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Office Closed for the Week

9th June 2020

Please note that our office is closed this week and re-opens Monday, 15th June.  It will give us an opportunity to do some training & refresh ourselves for the new tax year!

We are now accepting scheduled appointments if required and our doors are open for business.

Your Knowledge June 2020

2nd June 2020

Inside this months Your Knowledge newsletter are a few interesting topics about what is going on around you right now....

Are you a casual employee or are you receiving Job Keeper? if so keep reading as this might apply to you:

The topics include:

1. Have casual workers been granted annual leave? 

2. The ATO Job keeper impact on employee entitlement, The ATO jobkeepers targets & managing your job keeper compliance

3. As of July the Company tax rate will be reduced

If you want to read more click here Your Knowledge June 20.pdf

 

COVID 19 Stimulus & Support Measures

6th April 2020

Download the Guide below and use it as a quick reference to the COVID-19 related tax and financial support that might be available to you. The Government has flagged that more support is coming and we will keep you updated of changes that are likely to impact on you.

 The stimulus and support packages help, but there are gaps and they will not return most adversely impact businesses or people back to their pre-pandemic position. It will all take time. 

While there are many incentives most are not immediate - so hang in there!

Download the guide now: COVID 19 Stimulus & Support Measures Guide

$1,500 JobKeeper Subsidy

30th March 2020

Yesterday, the Government announced the $130 billion JobKeeper payment. The subsidy of $1,500 per fortnight per employee, administered by the ATO, will be paid to businesses that have experienced a downturn of more than 30%. The subsidy is paid in full to the employee. The payments are made by the ATO in arrears to the employer - payments start in May. Please refer and download the latest $1,500 JobKeeper Subsidy factsheet.

New Wage Subsidy

30th March 2020

On 30 March 2020, the Australian Government released further elements to its economic response to the coronavirus (COVID-19), which include:

  • Eligible employers (with turnovers of under $1 billion that have taken a 30% hit and turnovers of over $1 billion that have taken a 50% hit) receiving a $1,500 per fortnight ‘job keeper payment’ before tax for each employee as at 1 March who has either been stood down since that date or will be kept on over the next six months; and
  • An increase to the Centrelink Partner Income Test to $79,000 (from $48,000).

The Government has also announced that foreign investments into Australia will require approval, regardless of value or the nature of the foreign investor.

Please refer to this BDO Tax Technical Update for more detail. 

Office Lock Down

24th March 2020

All our services will  be maintained hopefully with minimal disruption. Technology allows us to continue & the best mode of communication is via email, phone or via our website.  Mobile calls will also be attended to by Joe - please call for any queries or assistance in this difficult time 0402 146 226.

The government (in our case, the Tax Office) will provide relief for any late lodgements, payment concessions and any other reasonable defaults.

Federal and State governments have also put in place "support packages" for individulas and business.  Check details that we have posted and also do you your own research. We know that it may be hard to contact various departments such as Centrelink but keep trying.

stage 2 economic plan

24th March 2020

COVID-19 Stimulus Package Stage 2 (Subject to Pending Legislation)

The Federal Government has announced stage 2 of its economic plan to cushion the economic impact of coronavirus (COVID-19). There are four parts to the economic plan, they are listed below.

To see the more details please click on the ones that interest you:

This material has been produced by the Institute of Public Accountants (IPA) of which Joseph Solano is a member.

Stimulus Package 2

23rd March 2020

The Government yesterday (22 March 2020) released a second, far reaching $66.1 bn stimulus package that boosts income support payments, introduces targeted changes to the superannuation rules, provides cash flow support of up to $100,000 for small business employers, and relaxes corporate insolvency laws. 

For more on this download the following factsheet: Stimulus Package 2.pdf

Your Knowledge March 2020

17th March 2020

Empty restaurants and retail stores were one of the first signs of the devastating impact the coronavirus on Australian business. Within a few months, the virus, now called COVID-19, has gone from being a largely unknown medical condition to one that threatens to impair Australian and global economic growth. We explore the impact on business and the importance of planning for setbacks beyond your control.
Whether it is the coronavirus, fire or flood, the fact is if you are in business long enough you will almost certainly have to deal with an external impact on your business – bushfires, drought, GFC, SARS, 9/11, we’ve seen a few.

The key is to react but not overreact.

Business Continuity planning is essential & protecting your workplace and customers. Click here to read this months Newsletter Your Knowledge March 2020 .pdf to find out more important information to protect your business. 

 

Your Knowledge Feb 2020

11th February 2020

CGT & the family home: expats and foreigners excluded from tax exemption!

