November 2018 | Accounting & Tax

Over recent months, an alarming number of Australians have been targeted by telephone scammers pretending to be calling from the ATO. Their potential victims are faced with threats of large fines, court or jail time if they don’t pay up immediately. While this is not a new scam, the tactics employed to falsify plausibility have recently increased in sophistication, making it more likely for people to be tricked. Scammers are now using technology to make it look like their calls originate from a legitimate ATO phone number. This number may appear on caller ID, be left on voice mail messages for call backs, or directed by *69 for call back functionality. Scammers do this to make the calls seem more valid when they call people a second time. Most frequently the number appearing is 6216 1111, but other numbers have been used as well.

Scammers have also been impersonating accountants and tax agents. A recent example of this saw a victim called by a scammer who then supposedly ‘dialled-in’ the victim’s accountant’s office. Stating that his usual accountant wasn’t available, a second scammer went on to agree that the victim did indeed owe money to the ATO and needed to pay immediately. In a state of panic, the victim then went to a Bitcoin machine and deposited the money for the fraudster.

In addition, there have been reports of scammers telling potential victims that they are due a tax refund and asking for a credit card number to deposit the money onto. However, no refund is forthcoming, instead the scammers steal funds from these cards without the knowledge of the card holder.

In order to stay safe, remember that a legitimate caller from the ATO will never:

  • threaten you with arrest
  • demand immediate payment, particularly through unusual means such as bitcoin, pre-paid credit cards or gift cards
  • refuse to allow you to speak with a trusted advisor or your regular tax agent
  • present a phone number on caller ID
  • arrange to pay a refund to a credit card

Other warning signs include:

  • Telling you a complaint has been made against you, that you are committing tax fraud or that you have to pay a debt that you know nothing about
  • Threatening immediate arrest or court if you don’t call them back or pay straight away
  • Unwillingness to provide explanations or allow you to ask questions about the debt – often accompanied by aggression or abusiveness
  • Request for payment using unusual methods of payment that the ATO does not use such as: iTunes cards, Bitcoin cryptocurrency, store gift cards or pre-paid visa cards
  • Request for a credit card number over the phone

As your tax agent, the ATO will often contact us as well as you.

Remember, if in doubt:

  • It’s OK to hang up
  • Call us. As your tax agents we look after your affairs so can advise you
  • Call the ATO directly on 1800 008 540 to check if the call was legitimate or to report a scam.

At AustAsia Group, are always here to help. Should you have any further enquiries, please don’t hesitate to contact us on (08) 9227 6300 or clientservices@austasiagroup.com.

Important information and disclaimer

This publication has been prepared by AustAsia Accounting Services Pty Ltd Registered Tax Agent No 7587 3005.

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.

Information in this publication is accurate as at the date of writing, 7 November 2018. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way.

Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of AustAsia Group, nor their employees or directors give any warranty of accuracy, not accept any responsibility for errors or omissions in this document.

Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

June 2018 | Accounting & Tax

State Budget

With the State Budget being announced on 10 May 2018 and the Federal Budget on 8 May 2018, we highlight some of the key proposals put forth for businesses to take note of leading into the new financial year:

Expansion of the Building and Construction Industry Training Fund Levy

From 1 July 2018, engineering construction projects in the resource sector will be facing the 0.02% Building and Construction Industry Training Fund Levy as based on construction values.

The resource sector had previously been exempt from this levy from 1995, with the levy only applying to residential, commercial and civil engineering projects undertaken in Western Australia and with a construction value exceeding $20,000.

The levy is required to paid prior to commencement of construction works and penalties apply for failure to pay.

Increase in State Government Projects

With much of the State Government spending being placed on improvements to hospitals ($104 million across hospitals in Geraldton, Murdoch, Osborne Park and Joondalup), schools ($1.2 billions across the state over 4 years for upgrades to existing schools and $157 million on new schools), and the new Metronet system ($3.6 billion across the board), more opportunities to tender government works will be open to WA businesses.

