Astute Accountants

Diane Wilson — Sun, 08 Apr 2012 02:20:42 +0000

The Good News

Small business concessions: changes to simpler depreciation rules apply from 2012-13

From 2012-13:

the small business instant asset write-off threshold has been increased from $1,000 to $6,500
the long-life small business pool and the general small business pool have been consolidated into a single pool to be written off at one rate
small businesses can claim an accelerated initial deduction for motor vehicles acquired in 2012-13 and subsequent years.

These amendments only apply to small businesses that have an aggregated turnover of less than $2 million. Aggregated turnover includes the annual turnover of the small business and the annual turnovers of any connected or affiliated businesses.

The Bad News

Small business concessions: removal of the entrepreneur’s tax offset from 2012-13

From 2012-13, the entrepreneur’s tax offset can no longer be claimed.

The entrepreneur’s tax offset may still be applied to assessments for applicable income years up to and including 2011-12.

& The Ugly News

Private health insurance and Medicare levy surcharge change

The government has introduced changes to the private health insurance rebate and the Medicare levy surcharge. From 1 July 2012, the private health insurance rebate and the Medicare levy surcharge will be income tested against three new income tier thresholds.

Higher income earners will receive less private health insurance rebate or, if they do not have the appropriate level of private patient hospital cover, the Medicare levy surcharge may increase.

The ATO will determine the amount of your private health insurance rebate entitlement when you lodge your income tax return. This may result in a refund or a liability for you.

The ATO is looking hard and long at the “cash economy”

Diane Wilson — Fri, 30 Mar 2012 10:55:24 +0000

The Tax Office will be making it harder for people in business who deliberately use cash transactions to hide their income and to evade their tax obligations.

Strategies used by the Tax Office to tackle the cash economy include the publication of benchmarks, educating the community, acting on information from the community from suspected tax evasion, and the use of data matching to highlight discrepancies

We summarise below some of the Data Matching Strategies being implemented

Credit and Debit Card data matching

The ATO obtains data from banks which identifies credit and debit card sales being made by Australian businesses. This data is matched against taxpayer records to identify those participating in the cash economy, and who are potentially skimming some or all of their cash takings or in other ways not reporting all of their income.

The credit and debit card data-matching program identifies transactions conducted for all merchants with a turnover of less than $10 million in the 2010-2011 financial year.

The bank data is then used to identify businesses that:

are not reporting any or all of their income
may be running a part of their normal business activities off the books or operating underground by avoiding their obligations to register and lodge returns

Motor Vehicle data matching

Data is collected from the state and territory motor vehicle registering bodies. This data is then matched against taxpayer records to identify those participating in the cash economy, and who may not be declaring all their income or deliberately avoiding their tax obligations.

The motor vehicle data-matching program identifies all motor vehicles sold, transferred or newly registered in the 2010-11 financial year where the transfer and/or market value is $10,000 or greater.

This data is then used to

identify taxpayers whose expenditure is in excess of their reported income
identify businesses that sell vehicles and do not report, or under-report those sales
help address potential non-compliance in the following areas:income tax, superannuation, goods and services, tax, fringe benefits tax and luxury car tax.

Online Selling data matching

Data obtained from eBay Australia and Trading Post Australia will identify members of online selling sites who are involved in selling goods and services of a total value greater than $20,000 in any of the past three financial years – 2007-08, 2008-09 and 2009-10.

This data is then used to:

identify individuals and businesses that don’t report or under report their sales
identify individuals and businesses that operate ‘off the books’ and avoid their obligations by not registering, lodging returns or making payments
identify individuals and businesses who are participating in the cash economy, are non-compliant with registration requirements, are not reporting or under reporting sales and who are not meeting their lodgement and payment obligations under tax law.

Share Market Transactions data matching

Data is obtained from ASX Limited, Computershare Limited, Link Market Services Limited, Advanced Share Registry Services Ltd and Registries Limited.

This data is then used to :

catalogue the external data holdings of the key organisations associated with share market activities
assess the correctness of lodged income tax returns in relation to capital gains and income from the disposal/sale of shares
ensure those entities that should be registered for goods and services tax are registered
identify income tax returns that should have been lodged to have tax assessed on capital gains or income from share transactions.

Economic Stimulus Payments data matching

Data has been collected from government departments and businesses that manage payments for the Nation Building Economic Stimulus Plan, in order to detect participants in the Building, Construction and Ceiling Insulation Industries

This information will be compared with taxpayer records to determine whether taxpayers have reported these payments in their income tax returns and/or their business activity statements.

