Blog for Nitro Accounting, Tax Returns, Burleigh, Robina, Varsity Lakes

Claiming fuel tax credits for Plant Operators and Landscapers

Fri, 25 Jun 2021 02:20:46 GMT

Plant Operators and Landscapers may be able to claim fuel tax credits on the petrol or diesel expended undertaking off road activities.

Fuel tax credits provide you with a credit for the excise included in the price of fuel you use for your eligible business activities.

Therefore, the credits received are classified as business income and so need to be included in your tax return.

The credits are nearly 43 cents per litre, which can be a significant amount for a typical eligible business.

To be eligible to claim fuel tax credits you must be GST registered when you purchase the fuel.

You can only claim your credit on your BAS but there are time limits that apply.

Generally you must claim within four years from the end of the BAS period the fuel was acquired in.

Please contact us at Nitro Accounting for more details

Increase in Superannuation

Fri, 18 Jun 2021 02:18:13 GMT

From July 2021, Superannuation Guarantee calculated on your wages paid will be increased from 9.5% to 10%.

Superannuation is based upon ordinary time earnings and not overtime, however if any penalty rates apply on your normal ordinary work such as shift allowance then they will be included in the superannuation calculation.

The employer is only liable for wages, holiday pay and superannuation when they run the payroll but the liabilities due to specific sections in the tax act are only tax deductible when actually paid.

Superannuation will be at 9.5% for payrolls processed up to Wednesday 30th June 2021 and at 10% for payrolls processed after Wednesday 30th June 2021.

Subject to future government changes, Superannuation guarantee will continue to increase 0.5% a year for the next 4 years until it reaches 12%.

By law, your employer must pay your superannuation by the 28th of the second month after each financial quarter. If your employer pays after this date you will be entitled to extra superannuation.

Please contact us at Nitro Accounting for more details

Salary Sacrificed Motor Vehicles

Fri, 11 Jun 2021 02:15:19 GMT

Even though your salary sacrificed motor vehicle maybe thought of as your own, you cannot claim any tax deductions for any work use mileage nor for any other running expenses that you may have paid during the year.

This may appear as unfair but your employer has already claimed tax deductions for it and there is a section in the old tax act that specifically restricts you from also claiming.

If you have paid any of the running expenses directly it will is available to reduce the fringe benefit amount that you have to sacrifice from your salary.

If you have made these claims in past years you will need to amend your tax returns to reverse them before any ATO audit commences.

Recently the ATO has obtained client records from all the major salary sacrifice companies with the objective of determining who has claimed tax deductions for items they also salary sacrificed.

Please contact us at Nitro Accounting for more details

ATO Data Matching Pays Off

Mon, 07 Dec 2020 22:00:00 GMT

A sub-contractor bricklayer was sentenced to 3 years gaol for lodging 4 quarterly BAS with a total of $85,359 in reported sales despite bank statements revealing deposits of $375,209 leading to a GST shortfall of $26,570.

The taxpayer also understated his income on his tax return, leading to a tax shortfall of $70,441.

The ATO detected the discrepancy in the taxpayer's income and BAS returns by matching sub-contractor information contained in the Taxable Payments Annual Reports (TPAR) supplied by the building industry contractors that the taxpayer contracted with.

The government recently introduced the Single Touch Payroll (STP) reporting system to increase the reporting by business of their payments to employees from annually to soon after each pay run. Over time the ATO will seek to increase the information required.

For payments by business to contractors, the government has used the Taxable Payments Annual Reports (TPAR) supplied by business to monitor certain industries known to be susceptible to cash in hand transactions.

The government has been expanding the scope of industries from IT, building construction and road freight to include courier and cleaning services, that business needs to include in their annual TPAR.

Businesses do not have to be operating in TPAR targeted industries itself to have to lodge annual reports to the ATO. As long as the total of the payments that the business makes with the TPAR targeted industries exceeds 10% of the business' total income they will be required to report.

Due to COVID, many cafes and restaurants now need to lodge an annual TPAR if their payments to food delivery contractors exceeds 10% of total sales.

Please contact us at Nitro Accounting for more details

Sharing Economy

Tue, 13 Oct 2020 22:00:00 GMT

We're living in a sharing economy. Even with Covid-19, people are using sharing services such as AirBnB, Uber, Car Next Door to make some extra money from assets that might otherwise be sitting idle and not being used.

Putting aside the challenges around managing hygiene, it's important to understand risks including; insurance for damage, theft, injury claims, fraud, managing difficult people and the possibility of creating tax problems.

We encourage clients who are considering entering the sharing economy to do their homework and approach it in a business-like fashion. The advantage of seeking our advice early is that you can anticipate and plan for the best path forward to minimise future problems.