The State Government will be focused on using the services of local supplies particularly for construction and maintenance projects.

New Industries Fund

Launched back in 2017, the New Industries Fund will see an injection of $17.8 million over 4 years in government spending.

The objective of the fund is to support new businesses in WA and support job growth.

The fund will function through a variety of initiatives open to local businesses including business growth programs, sponsorships, investments attractions and encouraging collaborations between industries and universities.

Increases in Utility Costs and Government Services Levies

Operating costs for many businesses are likely to rise given the number of fee increases proposed by the State Government on utilities and other government services in the budget.

Fees increases are set to be applied to electricity charges (7% increase), water charges (5.5% increase), metro Emergency Services Levies ($28 increase) and associated motor vehicle fees (5.8% increase on vehicle license recording fees, 3.7% on drivers’ licenses and 2.4% on motor injury insurance).

Federal Budget

The Federal Budget emphasised a crackdown on compliance, with many of the proposals targeting stricter processes to prevent tax avoidance and targeting non-compliance.

We summarise some of the key points of the Budget as well other government publications for business to consider leading to 1 July 2018 as follows:

Tax Related Matters

Increased ATO Data Matching for Motor Vehicle Expenditure and Income

The ATO will be receiving data from state and territory motor vehicle registry authorities in an attempt to reduce non-compliance associated with the sale and purchasing of motor vehicles.

The ATO will now be receiving information on motor vehicles transferred to or newly registered where values exceed $10,000. The objective of the new data matching process will be to ensure taxpayers are correctly meeting their obligations for reporting GST, fringe benefits and income tax on relevant purchases and sales.

Non-compliant Payments No Longer Deductible

Similar to super guarantee payments, the ATO will no longer allow deductions for wage payments to employees wherein PAYG obligations have not been met. This will include payments from which PAYG withholding is required to be held but has not been remitted to the ATO.

Furthermore, the deduction for businesses will be denied wherein payments to contractors with whom there are PAYG withholding obligations have not been met. Under the current rules, where a contractor does not provide an ABN, businesses are required to withhold tax at the top marginal rate and remit this to the ATO.

Failure to remit contractor and employee withholding to the ATO, will therefore prevent the deductibility of such expenses regardless of whether the expenses have been paid or not.

Introduction of Cash Receipt Limit for Businesses

The government has also announced a proposed new cash receipt limit of $10,000 for businesses to be implemented from 1 July 2019 in an attempt to deter tax avoidance and criminal activity.

The proposed limit will only affect cash transactions undertaken between businesses and consumers and excludes transactions between financial institutions.

Requirements for Taxable Payments Annual Reporting Expanded

Currently, businesses engaged in the building and construction industry are required to report details of payments made to contractors for the services provided on an annual basis. This includes payments to subcontractors, consultants and independent contractors.

From 1 July 2018, the requirement to lodge this report with the ATO will be expanded to apply to businesses in the industries of supplying services relating to of security and investigation, road freight transport, computer system design and cleaning.

The proposal forms part of the government’s Black Economy Taskforce measures aiming to reduce tax avoidance.

Extension on the Small Business $20k Instant Asset Write Off Deduction

The $20k instant asset write off deduction is set to be extended to the financial year commencing 1 July 2018.

Eligible small businesses can purchase depreciable assets under $20,000 (excluding GST) and claim an immediate deduction on the purchase. For the deduction to be applicable, the asset must be held for business purposes and be ready to use by the end of the financial year. Where assets are used for a combination of both private and business portions, only the business portion is able to be written off.

Amendments to Division 7A UPE rules to begin from 1 July 2019

Amendments are set to be made to the current tax legislation concerning Division 7A loans between private companies and trust income.

The objective of the amendment will be to clarify the circumstances in which unpaid present entitlements (UPEs) apply for Division 7A purposes and are set to come into effect from 1 July 2019.