It is expected that approximately 30,000 records will be matched that relate to more than 5,000 taxpayers.

Building Industry data matching

Data obtained for the building services industry data-matching program includes:

complaints information
licensing information
purchase information from building industry suppliers.

The ATO have obtained details of individuals or businesses that hold a trade account with purchases between $10,000 and $3 million in the 2009-10 financial year from a major Australian warehouse chain.

Also complaints and/or licensing information for the 2009-10 and 2010-11 financial years from New South Wales Fair Trading, the Queensland Building Services Authority, the Government of South Australia, and Consumer and Business Services has been collected

The Building industry data has been used to pilot the approach of using supplier data to identify businesses in the building industry who use cash transactions to avoid their tax obligations or who fail to report some or all cash transactions.

The data is used to identify:

individuals and businesses that may be running a part of their normal business activities off the books or operating underground by avoiding their obligations to register and lodge returns, particularly in relation to transactions between consumers and business
risks and trends of non-compliant behaviour by individuals and businesses that operate in the building services industry.

Coffee Suppliers data matching

The data collected from a number of major coffee suppliers identifies businesses that have purchased a total 15 kilograms of coffee, or more, per week in the 2009-10 and 2010-11 financial years.

The data is used to identify:

businesses that do not report or under-report their sales
businesses that may be running a part of their normal business activities off the books or operating underground by avoiding their obligations to register and lodge returns
risks and trends of non-compliant behaviour by those involved in the coffee industry.

In a recent Media Release, the Tax Office made it clear that it will continue to focus on industries which have ready access to cash in their business dealings.

The Tax Office has indicated that more than 500 million transactions were matched in the past year.

Call us now for further information on what this may mean to you and your business on (08) 9300 3240

First class professional service guaranteed to save you time and money.

Diane Wilson — Wed, 14 Mar 2012 08:50:53 +0000

When we first landed in the country we never realised we had to complete tax returns at the end of every financial year. This we found very daunting. A friend put us onto Diane at Astute Accountants and it has worked out to be a great move. We have gone from dreading filling out tax returns to starting up our own small business all through Astute Accountants guidance and help. I cannot recommend Astute Accountants enough, every issue is explained and broken down so that we totally understand what is required. Their knowledge, database and patience is outstanding, all carried out in a friendly and professional environment. This is our sixth year working with Astute Accountants and they have very much become valued friends of the family. Any question is answered or followed up on without delay, no matter how big or small. First class professional service guaranteed to save you time and money – Mark & Teresa Tucker

Latest from the ATO re Personal Tax Changes

Diane Wilson — Mon, 05 Mar 2012 08:57:52 +0000

Personal tax changes from 1st July 2012

Background

On 10 July 2011, the Australian Government announced changes to the personal income tax system as part of the plan for a clean energy future. The tax changes will reform the structure of the personal tax system, making it simpler and more transparent.

From 1 July 2012, the Government will deliver tax cuts to low and middle-income individuals by increasing the tax-free threshold and adjusting the first two marginal tax rates over two phases.

Phase 1 tax cuts

From 1 July 2012, the tax-free threshold will rise from $6,000 to $18,200, and the maximum value of the Low-income tax offset (LITO) will be reduced from $1,500 to $445.

The first marginal tax rate will be increased from 15 per cent to 19 per cent, and will apply to that part of taxable income that exceeds $18,200 but does not exceed $37,000.

The second marginal tax rate will be increased from 30 per cent to 32.5 per cent, and will apply to that part of taxable income that exceeds $37,000 but does not exceed $80,000.

Phase 2 tax cuts

From 1 July 2015, the tax-free threshold will rise from $18,200 to $19,400, and the LITO will be reduced from $445 to $300.

The second marginal tax rate will increase from 32.5 per cent to 33 per cent and will apply to that part of taxable income that exceeds $37,000 but does not exceed $80,000.

Tax rates 2012-13

The following rates for 2012-13 apply from 1 July 2012.

Taxable income	Tax on this income
0 – $18,200	Nil
$18,201 – $37,000	19c for each $1 over $18,200
$37,001 – $80,000	$3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000	$17,547 plus 37c for each $1 over $80,000
$180,001 and over	$54,547 plus 45c for each $1 over $180,000

Tax rates 2015-16

The following rates for 2015-16 apply from 1 July 2015.