For example, Uber drivers need to ensure that their car insurance is endorsed for Uber travel because most policies are for private travel only. AirBnBers have temporary clients but permanent neighbours so to have a sustainable enterprise the management of the respect for neighbours is essential.

The ATO uses a range of sophisticated data matching tools to identify people who earn income from numerous sources including the sharing economy. The sharing economy facilitators such as Uber are all legally obliged to report transactions of all clients to the ATO.

Please contact us at Nitro Accounting for more details

Prior Year Tax Returns

Sat, 12 Sep 2020 23:00:00 GMT

Importance of dealing with any Outstanding Prior Year Tax Returns

In a recent Tribunal case a taxpayer failed to have over $7,000 of fines on his unlodged 2011 and 2012 tax returns reversed despite warning letters going to a wrong address.

When onboarding new clients we notice that sometimes they may have outstanding tax returns from the distant past suddenly appear in their tax records that needs to be dealt with. This has been occurring because the ATO has been centralising its systems more and consequently has exposed a lot of previously overlooked issues.

Some taxpayers are tempted to think that if they have gotten away for it this long then they can keep ignoring it. The ATO has millions of clients so if you have outstanding issues then maybe they haven't gotten to you yet or possibly warnings are going elsewhere.

There are fines for not lodging the actual tax return even if a refund was applicable. There are also additional fines that can be imposed on the tax payable.

A default assessment is where the ATO guesses your income and expenses and lodges your tax return for you. Usually a default assessment results in tax payable and therefore a fine is imposed at 75% of the tax now payable.

Any fines and interest payable resulting from addressing issues in most circumstances can be reduced or eliminated if dealt with before the ATO discovers it.

The real value in appointing Nitro Accounting as your tax agent is that your overall tax affairs can be managed and issues dealt with before they become an expensive problem.

Rental Properties

Tue, 28 Jul 2020 23:00:00 GMT

Nitro Accounting is a CPA practice and we prepare tax returns at reasonable prices. Completing rental properties and investment schedules of all types are our specialty.

We can provide a complete service to help you administer your rental properties. Our clients find our online portal and over the phone service very convenient.

Please contact us at Nitro Accounting for more details

Small Business Incentives

Mon, 06 Jul 2020 23:00:00 GMT

From 1 ^st July 2020, the small business tax offset rises from 8% to 13%. This business income can be directly received as a sole trader or distributions from business partnerships and trusts. Small businesses trading as a company will notice the tax rates drop from 27.5% to 26%.

The continued increase in business tax incentives by the current government are more reasons to start and develop your own small business.

To help you determine what trading structure suits your circumstances, please contact us at Nitro Accounting to help you achieve your goals.

When can I lodge my tax return?

Mon, 29 Jun 2020 23:00:00 GMT

Up until this year, your employer had until 14 ^th July to issue you with a payment summary. For most people this won't happen now. Most employers have been subject to Single Touch Payroll (STP) which required them to report your earnings direct to the ATO after each pay day.

Income reported through STP will not be included on Payment Summaries. This may mean most people will no longer be given Payment Summaries. Instead, your Statement of Earnings will appear in your myGov account and your tax agent will be able to download it.

For employers with less than 20 employees they have until 31 ^st July to finalise their STP. Banks will advise the ATO of your interest received later in the year. If you lodge early and the Bank later advises the ATO of a different amount the ATO have threatened to later emend your return.

Please contact us at Nitro Accounting for more information.

Working from home during COVID-19

Tue, 07 Apr 2020 23:00:00 GMT

Normally you cannot claim a home office unless you have a room set aside and used exclusively by you while you work.

However the ATO recognises that a lot of people working from home have not done so by choice.

This means from March 2020 the home office expense claim rules have been relaxed to include the following;

The simplified COVID-hourly rate includes all home office running costs such as depreciation, power, internet and phone costs thereby saving all the usual diary usage entries.

The other methods of claiming home office expenses are still available however the usual substantiation is required.

Please contact us at Nitro Accounting for more information.

COVID-19 Sole Trader Gov Payments

Mon, 30 Mar 2020 22:00:00 GMT

If you run your own business as a sole trader and your current business turnover has fallen by more than 30% compared to a typical month last year you will be eligible for the $1,500 per fortnight JobKeeper payment.

You can continue to conduct your business and it will be paid monthly in arrears.

We at Nitro Accounting can help you apply for this payment..

COVID-19 Small Business Guarantee Scheme for Bank Loans

Sun, 29 Mar 2020 22:00:00 GMT

The federal government has introduced a COVID-19 SME guarantee scheme for bank loans, whereby the government will provide a 50% guarantee for loans up to $250,000 per borrower. Businesses with annual turnover less than $50m will be eligible to apply for the loan, which will function similarly to a line of credit, where only amounts drawn down by the borrower will be subject to interest.

