Simpler BAS for small businesses

The ATO have introduced a simpler BAS to take effect from 1 July 2017 to help reduce GST compliance costs for small businesses. From 1 July 2017, small businesses will only need to report GST on sales (1A); GST on purchases (1B) and Total sales (G1) on their BAS. Businesses will no longer need to…

Guide to tax-deductible gifts

Giving to charity this Christmas is a great way to give to those less fortunate while receiving some extra tax perks. Charitable donations are tax deductible which only adds to the incentive to be generous this holiday season. Here are some tips for maximising your tax breaks on charitable donations: The charity must be registered…

Common GST mistakes

Despite the Australian Tax Office’s education campaign on GST reporting, many small business owners continue to make errors when claiming GST credits in their GST returns or Business Activity Statements. The vast majority of errors are easily unavoidable and relate to the over-claiming of GST credits. Here are the top ten common GST mistakes: Residential…

When to charge GST

If your small business is registered for GST (Goods & Services Tax), most of your sales in Australia will include GST. Sales which include GST (taxable sales) are: – made for payment (monetary or other) – made in the course of operating your business (including any capital assets sold) – connected with Australia For these…

ATO provides further guidance on SMSF related party arrangements

The ATO has provided further guidance regarding limited recourse borrowing arrangements (LRBAs) and when non-arm’s length income (NALI) rules apply to a related party LRBA. The Tax Office recently released a Taxation Determination (TD 2016/16) and updated their Practical Compliance Guideline (PCG 2016/5/) to provide further clarification concerning the circumstances where a self-managed super fund…

ATO crackdown on trusts

The ATO is currently targeting contrived trust arrangements that minimise tax by creating artificial differences between the taxable net income and distributable income of closely held trusts. Arrangements where trustees are engineering a reduction in trust income to improperly gain favourable tax breaks or pay no tax at all are being targeted by the Tax…

Income tests for tax offsets

Income tests are used to work out a person’s eligibility for tax offsets and benefits which can reduce the amount of tax they have to pay. The Australian Taxation Office considers various items from a person’s tax return when applying income tests. For example, a number of offsets, benefits and obligations are assessed using a…

Claiming tax offsets and rebates

Tax offsets (also known as ‘rebates’) can directly reduce the amount of tax payable on a person’s taxable income. While claiming certain tax offsets can reduce a person’s tax payable to zero, on their own, they cannot create a tax refund. Here are three common types of tax offsets some individuals are eligible to claim:…