INVITE SANTA NOT THE TAX MAN TO YOUR CHRISTMAS PARTY

At this time of year business’ often want to reward employees and customers with Christmas gifts.

Generally the FBT and income tax consequences for these gifts are as follows:

1.  gifts to employees and family members – are liable to FBT (except where
     the ‘less than $300’ minor benefit exemption applies) and tax deductible; and

2.  gifts to clients, suppliers, etc. – are not liable to FBT and are tax deductible.

For more information on FBT exemptions for minor fringe benefits please see the ATO link below:

 

https://www.ato.gov.au/General/Fringe-benefits-tax.../Minor-benefits-exemption

 Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

 

TAX OBLIGATIONS OF OPERATING AN UBER SERVICE

If you are operating an Uber service then you will need to register for Goods and Services Tax (GST) from the first dollar of income that your earn as it is classed as ride-sourcing. Once you are registered for GST this will mean that you will need to report generally on a quarterly basis via a Business Activity Statement (BAS) the amount of GST you earned and paid. 

In addition to the GST obligations of operating a ride-sourcing service, you will also need to report to the Australian Taxation Office (ATO) in your Income Tax Return, income you earn and deductions that you have incurred in earning that assessable income.

For further information the ATO has released very informative guidance notes that can be accessed via the link below:

https://www.ato.gov.au/Business/GST/In-detail/Managing-GST-in-your-business/General-guides/Providing-taxi-travel-services-through-ride-sourcing-and-your-tax-obligations/?page=1

 Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

 

CHRISTMAS GREETINGS

GST REGISTRATION

 

When you commenced your business, you may have fallen well below the income threshholds required to necessitate GST registration. This is however a matter that needs to be considered on an ongoing basis.

 

You must register for GST if:

 

• your business or enterprise has a turnover of $75 000 or more
• your non-profit organisation has a turnover of $150 000 per year or more 
• you provide taxi or limousine travel for passengers in exchange for a fare as part of your business, regardless of your turnover – this applies to both owner drivers and if you lease or rent a taxi
• you want to claim fuel tax credits for your business or enterprise.

 

If you're not registered for GST, check each month to see whether you've reached the threshold, or are likely to exceed it. If your turnover exceeds the relevant threshold, you must register within 21 days of reaching it.

 

If you don't register for GST and are required to do so, you may have to pay GST on the sales you have made since the date you became required to register. This could happen even if you did not include GST in the price of those sales. You may also have to pay penalties and interest. 

 

For further information see the Australian Taxation Office website at:

https://www.ato.gov.au/Business/GST/Registering-for-GST/  

 Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

HEADING OVERSEAS WITH A HELP (OR TSL) DEBT?

 

The Government has made changes to the rules around repayments of HELP debts for those planning to go overseas.

From 1 January 2016 those with HELP debts have been required to update their contact details via myGov.

From 1 July 2017 you will be required to report your ‘worldwide’ income to the ATO. If you are above the repayment thresholds the ATO will send you an assessment detailing the amount of your debt that you need to repay. 

For more information please see the following from the ATO:

 

https://www.ato.gov.au/Individuals/Study-and-training-support-loans/Overseas-repayments/

 Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

HOLIDAY HOME RENTAL: DON'T GET BURNT THIS SUMMER

If you own a holiday home and rent it out for any period then you must declare the rental income in your income tax return and can only claim tax deductions for expenses based on the proportion of the year the property was available to be rented out. 

Please see the link to the ATO website for further information:

https://www.ato.gov.au/General/Property/In-detail/Holiday-homes/

  

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

 

AN EMPLOYEE MAY BE ABLE TO CLAIM TRANSPORT OF BULKY TOOLS AND EQUIPMENT

As per the Australian Taxation Office website:

  

"You can claim the cost of using your car or vehicle to travel between home and work if: 

• you have to carry bulky tools and equipment you need to use for work
• it is essential to transport them to and from work and it is not done as a matter of convenience or personal choice
• there is no secure area for storing them at your workplace"

 

The link below outlines the substantiation requirements and the new rules from 1 July 2015 for claiming car expenses with the only two methods allowed; cents per kilometre and log book method. The one third actual cost and 12% of original value method are no longer available.

https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Deductions-for-specific-industries-and-occupations/Real-estate-employees---claiming-work-related-expenses/?page=2

 
Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

SMALL BUSINESS TAX CONCESSIONS

Consider Rachel’s Case  Rachel, 54, has been operating a primary production small business in the Macedon Ranges for 12 years. Rachel has decided to downsize and sell her farm. The real estate agent has estimated it will be able to be sold for $1,000,000. She is wondering what the Capital Gains Tax (CGT) implications will be in her case.  As Rachel qualifies as a Small Business Entity (SBE), she is able to take advantage of the small business CGT concessions. Based on the purchase and estimated sale price the gross gain is $500,000. As Rachel has held the property for greater than 12 months she is eligible for the general 50% discount prior to the application of the small business concessions. Rachel may elect to use the Replacement Asset Rollover giving her the option in the next two years to roll over the gain into another small business asset. As Rachel will subsequently turn 55 she may then elect to use the Retirement Concession under which she is not required to contribute the amount into superannuation and there will be no tax payable on the gain.   The example can be demonstrated as below:   Sale price                            $1,000,000 Purchase price                    $   500,000 Gross Gain                          $   500,000 50% General Discount       ($   250,000) Sub-total                              $   250,000 Retirement Concession      ($   250,000) Net Capital Gain                      Nil Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further. We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

SUPPORTING LOCAL STUDENTS AND THEIR COMMUNITIES

At Langley McKimmie we are always looking for ways to support the community that supports us. This year we have undertaken to sponsor end of year awards at three secondary schools within the Macedon Ranges. The first of these awards was presented at the Braemar College Celebration Night earlier this month. We sponsored the Year 11 Tower Encouragement Award, an award presented to a student showing outstanding integrity and academic effort.