Late last year, legislative changes were made that exclude non-residents from accessing the main residence exemption.
The retrospective changes directly impact foreigners and expats whose main residence is in Australia or overseas. We explore the impact here Your Knowledge Feb 2020 pdf.pdf

Also in this months newsletter we find out more about:

Bushfire support and assistance,

Alerts to protect SMSFS from Fraud &

ATO targets 'lifestyle' assets

Click here to read in full Your Knowledge Feb 2020 pdf.pdf

Your Knowledge December 2019

10th December 2019

Below is a summary of whats inside this months newsletter.

Click here to read it in full -----> Dec 19 - Your Knowledge.pdf

1.  Australia embraces Black Friday and cyber Monday!

The Black Friday and Cyber Monday sale concepts have well and truly arrived in Australia with retailers embracing this latest retail event to stimulate what has been an economically lack lustre year.

2.  5 things that will make or break your bussiness this christmas!

The countdown to Christmas is now on and we’re in the midst of the headlong rush to get everything
done and capitalise on any remaining opportunities before the Christmas lull. Busy period or not,
Christmas causes a period of dislocation and volatility for most businesses. This dislocation and
volatility mean that it is not ‘business as usual’ and for many businesses, it is the change that causes the problem.
 
3.  Bushfire relief from ATO obligations!  
 
The ATO has provided relief from lodgement compliance and payment obligations for
those impacted by the bushfires. An automatic two month deferral for activity statements lodgements and payments due has been provided to those in affected postcodes.
 
4. The super guarantee timing trap for employers!
 
Employees with multiple employers can now opt-out of superannuation guarantee from all but one
employer.
 
5.  The super Guarantee timing trap for employers!
 
How employers are being caught out by the timing of superannuation guarantee payments.
 
Click here to find out more about the above Dec 19 - Your Knowledge.pdf

Property Development and Tax

2nd December 2019

Property Development and Tax!

The ATO seems to be always looking over the shoulder of property developers to make sure they are complying with their tax obligations.  It should be noted here that “property developers” can be anyone building 2 or more units for re-sale.The considerations facing the ATO are many and varied, but caninclude topics such as whether an agreement to develop and sell land is a “mere realisation” or a disposal either in the course of abusiness or as part of a profit making undertaking or plan.

A “mere realisation” is a sale on capital account to which the capital gains tax (CGT) rules will generally apply. Landholders will usually seek this treatment if they can access CGT concessions (for example, applying the appropriate CGT discount or the small business CGT concessions) or the property is a pre-CGT asset. A sale that is more than a mere realisation will be on revenue account and the proceeds will generally be assessable as ordinary income.

The two most common scenarios where the proceeds are income are:

1. Where the land is sold in the course of a business or as an incident of business operations, or

2. Where the land has been acquired and sold as part of a profit making undertaking or scheme. Whether a sale is a mere realisation or something moreis determined by examining and weighing the facts and circumstances taken as a whole.

Ask us for links to the above should you want to read more. Some of the readings are very technical in nature.

Do you have Rental Properties?

20th November 2019

Do you have rental properties?

The law about claiming travel expenses for rental properties changed from 1 July 2017. Last year (2018) the Tax Office received more than 70,000 incorrect claims for travel to and from residential rental properties.

If you own a residential rental property you cannot claim deductions for travel expenses even if it is for property inspections or collecting rent.

There are some “special exceptions” and if you wish to discuss please contact our office.

Your Knowledge November 2019

2nd November 2019

Quote of the month: What is the difference between a taxidermist and a tax collector? open to find out Nov 19 - Your Knowledge.pdf

Inside this months 'Your Knowledge' newsletter:

1. Capital Gains and the Family Home: 

The Government has resurrected its plan to remove access to the main residence exemption for non-residents – a move that will
impact on expats and foreign residents.

2. Vacant Land Deduction. Changes hit 'Mum & Dad' property developments:

Legislation that passed through Parliament last month prevents taxpayers from claiming a deduction
for expenses incurred for holding vacant land. The amendments are not only retrospective but go
beyond purely vacant land.

3. Calculating Super Guarantee. The New Rule:
From 1 July 2020, new rules will come into effect to ensure that an employee’s salary sacrifice
contributions cannot be used to reduce the amount of superannuation guarantee (SG) paid by the
employer.
 

4. Can the ATO take money out of your account?

You might have seen the recent spate of media freedom advertisements as part of the Your Right to
Know campaign. The prime-time advertising states that the Australian Tax Office (ATO) can take money
from your account without you knowing. The question is, do you really know what powers the ATO
have?

5. Are you paying your staff correctly? Woolworths $200m Plus Remediation

Woolworths is the latest company facing a fallout from the underpayment of staff. In what is believed
to be the largest remediation of its kind,Woolworths have stated that they have underpaid 5,700
salaried team members with remediation expected to be in the range of $200m to $300m (before tax).

