The Australian Taxation Office has announced its targets for 2011/12. This summary relates to the Taxation Office's indicated targets for individuals, micro-businesses (turnover up to $2M), small/medium enterprises (turnover $2M to $250M). The key areas that the ATO are closely examining are:
- work-related expenses - this includes claims for home office expenses, internet connection, mobile telephone costs
- overseas income - remember the ATO has very sophisticated systems to track money moving overseas
- split loans (business and private loans are attracting greater attention)
- correct PAYG Withholding Tax deducted from wages
- superannuation payments made
- "sham" contracting - i.e. if someone is working for your business fulltime, it's very difficult to establish that they're a bona fide contractor
- internet trading
- cash businesses; and
- in all cases, the ATO is comparing micro and SME businesses to the benchmarks that they've established for the various industries.
- The ATO is also very concerned about Phoenix Company activities where a company is liquidated and then basically commences business under a new name the next day.
- The ATO is also monitoring shareholders' loans and small business capital gains tax concessions.
If you have any concerns on any aspects of your taxation affairs, please don't hesitate to contact us.
Carbon Tax Planning - What Does It Mean?
Whether you agree with the carbon tax or not, the reality is that the government has said it will commence in one year's time... in fact, only 10.1/2 months time now, so all small/medium enterprises need to get ready for it.
It will be a good idea to review your costs of operation to isolate the items which might increase because of a carbon tax. These will primarily relate to fuel prices and electricity, but in some instances, could be affecting other cost inputs for your business.
There may be an opportunity for you to change your fuel/electricity usage so as to reduce costs in this area.
The government is very confident that it can pass the legislation to commence from the 1st July 2012, so now is the time to review all of your operations to see what the extra cost inputs might be and to determine whether you're able to offset those costs by other cost reductions or will you be able to pass on the extra costs to your customers.
New This Year to Family Tax
There are a nubmer of tax changes that apply to families from 01 July 2011
- Education Tax Refund (ETR) - Inclusion of School Uniforms - Families can include school-approved uniforms purchased from 01 July 2011 in the expenses that are eligible to claim ETR. Families have to be eligible for Family Tax Benefits Part A to be eligible to claim ETR.
- Dependent Spouse Tax offset Phase-out - From 01 July 2011, taxpayers can only claim dependent spouse tax offset for a souse born before 01 July 1971. There are some exceptions.
- Changes for Minors Low Income Tax Offset - From 01 July 2011, children under 18 years of age will no longer be able to access low income tax offset to reduce tax payable on their unearned income (e.g. trust distributions, dividends, interests, rents...)
- Medical Expenses Threshold - Taxpayer can claim 20% tax offset of their net medical expenses over a set threshold. This threshold is indexed and change each year. It is $2,060 for financial year 2011-2012.
- Baby Bonus -This scheme has closed. 2008-2009 was the last year that it could be claimed through a tax return. Late claims will be accepted until 30 June 2014. It has to be made by paper forms and mail to the ATO.
- Paid Parental Leave - Eligible working parents will receive paid parental leave pay for a maximum of 18 weeks at minimum wages.