The measure will ensure the UPE is required to repaid to the company providing the loan and subject to tax as a dividend.

Introduction of Anti-Avoidance Rules for Circular Trust Distributions to Family Trusts

In an effort to prevent circular distributions of trust income and avoidance of tax, the budget also proposes a new rule to apply to closely held trusts including family trusts.

The measure will allow the ATO to pursue family trusts distributing income to related trusts with the purpose of returning the distributed income to the original trustee and avoiding payment of any tax. The ATO will now be able to impose tax on distributions at an equal rate to the highest personal tax rate plus Medicare levy wherein tax avoidance is evident.

Payroll and Superannuation Compliance

Single Touch Payroll Reporting Requirements

Single touch payroll (STP) will mean reporting changes for employers with employees of 20 or more. From 1 July 2018, these employers will be required to report certain payments to the ATO using their business management software.

Information being collected from the ATO includes salaries and wages, pay as you go (PAYG) withholding, super liability amounts and ordinary time earnings.

This will mean employers required to report will need to ensure their payroll system will offer STP reporting either through an upgrade or additional service to be acquired.

Additionally, STP reporting will mean employers can view their PAYG withholding liability through the Business Portal and will no longer need to provide employees with a PAYG Payment Summary at the end of the financial year.

For businesses, this will mean the ATO will have a better view of payments to employees and the ability to track non-compliance in PAYG tax withholding and super guarantee payments as they occur.

Single touch payroll is being proposed to be expanded to also include employers with 19 or less employees from 1 July 2019.

Super Guarantee Compliance

The ATO’s new super guarantee compliance factsheet explains employer super obligations and the approach taken by the ATO for non-compliance. Non-compliance includes non-payment, underpayment and late payment to eligible employees.

When assessing whether to penalise employers, the ATO has advised they consider the history of engagement of the employer with the ATO and history of compliance. Where regular engagement and positive compliance history can be shown, penalties are less likely to occur.

The ATO is encouraging employers with difficulty in meeting their obligations to come forward and contact the ATO. We note the Commissioner has discretion to consider full or partial remissions of penalties so being on the front foot is of the utmost importance.

Enforcement actions the ATO can undertake to force compliance in situations where employers repeatedly fail to make correct payments include:

  • Collecting amounts owed directly from banks or third parties that owe them money
  • Collecting amounts owed directly from the company directors
  • Actions that can result in bankruptcy or liquidation.

Furthermore, the government have introduced a 12-month amnesty for catch up payments on previously unpaid super guarantee liabilities. Catch up payments made under this amnesty will attract a nominal interest amount, however will ensure any potential penalties for late payment and other enforcement actions are not applied.

The amnesty applies from 24 May 2018 to 24 May 2019 and with the government giving more powers to the ATO to come down harder on employers for unpaid liabilities, employers need to act now to bring their payments up to date.

International Tax

Common Reporting Standards

The OECD has updated the list of countries with which they exchange financial account information under the Common Reporting Standard Multilateral Competent Authority Agreement (CRS MCAA).

Furthermore, certain businesses, such as those that are foreign tax residents or that have customers whom are foreign tax residents, will need to lodge a CRS report to the ATO on an annual basis.

Other

Large Government Contract Tenders Requirement to be Tax Compliant

The government is also implementing a new requirement for businesses wanting to tender larger scaled government contracts. The new requirement will mean businesses will need to provide information relating to the status of tax obligations and prove compliance.

The requirement is set to affect contracts over $4 million (including GST).

R&D Tax Incentive Overhaul

With the number of Research and Development (R&D) tax incentive applications increasing substantially from 2010, a number of changes will be coming into effect on or after 1 July 2018.

These changes will focus on reduced benefits being available from the incentive, tightened grants for software R&D claims and tightened regulations on what is considered to be ordinary business expenditure. The ATO have historically placed emphasis on ordinary business activities being categorised as supporting activities to increase R&D claims.

