low and middle-income earners. However, long-term tax policy is a major point of difference, with the Coalition’s plan to flatten tax rates and provide “incentives for working Australians” branded a “ticking debt bomb” by the opposition. Here, we compare their policies in detail. Under the Coalition’s plan, Australians earning under $126,000 will benefit from a boost to the “low and middle income tax offset” (LMITO) with effect from the 2018­–2019 year. This is a lump sum reduction in the individual’s annual tax [...]

SMSFs can be a great investment vehicle for those prepared to get the compliance side of things right. The ATO takes SMSF regulation seriously and has now revealed the top three contraventions it sees among SMSFs. This is a helpful insight into the areas that are frequently tripping up SMSF trustees. The ATO says it will work with cooperative trustees to help them rectify breaches and get their fund back on track. But even with the best intentions, fixing these problems can be expensive, time-consuming and stressful. Our handy breakdown of the top three compliance traps will help you [...]

The 2019 Budget was handed down on Tuesday 2 April by Treasurer Josh Frydenberg a matter of days before Prime Minister Scott Morrison is due to call the next federal election. Thanks to revenue from the lucky rise in commodity prices (coal and iron ore) – and without raising taxes – the Government has undertaken a targeted box-ticking cash splash, benefiting Labor’s base and marginal voters. This is a political handout full of sweeteners designed to send punters to the election (likely 11 or 18 May) on a high. The Budget’s big lure is the chance for taxpayers to [...]

Have you ever taken home an item of your business’ trading stock for your own personal use, or use by your family members? This is common in many businesses such as bakeries, butchers and cafés, but it does have some tax consequences. “Trading stock” means anything that you hold in the business for the purposes of manufacture, sale or exchange. If you use any trading stock for personal use, you need to declare this in your business’ tax return. This is because you are treated as if you sold the trading stock to someone else, and the value of [...]

Millions of Australians are now using the “sharing” economy to earn some extra money on the side. Thanks to smartphones and user-friendly apps, people can easily access sharing services like ride sharing, accommodation sharing and pet minding. The government is concerned that some Australians who receive income from sharing platforms may not be paying the right amount of tax – simply because they are unaware of their tax obligations. In this instalment of our ongoing series on the sharing economy, we focus on your tax obligations when earning money from a short-term residential accommodation sharing platform such as Airbnb. [...]