By Joe Smith
A few people have wished me a Happy New Financial Year and while there are things that we have to look forward to in this financial year, there are quite a few things to look out for to ensure it is a Happy New Financial Year!
As usual the ATO have advised us of the areas that they will be targeting in individual tax returns lodged this year. These include claims for work related travel, uniform and clothing expenses as well as home office expense claims, just to name just a few. The most important piece of advice that I can give you in relation to these claims is to have detailed records to substantiate claims for any amounts spent. Further to this, if you lodge your tax return through a reputable tax agent then they should keep detailed records to substantiate claims being made.
Small business owners are also in the crosshairs of the ATO with a focus on unexplained wealth which they have mentioned. They are using social media to monitor displays of wealth that do not match income on the business owner’s tax return! The ATO are really getting tech savvy these days and the cash economy is one area where they see they can gather a significant amount of unpaid tax with not too much effort.
There are also quite a few Bills that have not passed through parliament before the winter break that may affect tax returns being lodged in the next month or two. Some of the major Bills are the Superannuation Guarantee Amnesty, the extension of the $20,000 instant asset write off and changes to the passive income test regarding the 27.5% tax rate to determine the franking rate for distributions to shareholders.
In particular, if you plan to take advantage of the Superannuation Guarantee Amnesty we suggest that you consider the timing of making disclosures to the ATO before the Bill becomes law as if this does not pass the Senate then fines and penalties may apply and will be non-deductible.If you would like a no obligations chat with us regarding any of these issues, please call or email us at UHY Haines Norton Gladstone on 4972 1300 or email email@example.com