Furthermore, the changes will also affect the R&D intensity percentage of entities. The R&D intensity percentage is based on the R&D related expenditure expressed as a percentage of the total business expenditure, with percentages correlated to the maximum available tax offset.

Currently, there is a limit on which a business can claim the accelerated rate for the R&D tax incentive. Amounts above the limit can still be claimed however are restricted to the entity’s corporate tax rate. The budget proposes the maximum eligible expenditure to receive the concessional rates will rise from $100 million per to entity to $150 million per entity per year.

The proposed changes will mean businesses will be placed under greater scrutiny when applying for the incentive, and a greater need for businesses to ensure documentation and evidence is maintained when applications are made.

Should you be interested in discussing any of the above further, or want to know how we can assist you, please contact our Client Services team at clientservices@austasiagroup.com.

May 2018 | Accounting & Tax

Welcome to our latest Quarterly Tax Matters newsletter that focuses on yesterday’s Federal Budget.

In this issue, we look at how the Federal budget is focused on providing sustainable tax relief to those in the workforce, stimulating spending and encouraging businesses to invest in creating jobs.

Please click on the link below to open the latest edition of Tax Matters.

Tax Matters May 2018

If you would like some more detailed information about the numbers in the 2018 Federal Budget, please click this link.

2018 Federal Budget

If you have any questions or would like clarification on the above, please contact us at clientservices@austasiagroup.com

February 2018 | Accounting & Tax

In this issue, we look at recent updates released by the Australian Taxation Office (ATO) relating to:

  • Property investors reminded of new deduction rules
  • Extended due date for 2016-17 SMSF returns
  • FBT issues that raise ATO attention

Please click on the link below to open the latest edition of Tax Matters.

Tax Matters February 2018

If you have any questions or would like clarification on the above, please contact us at clientservices@austasiagroup.com

February 2018 | Accounting & Tax

Are you a subcontractor to Cooper & Oxley? What should you do now?

A number of AustAsia’s clients have unfortunately been caught up in the recent decline of Cooper & Oxley. This includes:

  • unpaid invoices
  • tools and equipment trapped on-site, and
  • unpaid materials, fixtures, and fittings already installed on-site

If you are in this situation, we hope you find the following suggestions useful.

The first step is to consider the impact it may have on you. You should talk to your accountant or financial planner as soon as possible to determine what the impact, if any, will be on your business or personal finances. You may also need to take legal advice in relation to formal recovery options that could be available to you.

If you have been affected by the Cooper & Oxley administration or by any of the other WA failed builders, then you could take the following actions.

  1. Approach your existing suppliers and creditors to explore the possibility of extending payment terms. This will assist with easing your immediate and medium-term cash outlays.
  2. Similarly, review your current debtors and see if accelerated payment arrangements could be agreed with your customers. This may include part-payment on outstanding invoices. Likewise, review old debtors and if appropriate, apply pressure for payment.
  3. Approach the ATO in relation to current and future BAS / IAS lodgements, and advise them of the possibility of the new bad debt and request an extension of time to pay your ATO obligation.
  4. Contact your finance broker or bank to explore your options in relation to financing to assist with cash flow. This may take the form of short term personal borrowing, extended overdraft, or short- to medium-term business finance.

The next step is to protect yourself for the future:

  • Are your personal assets protected against any claim or downfall of your business? You may need to take advice on your current ownership structure and consider if any changes need to be made.
  • Do your business trade terms and conditions cover situations such as this or could they better protect you? Have you reviewed your Head Contracts and do you know the terms?
  • Are you utilising the Personal Properties Securities Register to protect your goods and secure payments owed to you? This can also be used to protect trade tools, equipment, and machinery if used correctly. Please click here to view our Personal Properties Securities Act fact sheet.

AustAsia Group has specialised accounting, finance, and legal professionals in-house to help you navigate what can be a stressful and confusing time.

We invite you to contact us to discuss your specific trade and financial circumstances.

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