To access this scheme you will have to approach your bank from early April 2020 and will still be subject to their normal credit assessment procedures. The scheme will last till September 2020, where participating banks can issue new loans under this scheme up to 30 September 2020.

We encourage you to apply for this scheme if you are facing short-term cashflow obligations. It has concessionary repayment terms, and is partially underwritten by the Government, which equates to a lower borrowing interest rate.

Please contact us at Nitro Accounting for more information.

COVID-19 Qld Gov Business Loans

Sun, 29 Mar 2020 22:00:00 GMT

The Qld gov also has $250,000 business loans for small business. These loans are provided through Qld Rural & Industry Development Authority (QRIDA) rather then through banks like the Federal Gov scheme. You can apply for both depending on your situation. The QRlDA loan is for 10 years and fixed at 2.5% with 1 year with no interest or repayments and interest only for second and third year.

The Federal gov scheme is for 3 years at the banks interest % with 6 months no interest or repayments and interest only for 6 months. The government 50% loan guarantee will lower the banks usual rates.

Please contact us at Nitro Accounting for more information.

Work Expense Diaries

Mon, 20 Jan 2020 22:00:00 GMT

The Australian government and the ATO have recently concluded that individual taxpayers are claiming over $8 Billion a year more than they expect.

This will no doubt mean that this tax season the ATO will be under greater pressure to query work expenses a lot more.

If you claim work expenses such as telephone or internet then you will need to apportion the expenses between private and business amounts.

The ATO and the tribunal require the apportionment to be on a logical manner and not a ball park guess.

With Netflix and YouTube now common, the ATO will not accept figures like 50% business use for research and checking emails unless you have something that supports your claim. A taxpayer had his phone claim reduced to $50 because he couldn't support his 75% claim of calling the office. The tribunal on appeal said it should have been zero but they let the ATO offer of $50 stand.

The ATO has for a long time required that a 4 week diary be completed each and every year that you intend to claim. If the ATO in their preliminary audit, request from you how you based your business percentage, you will need a diary. Without a diary, they will dismiss the claim and fine you for being reckless.

The ATO have had bigger fish to fry but will start to query a lot more.

There is only 6 months until year end so if you need a 1 month (4 week) diary, you will need to start it soon.

Please contact us at Nitro Accounting for more information.

Start the new year with a new business

Mon, 16 Dec 2019 22:00:00 GMT

If your 2019 was not as financial as you would have liked, maybe starting a new business in 2020 is what you need.

Everyone has a hobby or a passion that can be turned into an income producing business even if it starts part time.

The idea to start up a business can be daunting but we at Nitro Accounting can help you start. We can also provide a service as a business coach if you need help in that area.

Start the new decade in the direction that you want.

Single Touch Payroll for Family Businesses

Tue, 03 Dec 2019 22:00:00 GMT

If you run a family business with any employees that are not family members then the normal Single Touch Payroll rules apply for those employees.

This means that after 01/07/2019, unless concessions apply, a Single Touch Payroll Report needs to be lodged after each pay run for all employees that aren't family or a director.

Single Touch Payroll reporting for businesses with less than 20 employees for Directors or family members is as follows;

When quarterly reporting starts in 2021 for directors and family, each quarter must contain a reasonable estimate of income.

The value for reasonable estimate of income can be calculated from a choice between;

Please contact us at Nitro Accounting so we can help you work out how all this applies to your particular circumstances.

Low and middle income tax offset

Fri, 29 Nov 2019 22:00:00 GMT

Australian tax residents may be eligible for both the:

You don't have to do anything to claim the offsets as they are calculated automatically when the ATO processes your income tax return.

Tax offsets reduce the amount of tax payable on taxable income.

These are non-refundable offsets, so the following applies:

Please contact us at Nitro Accounting for more information.

Updating Business Details

Tue, 26 Nov 2019 22:00:00 GMT

If you have an ABN regardless of whether you are registered for GST, it is a legal requirement to update the Australian Business Register (ABR) within 28 days of any changes in your registered business details.

These include changes to your:

Please contact us at Nitro Accounting we can update that for you!.

Single Touch Payroll

Sun, 24 Nov 2019 22:00:00 GMT

If you are not prepared for single touch payroll then please contact us at Nitro Accounting for more information and to start making arrangements.

Company Loans

Sun, 17 Nov 2019 22:00:00 GMT

If you own a company, it is very important that if you owe the company money you need a written loan agreement with interest payable and repayments.

The loan is usually over 7 years and the ATO publish the minimum interest rate to be charged.

Please contact us at Nitro Accounting for more information.