Further presentations will be made to students from both the Alice Miller School and Gisborne Secondary College at their upcoming awards evenings.

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

OCCUPATION SPECIFIC DEDUCTIONS

The ATO has released helpful occupation specific guides to assist works in determining what type of deductions you may be entitled to as well as those that are often claimed in error. 

For example, Flight Attendants may be entitled to some of the following depending on their specific circumstances: 

· Compulsory Work Uniform
· Rehydrating Moisturisers
· Cost of making up bar shortages
· Luggage

Some items that you cannot claim for include: 

· Purchase or cleaning of conventional clothing
· General cosmetics and accessories

For more information please see the following from the ATO: 

https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Deductions-for-specific-industries-and-occupations/Flight-attendants---claiming-work-related-expenses/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

 

 

RAIN, RAIN, RAIN - NEW DAMS AND WATER FACILITIES

The arrival of all this rain may have you thinking about building a new dam or installing water storage tanks.

If you are a primary producer you may be able to claim an immediate deduction for capital expenditure of water facilities.

Please see the ATO link below for more information

https://www.ato.gov.au/Business/Primary-producers/In-detail/Capital-expenditure/Water-facilities/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

 

NEW TAX TABLES

Employers please note as of 1 October 2016 the ATO has released updated tax tables which are available on the ATO website. This is to reflect the changes to the personal income tax rates which have taken effect as of 1 July 2016. 

For more information please see the following from the ATO:

https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-individuals/Targeted-personal-income-tax-cut/

https://www.ato.gov.au/Rates/Tax-tables/

 

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

 

 

HOBBY INCOME – NON ASSESSABLE INCOME

Where an activity you engage in is deemed a hobby, for example a spare-time activity or a pastime pursued for pleasure or recreation, any income generated from that activity is generally excluded from your assessable income of your tax return.

Types of income that are excluded may include:

- Gifts or amounts bequeathed to you
- Prizes that are not related to your business activities
- GST that you have collected
- Money that you have borrowed
- Most payouts from your own personal income protection insurance policy
- Gambling wins

The following link explains in more detail excluded income

https://www.ato.gov.au/Business/Income-and-deductions-for-business/Working-out-your-assessable-income/What-to-exclude-from-your-assessable-income/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

VOLUNTARY HELP REPAYMENTS

The ATO offers an incentive for taxpayers to make additional voluntary repayments on their HELP debts. If you make a payment of $500 or greater the ATO will deduct an additional 5% of the repayment amount off your debt. This could be attractive if you are trying to actively reduce your HELP debt. Please note though you will still be required to make the compulsory repayment when you lodge your tax return at year end if your income is over the threshold which is currently $54,869. In addition the ATO is withdrawing this bonus scheme as of 1 January 2017 so if you wish to take advantage there are only a few months left to do so.

For more information see the following from the ATO.

https://www.ato.gov.au/Individuals/Study-and-training-support-loans/Voluntary-repayments/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

RAINING, RAINING, RAINING! Maintaining livestock and rainfall records

Accounting for primary production livestock on small holdings can be challenging. Remembering births, deaths and other movements during the year is often difficult when 30 June rolls around.

Here at Langley McKimmie, we have developed a wall chart to assist with the recording of livestock movements throughout the year. We’ve combined it with a rainfall chart and calendar.

If you would like a copy, please feel free to drop in to collect one.

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.  

SMSF's AND RELATED PARTY LENDING

A related party limited recourse borrowing arrangement (LRBA) is a loan between a non-bank (related party) and a SMSF for acquisition of property or listed security to be held in the SMSF.  Trustees of SMSF’s that currently have a LRBA in place for a property or listed security need to ensure that these LRBA’s are in line with the new safe harbour provisions set out by the tax office in relation to:   - Interest Rate - Term of Loan - Maximum Loan-to-value ratio - Security - Nature & frequency of payments - Loan agreements   Where a LRBA is not in line with the safe harbour provisions, trustees have the options to:   - Change the terms so they are consistent with arms - length dealing by 31 January 2017 - Bring the LRBA to an end by 31 January 2017 - Refinance to a commercial lender by 31 January 2017   The tax office has advised trustees of SMSF’s have until 31 January 2017 to ensure their LRBA is in line with the safe harbour provisions, including correcting their treatment during the year ended 30 June 2016. Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further. We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

SUBDIVIDING LAND? YOU MAY HAVE TO PAY GST

When subdividing a block of land, including the block on which you currently reside, there are many tax matters to consider.

One of which is whether or not you are required to register for GST.

The below ATO link details some items to consider when subdividing land including whether GST is required.
 

https://www.ato.gov.au/General/Property/Land---vacant-land-and-subdividing/Subdividing-land/

Please contact Andrew Marshall or Janine Orpwood at Langley McKimmie Chartered Accountants on (03) 5427 8100 to discuss further.

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.