Click here to read more into the above articles Nov 19 - Your Knowledge.pdf

Your Knowledge October 2019

15th October 2019

Super Guarantee Amensty Resurrected!

The Government has resurrected the Superannuation Guarantee (SG) amnesty giving employers that have fallen behind with their SG obligations the ability to “self-correct.”

This time however, the incentive of the amnesty is strengthened by harsh penalties for those that fail to take action.

Find out more here on when it applies & if you qualifiy... Oct 19 - Your Knowledge

Single Touch Payroll

7th October 2019

Are you ready for Single Touch Payroll?

The introduction of STP provides a great incentive for organisations to look at and improve internal processes and potentially review their payroll software for a more compliant reporting model. Greater efficiency through better digital payroll processes and solutions can only be better for your business. Our office can help you review your payroll processes, including your end of year processes to make your transition to STP reporting as smooth as possible.

STP works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.

You will:

  • run your payroll
  • pay your employees as normal
  • give them a payslip.

Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.  Your STP-enabled payroll software will send us a report which includes the information we need from you, such as: salaries and wages, pay as you go (PAYG) withholding and super liability information.

At the end of the financial year you'll need to finalise your STP data. This means you are making a declaration that you have completed your reporting for the financial year. Once you finalise your data, your employees' Income statement in ATO online services will be marked as 'Tax ready'. They, or their registered agent, will use the Income statement to lodge their tax return.

You won't need to provide us with a payment summary annual report for the payments you report through STP.  If you currently lodge an activity statement (eg a BAS with wages data) you will continue to do so.

If you have 19 or fewer employees the Australian Taxation Office (ATO) is showing some patience in allowing a delayed start to STP and being lenient on any errors.  The ATO has made it clear that this “soft approach” will only be for the first year of STP.

For micro employers with one-to-four employees, there are low-cost and no-cost solutions available. You can view the list of registered products at: ato.gov.au/stpsolutions

Employers with 1-4 employees will also have the option for their registered tax or BAS agent to report their STP information quarterly, rather than each time they run payroll. This option will be available until 30 June 2021.

 

Small employers who haven’t yet transitioned to STP can follow these steps: 

  • Visit ato.gov.au/stp for initial information.
  • If you have payroll software, speak to your provider to find out if your product is ready or when it will be.
  • If you don’t have software, choose a product that offers STP. You can ask your registered tax or BAS agent for advice on choosing a product that suits your business needs.
  • Update your payroll software when it’s ready.
  • Start reporting to the ATO through STP.
  • Visit ato.gov.au/stp for information, resources, news and detailed guidelines.

 

Need help?

Business or Hobby?

17th September 2019

Keeping busy — but is it just a hobby, or are you in business?

It is important to understand the differences between a hobby and a business for tax, insurance and legal purposes among other things. For one thing, there will be certain tax and other obligations that start once you are in business. However it’s a myth that there is a dollar threshold to be in a business (some people can have very expensive hobbies).

What matters is whether, as a whole, your activity is “commercial”, with an aim to make a profit. Once you are in business, there are dollar thresholds that can affect what you can claim for tax purposes.

Want to know the difference between a hobby & a business read more here Business or Hobby .pdf

Your Knowledge September 2019

3rd September 2019

Five years ago, the Australian Taxation Office (ATO) offered a penalty amnesty on undisclosed foreign income. Five years on, the ATO has again flagged that underreporting of foreign income is an issue but this time the gloves are off

Click the attachement below if you want to know more about:

  1. How your money is being tracked 
  2. What you need to declare in your tax return
  3. Do I need to declare money from family overseas? 
  4. I have overseas assets that I have not declared
  5. How to repatriate income or assets

CLICK HERE September 2019 - Your Knowledge

Running your business from home?

20th August 2019

Running your business from home?

If your home is your main place of business, you may be able to claim the business portion of some of your expenses such as:

  • electricity
  • cleaning
  • mortgage payments
  • rent payments.

It can be tricky to know what you're entitled to claim, so we've created a fact sheet to help you get your home-based business expenses right.

Our Small business home-based business expenses fact sheet will help you answer common questions about:

  • whether you can claim running expenses or occupancy expenses
  • separating private and business use
  • capital gains tax
  • records you need to keep.

The fact sheet is easy to use - down load it here Home based business expenses

Remember, we can help you with your tax. Ask us any questions!

Your Knowledge August 2019

20th August 2019

The Knowledge - August 2019

Confused over personal income tax changes this financial year?

