Reminder the ATO is back to Business-as-usual debt collection.

ATO reminds Business to pay before they disclose their debts. 

(Announcement 6 October 2023).  

The Australian Taxation Office (ATO) is warning businesses to engage with their tax and super obligations to avoid having their debts disclosed to credit reporting agencies.

As the ATO shifts back to business-as-usual debt collection, as of July 2023 it has issued Notices of intent to disclose business tax debts to more than 22,000 businesses with a tax debt of at least $100,000 that is overdue by more than 90 days.

ATO Assistant Commissioner Jillian Kitto said paying or engaging with the ATO is the only way to stop a business’s tax debt becoming visible in credit rating checks. ‘We want to work with businesses to help them get on top of their debts. Anyone with a debt is encouraged to reach out to us as soon as possible,’ Ms Kitto said. 

Need help or advice.

Be proactive contact Blackburn Accounting for your Business accounting matters and Cashflow Management guidance. 

What it is, how it applies and what you need to do as an Employer!

 What is Fringe Benefits Tax?

• Fringe Benefits tax (FBT) is a tax paid by employers on certain benefits provided to their employees, or to their employees’ family or other associates.
• FBT is separate to income tax. It's calculated on the taxable value of the fringe benefit.
• As an employer, you must self-assess your FBT liability for the FBT year (1 April to 31 March). If you have an FBT liability, you must lodge an FBT return and pay the FBT you owe.

 What is a Fringe Benefit?

A fringe benefit is like a payment to an employee, but in a different form to salary or wages.

There are different types of fringe benefits. Examples include:

• allowing an employee to use a work car for private purposes
• car parking
• paying an employee's gym membership
• providing entertainment by way of free tickets to concerts
• reimbursing an expense incurred by an employee, such as school fees
• giving an employee a discounted loan
• giving benefits under a salary sacrifice arrangement with an employee.

Not a Fringe Benefit.

Examples that are not fringe benefits are listed on the ATO website.

Who receives Fringe Benefits?

It's that time of the year again, Tax-Time it's just around the corner.

Don’t put it off or file it in the too hard basket, start now with our,

6 Top Tips!

1. Getting ready is about getting your ‘house’, Business in order. Start by organising your paperwork.  If you have a 'shoe-box' or bottom drawer full of unsorted papers now is the time to start sorting and filing.   

2. A stress-less tax time is all about good record keeping. You need to account for every dollar that comes in and out of your Business! Make sure you have the ‘evidence’ to back your claims!

3. Missing copies of claimable receipts or expenses records, follow-up now to avoid panic later.     

4. Working from home, remote flexi arrangements, keep copies and record any related expenses for 'end of year' deductible claims. 

5. Have you checked if there are any Government incentives and initiatives for small Business?  Have you received any concessions? If so, are there reportable implications!

6. Do you have any questions regarding your Taxation obligations, not sure what a legitimate claimable expense is or are needing help with bookkeeping, payroll systems and processes! Contact Blackburn Accounting, we are 'Your Family Business Specialists'.

On 9 May 2023, as part of the 2023–24 Budget, the Australian Government announced it will improve cash flow and reduce compliance for small businesses by temporarily increasing the instant asset write-off threshold to $20,000, from 1 July 2023 until 30 June 2024. 

This measure is not yet law.

Small Businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024.

 The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

 Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year after that.

Individual income tax rates and threshold changes

On 25 January 2024, the government announced proposed changes to Individual income tax rates and thresholds from 1 July 2024. These changes are not yet law.

From 1 July 2024, the proposed tax cuts will: 

• reduce the 19 per cent tax rate to 16 per cent
• reduce the 32.5 per cent tax rate to 30 per cent
• increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000
• increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000.

For more information see Tax cuts to help with the cost of living | Treasury.gov.au

The ATO is warning Business that pay contractors to provide certain services to lodge their taxable payments report (TPAR) for 2023.

The TPAR is used to report the payments made during the financial year to subcontractors or contractors. It is due on 28 August each year.

 Be aware, from 22 March 2024, the ATO will apply penalties to those Businesses that haven’t lodged their TPAR from 2023 or previous years or have received three reminder letters about overdue TPAR.

If this is you, act now to avoid paying penalties.

Other – Outstanding Debts

From January 2024, the ATO has an external debt collection agency actioning tax cases they have referred.

This will apply to Taxpayers who haven’t responded to previous ATO contacts attempts or referral warning letters and are not engaged in debt repayment.

Don’t wait, contact the ATO or speak with our team at Blackburn Accounting asap.

Unsure of your responsibilities or what to do?

Need help!

Contact Blackburn Accounting we understand taxation matters,

or contact the ATO directly or check their website for further information. 

• ATO ramps up warnings on $50b in tax debts. 

This warning from the new Tax Commissioner as the ATO chases $50 billion in outstanding debts, claiming increasing numbers of Australian small Businesses operators are falling behind on tax and superannuation obligations. 

• At a recent small Business summit in Sydney the Commissioner said ‘it’s critical that all employers, big and small, keep on top of their obligations to their employers first and foremost, as well as their obligation to government in respect to GST, income tax and other taxes’. 
• Previously, in November, the ATO warned Business to stop using unpaid tax and superannuation liabilities to prop up their cash flow, stressing its debt book was not a bank.  

If these matters concern you, act now, heed the warnings!  

Need help? contact Blackburn Accounting, we are experts in taxation matters.

• Tax Debts can affect your credit ratings 

Disclosure of Business Tax Debts: 

Be aware that in certain circumstance the ATO may disclose your debt information to credit reporting bureaus (also known as credit reporting agencies).

The ATO lists a number of criteria where they may report your Business tax debt. These are provided on the ATO website.

 Note: It will not report your debt information to credit reporting bureaus (CRBs) if you are already engaged with them to manage your tax debts and may also decide not to report your tax debt information if you are experiencing exceptional circumstances.

You can find full details on the ATO website.

More from the ATO

If you are one of the many Taxpayers hoping for a tax refund it is crucial to submit your return ‘right’!

That is, submit it with all the necessary supporting documentation. This step can save you and the ATO time and effort.

And with Tax Time fast approaching,

• it is a timely reminder to start now and get your ‘paperwork in order’.  
• Also, make sure you have all the ‘evidence’, such as receipts, to substantiate your claims for deductions.  This applies to all claims.
• Be aware, the ATO recently announced it is putting the microscope on tax deductions. Remote workers, landlords and workers taking a liberal approach when claiming travel expenses can expect scrutiny as part of a compliance crackdown. 
• Have a job second that generates income remember to declare it! Freelancers, Influencers are also on the ATO's radar. 
• Taxpayers, those ‘work-from-homers' are reminded of the changes to the generous tax concessions offered during the pandemic. Changes, effective from March 1 this year. Anyone making these claims must now prove how much time they spent working from home and what were actual work expenses, not to be confused with household expenses.

 To claim or not to claim! 

It’s important to know what a legitimate claim is and isn’t and that can be confusing. Avoid mistakes, if you need advice contact Blackburn Accounting, we are experienced and available to help you maximise your return within the ATO guidelines.   

With costs of living spiraling what better way to add to your cashflow than with a tax refund cheque!