Taxable income	Tax on this income
0 – $19,400	Nil
$19,401 – $37,000	19c for each $1 over $19,400
$37,001 – $80,000	$3,344 plus 33c for each $1 over $37,000
$80,001 – $180,000	$17,534 plus 37c for each $1 over $80,000
$180,001 and over	$54,534 plus 45c for each $1 over $180,000

Low income tax offset changes

From 1 July 2012, the low income tax offset (LITO) threshold will increase from $30,000 to $37,000, with individuals entitled to receive the offset if their taxable income is below $66,667. The maximum value of $445 will begin to be phased out at the reduced rate of 1.5 cents for every dollar of taxable income over $37,000.

From 2015-16, individuals will be entitled to receive the LITO if their taxable income exceeds $37,000 but does not exceed $67,000. The maximum value of the LITO will be reduced to $300 and will begin to be phased out at the rate of 1 cent for every dollar of taxable income over $37,000.

Low income tax offset: summary table

	2011-12	2012-13	2015-16
Amount	$1,500	$445	$300
LITO begins to be reduced at	$30,000	$37,000	$37,000
You are no longer eligible for LITO at	$67,000	$66,667	$67,000
Withdrawal rate	4%	1.5%	1.0%

Pensioner and senior Australians tax offsets

From 1 July 2012, the pensioner tax offset (PTO) will no longer be available. Individuals previously eligible for the PTO will be eligible for the senior Australians tax offset (SATO). To reflect this merger, SATO will be known under the new name of senior and pensioner tax offset (SAPTO)

Medicare levy low-income threshold and Medicare levy surcharge

From 1 July 2012, the amendments raise the low-income threshold amounts and phase-in limits to ensure individuals do not have a Medicare levy liability where they face no income tax liability.

Specific threshold categories are as follows:

Senior and pensioner tax offset (SAPTO)

The low-income threshold for individuals entitled to the new SAPTO will be $32,279. The phase-in limit for recipients will increase from $36,100 to $37,975.

The same threshold of $32,279 will apply for calculations regarding PTO and SATO recipients who will now be under the new SAPTO.

Persons entitled to both the SAPTO and the Beneficiary tax offset (BTO) will only be able to claim one of the offsets, whichever is the greatest in value.

Other individuals

The low-income threshold amount for a single individual with no dependants will increase from $18,839 to $20,542. The phase-in threshold limit for recipients will increase from $22,163 to $24,167.

Family thresholds

The family threshold for individuals with a spouse and/or dependants who are entitled to a SATO offset will increase from $44,500 to $46,000, with both seniors and pensioners entitled to the new SAPTO. The phase-in threshold limit for recipients will increase from $52,352 to $54,117.

The family threshold for other families (known as non-SATO families) has not increased. The lower threshold limit remains at $31,789. The phase-in threshold limit remains at $37,398, with the up-lift factor for each additional child remaining at $2,919

source; taken from the ATO website http://www.ato.gov.au/content/00309813.htm

Is Cloud Accounting For You?

Diane Wilson — Sun, 22 Jan 2012 07:00:17 +0000

Is Cloud Accounting For You?

As part of the trend towards ‘cloud computing’ there has been a major move to accounting applications being made available online. Initially, accounting software for the cloud was very basic but it is becoming more and more sophisticated. Quickbooks and MYOB both now offer cloud options and a major new player Xero which only provide cloud accounting is offering an excellent product for small business users.

So what are the pros and cons

You can access data from any computer, anywhere ( even on the beach, if you can access an internet connection) – you don’t need to load the software on your computer – this also means your accountant or book-keeper can access your data which in turn means you don’t have to backup the file, send it and then wait for your accountant or book-keeper to send it back before you can carry on entering your information – it all happens almost “livetime”.
Cloud applications are normally on a monthly subscription basis- when you no longer need it you simply stop paying for it. This can mean that the software is ultimately more expensive however you will have access to all updates and upgrades without having to download and install them and more importantly you don’t have to pay an upgrade fee each year for the software.
Information from your bank statements is normally automatically downloaded into the software -this means less data entry and time spent by you and therefore more time for you to do what you do best – and in the case of your book-keeper or accountant doing the data entry for you, this will lead to a more efficient and accurate and less time consuming system of data entry
In remote areas particularly cloud computing may be difficult if there isn’t a reliable broadband service.
Some may be concerned with security issues however all software sellers state that their clouds are encrypted and data is secure.
In some instances the software may work out to be more expensive especially if you are using a basic software package and you don’t need to upgrade every year.

