Pay as you go (PAYG) instalments is a system for making regular payments towards your expected annual income tax liability. It only applies to you if you earn business and/or investment income over a certain amount.
It’s safe to say Australia has a penchant for small business.
Around 90% of Australian businesses are small to medium-sized entities (SMEs). Taxes on small business are lower than they’ve been in the last decade. It’s one of our healthiest and fastest growing sectors.
Have you ever let a room on the popular accommodation site Airbnb? Thinking of sharing a ride with pseudo taxi service Uber?
If you participate in what’s now called the “sharing economy”, you may have some tax to pay.
With the Uber-GST stoush mostly settled, the Tax Office has offered an olive branch to another high-profile disruptive economy -crowdfunding – in the form of provisional tax guidance that promises things will change if they need to.
Historically the Tax Office’s stance on crowdfunding has been narrow but definitive. Late last year, the regulator said crowdfunding activities would likely incur GST liabilities if they involved exchanging goods for donations. It’s common that ‘promoters’ (the individuals asking for donations) offer ‘funders’ prizes for their contributions and the Tax Office saw that occurrence as a taxable consideration. That applied only to goods, though.
The Tax Office warns that it is working closely with AusIndustry to identify taxpayers involved in aggressive R&D Tax Incentive arrangements.
The ATO says some claims made for the R&D incentive have been negligent on the compliance requirements generally expected when making a claim, with some other instances even bordering on tax avoidance and fraud.
You are allowed to disagree with the Tax Office, if they have disagreed with your self-assessment of your tax position.
If you believe your tax assessment is incorrect, the first step is straight forward and pretty informal. You contact us and we start making enquiries; you may need to provide us with extra information to help. If we believe the assessment is wrong we can lodge an amendment with the Tax Office (see our post Making an amendment to your tax return).
Once we have lodged your 2014-15 tax return and forwarded your notice of assessment to you saying that everything is as discussed, you may realise that something has been left out of your tax return or accidentally included an extra deduction. You might be left wondering “how do I amend my tax return?”.
The Australian tax system is based on “self assessment”, which means the Tax Office generally takes your word, under our guidance, and bases its assessment on the information provided. But if it subsequently becomes apparent that something is wrong, there is an option to make it right.
Our post-budget wrap up looked at many of the announcements affecting small business with the “Growing Jobs and Small Business” package announced by the government on budget night. You can read more about the small business concessions at business.gov.au.
Now the legislation that many small business owners will be glad to see in place has made it through Parliament.
It’s something of a little white lie, isn’t it? — the one told to aspiring small business owners and entrepreneurs that hard work guarantees success.
Hard work is vital, but it’s not the only quotient.
In an unprecedented first for small business tax compliance, the Tax Office has revealed it will chase up incorrectly disclosed income and match it to credit card and debit card records throughout the 2014-15 financial year.
As part of the blitz, the Tax Office will ask major Australian financial institutions for the online purchase details of around 90,000 business-owning taxpayers.