Most businesses will be finalising their June BAS at the moment. Extra care needs to be taken with this BAS to ensure that you have everything correctly recorded for the year.
Increasingly, the ATO are matching data provided in your income tax return with the total of information returned in your business activity statements over the same year. Where they find material differences in the key numbers these differences can trigger an audit. Final revenue figures and inter-entity charges are key risk areas. Decisions about these charges and reconciled numbers should have been made by June 30.
You don’t have the luxury to wait until you finalise your tax return for the year. When you lodge your June BAS you have provided the ATO with a summary of your business income and expenses for the year. Make sure that your combined BAS for the year reconcile to your financial statements.
Tags: BAS | Tax & accounting compliance
Posted in Business Insight, Infotelligence |
The ATO are fairly up front. Every year they tell you what they are targeting and why. That’s why when the Tax Commissioner released his compliance program for 2010/2011, we took a keen interest in what he had to say.
The way the tax office catch tax evasion is more sophisticated and far reaching than ever. Last year, they utilised over 500 million transaction records from third parties. That is, bank details, international transactions, investments, welfare data, super fund information, luxury car and boat purchases, employee share scheme details, property data, are all used to make sure that the income you declare on your tax return is an honest assessment.
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Posted in Business Insight, Infotelligence |
Many companies have different classes of shares but when it comes time to sell, this share structure might be an impediment.
There are a number of reasons why differential share structures are used – the ability to provide different rights to equity holders and allowing dividends to be paid to one class of shareholder in preference to another are common reasons. Much of this comes down to the way the company is managed and the arrangements between shareholders. Having different share classes can provide an additional level of flexibility in the ownership of a company.
There is however one occasion where different share classes can work against you; when the company sells capital assets, triggers a capital gain and wants to reduce that capital gain by accessing the small business CGT concessions. The most common example of this is the sale of the business or shares in the company. The concessions are attractive because they can defer capital gains tax or reduce it to zero.
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Tags: CGT | CGT Small business concessions
Posted in Business Insight, Infotelligence |
The Tax Office has successfully obtained records from eBay and The Trading Post that will enable them to data match income declared by taxpayers to their income generated online.
Targeting those with earnings of $20,000 or more in any of the last three financial years, the ATO crackdown is looking for online operators who are effectively running a business but not declaring the income. The Tax Office also expects to catch existing businesses that are generating additional income through the trading sites but not declaring or understating the income.
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Tags: ATO | ATO Audit
Posted in Business Insight, Infotelligence |
Superannuation pension relief extended
At the start of the financial crisis in 2008, the Government announced that they would halve the minimum pension payment amount – that is the minimum amount of pension that you have to take from your superannuation fund. This concession was extended through to the 2009 financial year. The Government recently announced that they will again reduce the minimum pension amount for the 2010/2011 financial year.
In practice what this means is that if you are say 65 years of age on 1 July and receive an account based pension from your superannuation fund, the minimum you have to withdraw is 2.5% of the account balance (instead of 5%). The continued relief means that retirees do not have to sell investments at an inopportune time simply to comply with the regulations.
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Tags: Income tax | Superannuation | Tax & accounting compliance
Posted in Business Insight, Infotelligence |
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