The attitude towards cloud computing is being compared to internet banking. Many of us were concerned about internet banking when it was first introduced but now it is readily embraced. If you think that cloud computing may be the answer for your business then contact us on (08) 9300 3240 to find out more.

our year to year finances are in the best hands

Diane Wilson — Sun, 22 Jan 2012 06:23:27 +0000

“Since coming to Australia 2 years ago, my husband Sean and I have asked Astute Accounting Services to perform our Tax Returns each year. Diane Wilson at Astute Accounting has been a friend, a caring warm considerate lady who has taken our every needs into account. She has provided us with all the support, help, advice and sensitivity that we have required, completing our returns with the utmost care and accuracy. It gives both my husband and I a complete secure positive feeling of well being and piece of mind that our year to year finances are in the best hands. Thank you Astute Accounting !! “

D& S Bence

Warning for Company Directors with Unpaid Tax Debts

Diane Wilson — Mon, 19 Dec 2011 08:35:17 +0000

Warning for Company Directors with Unpaid Tax Debts

There are new changes being proposed for companies who are lazy with their tax obligations! Currently, if you are a director of a Companyand the company does not pay it’s tax liabilities they may be issued with a Director Penalty Notice. If a director doesn’t act after receiving a 21 day Notice, then the ATO can hold a director of a company personally liable for outstanding PAYG deductions. What is not well known is that there is legislation being considered in parliament now that will substantially expand those personal liability provisions.

The Coming Changes
Under legislation currently before parliament, there this is a very significant move towards automatic director personal liability for some company tax debts. The changes are in addition to the current Director Penalty Notices. The changes are:

Where a PAYG or Super debt remains unreported and unpaid for three months after the Lodgment Day for a return, a director becomes automatically personally liable for that debt;
The ATO can proceed to recover that debt/penalty from the director(s);
Putting a company into Liquidation or Voluntary Administration after the three months has expired doesn’t avoid the personal liability (under current legislation the penalty could be avoided if the company was placed into liquidation within the 21 day notice period).

What do these new proposed changes mean for you?
If you are a director of a company and that company misses its Tax Lodgment Day by three months then you will be automatically personally liable for the company’s PAYG and Super debts. This is a change with enormous implications for directors that are lazy with their tax lodgement and superannuation payments.

What Should You Do?
In the past, when a company couldn’t pay its tax liabilities, directors sometimes thought it a good idea not to lodge the tax returns or BAS statements. That is now a very bad idea as it will most likely lead to personal liability. Directors need to:

Immediately get their company BAS returns up to date;
Always lodge the company BAS returns within three months of their due date;
Lodge the BAS returns even if the company can’t pay them!!

In the situation where a company can’t pay the tax debt then that is a problem that needs to be addressed. But at least by lodging the return it avoids a starting position of director personal liability. In the situation where a company can never pay that tax debt a director should consider placing the company into liquidation.

If you think that you may be unable to pay your tax debt our advice is to contact us before the ATO contacts you. We are finding that the ATO are becoming very aggressive in recovering debts and that the sooner we contact them with an arrangement the better. We can also work with you to manage your liabilities and your cashflow including taking over paying and managing your bills if required.

Astute Accountants were the only local accountant that bothered to contact me back

Diane Wilson — Wed, 30 Nov 2011 04:09:00 +0000

Astute Accountants were the only local accountant that bothered to contact me back after an online enquiry. We had been advised to get a second opinion regarding my company taxes so we did and Diane picked up on many errors from our previous accountant and was also able to clean up my BAS. I have found Astute Accountants staff to be very friendly and the service provided by Diane was second to none!

- Dean Tarpey- Westside Glass & Glazing

Always helpful, always on hand and reliable!

Diane Wilson — Wed, 30 Nov 2011 04:08:27 +0000

Always helpful, always on hand and reliable; cost effective and willing to assist in any issues regarding tax plus always willing to suggest recommendations for other businesses too. Diane and her staff are always very friendly, and the service I receive is second to none, one phone call or email and I get an answer that day. Loving your work ladies, keep it up and thank you very much for your continued assistance.

- Denise

my tax affairs needed sorting, urgently

Diane Wilson — Wed, 13 Apr 2011 07:13:04 +0000

I felt I was hitting a brick wall – my tax affairs needed sorting, urgently – Diane said “Don’t worry, we will sort it out “ – and she has – the outcome is astounding” –

Tony - Planet Inn