The recent income tax cuts that passed through Parliament do not mean everyone automatically gets $1,080 back from the Government as soon as they lodge their income tax return. The Australian Taxation Office (ATO) has been inundated with calls from taxpayers wanting to know where their money is and how they can access the $1,080 they now believe is owing to them.

Please click on this August 2019 Your Knowledge.pdf article from the 'Knowledge Shop' for further information.

Claiming your 'Car' as a Deduction

6th August 2019

Claiming your “Car” as a deduction 

If you use your car for work purposes you may be able to submit a claim.

There are a few methods you can use:

Cents per kilometre method: You can claim a maximum of 5,000
business kilometres per car. The rate per kilometre (66 cents
in 2017-18 and 68 cents in 2018-19) takes into account your
car running expenses, including depreciation. You can’t make a
separate claim for depreciation of the car’s value.

You don’t need written evidence, but you must be able to show
how you worked out your business kilometres (for example,
calendar or diary records).

For claims above 5,000 kilometres you must use the logbook
method or actual costs to claim the entire amount.


Logbook method: You can claim the business-use percentage of
each car expense, based on logbook records. You must record:

  • when the logbook period begins and ends
  • the car’s odometer reading at the start and end of the logbook period

Details of each journey including:

  • start date and finishing date
  • odometer readings at the start and end
  • kilometres travelled
  • reason for the journey.

You must keep the logbook for a period (at least 12 continuous
weeks) that is representative of your travel throughout the year.
You can then use this for five years.
Work out the percentage of business travel from your logbook and
use this to claim your business-related car expenses. You can’t
claim capital costs such as the purchase price of the car but you
can claim this as depreciation.

Please contact Joe if you have any questions.

Wages and Your Business

29th July 2019

Wages & Your Business

Under the Fair Work Act (FW Act),  advisers can be held liable for business clients not meeting their obligations.  The following 4 questions can be used as “conversation pieces” either from an adviser or client’s viewpoint.

Question 1: When is it okay to pay below award rates?

Paying less than the modern award is a breach of the FW Act under section 45 while section 550 states that a person who is involved in a breach is deemed to be in the same position as the party that actually breached it.

Question 2: Will all my employee records be checked?

In September 2017, the Fair Work Amendment (Protecting Vulnerable Workers) Act took effect. Although in part squarely aimed at franchisors, it strengthened the Ombudsman’s powers to investigate all employers involved in “cashback” schemes (i.e. those who on face value comply with award rates but deduct or demand employees pay back some of their pay) and significantly increased penalties for giving false or misleading pay slips to employees or knowingly making or keeping false or misleading employee records.

Notably, employers that fail to meet record-keeping or pay slip obligations and can’t give a reasonable excuse now need to disprove wage claims made in a court; in effect, a “reverse onus of proof”.

Question 3: Would I be better off with contractors instead of employees?

A sham contracting arrangement  is when an employer attempts to disguise an employment relationship as an independent contracting arrangement, usually to avoid responsibility for employee entitlements.

“Most employers are looking for ways to contain costs, but questions like, ‘Can I enter a contract that overrides the award?’, ‘Is there a way around the award?’, ‘Do we really have to comply with that?’ or ’Isn’t that just a guideline?’ could flag compliance issues,”

Indeed, under the sham contracting provisions of the FW Act, there are serious penalties for misrepresenting an employee relationship, dismissing or threatening to dismiss an employee so as to engage them as an independent contractor, or knowingly making a false statement to persuade or influence an employee to become a contractor.

Question 4: How can I make someone redundant but avoid unfair dismissal?

If an employee’s dismissal is a genuine redundancy it precludes a claim for unfair dismissal, but with the exception of some small businesses and casual employees, they are entitled to severance pay.

A dismissal is not a genuine redundancy if the employer still needs someone else to do the job; has not consulted with the employee in accordance with an award or registered agreement; or could have reasonably offered the employee alternative work. In such situations, the Fair Work Commission might order reinstatement or compensation.

Clients must understand that compliance with the law is not optional. If a client is clearly in breach of the law it is usually best for advisers to let them know and withdraw further services.

Resources:

Fair Work Ombudsman

https://www.fairwork.gov.au/

ATO website: Employee or contractor

https://www.ato.gov.au/business/employee-or-contractor/

Terms of Business

29th July 2019

Terms of Business

This document together with a Terms of Engagement (ToE) letter and, where applicable, any Authority to Proceed (ATP) letter, forms the agreement between Joseph Solano Tax Accountants and clients. It may seem very much "over the top stuff" but these documents sets out the extent of the work that needs to be done, the way that work will be organised and the fees ultimately that will be charged.  The full text of the Terms of Business is found in "Client Information" section or contact us and we can e-mail you a full copy.