ARGO Business Solutions June 2017 Newsletter

Welcome to the June 2017 Newsletter, we hope you find the enclosed articles and items useful and beneficial in managing your taxation affairs.  If there is anything that prompts your interest please don't hesitate to contact us.

TAXATION NEWS

ATO warning on holiday rental claims Small Business' Opportunity to for Instant Asset Write-Off before 30 June 2017
Are You Working as an Uber Driver? - Be aware of the ATO's Intended Data Matching Activities

The ATO has issued a media release warning taxpayers not to make incorrect tax claims for rental properties, particularly holiday homes. Compliance is a problem in this area where deductions for holiday homes are claimed even if the property is not genuinely being rented out.  Home owners can only claim tax deductions for expenses made during a period when the home is rented out or genuinely available for rent. Property owners are advised that if they rent their property at a discounted rate, they can only claim deductions equal to the amount of rent charged.  Technology enhancements and extensive use of data is allowing the ATO to identify incorrect or suspicious claims.  Rental property owners, particularly those who rent out holiday homes, should declare all rental income and only claim deductions for periods that the property is genuinely available for rent and they should keep accurate records of expenses, and strong evidence of the property being rented or genuinely available for rent at market rates. Advertising through a real estate agent or an online site is not always enough evidence that a property is genuinely available for rent.

The $20,000 instant asset write-off for small business will be extended by 12 months to 30 June 2018, for businesses with an aggregated annual turnover of less than $10m.  Small businesses will be able to immediately deduct purchases of eligible depreciating assets costing less than $20,000 provided they are first used, or installed ready for use, by 30 June 2017 and 30 June 2018. Only a few assets are ineligible (such as horticultural plants and in-house software).  If you buy an asset before 1 July 2017 and it costs less than $20,000, you can immediately deduct the business portion in your 2017 tax return.

The ATO has given notice (in Government Gazette C2017G00611, 5 June 2017) that it is expanding the scope of the data matching program, announced in December 2016, to identify individuals engaged in providing ride-sourcing services. Data will be required for an additional 12 months, ie for the 2016/17, 2017/18 and 2018/19 financial years.

Ride-sourcing facilitators (for example, Uber) and/or their financial institutions will be requested to provide extra details to identify ride-sourcing providers (drivers) and about payments to drivers from identified accounts. Ride-sourcing facilitators provide an electronic platform enabling members of the public to engage the services of a ride-sourcing provider (a driver).

 

Travel deductions for rental properties removed
Into the Future! - Tax crackdown on 'systemic rorting' of work expenses urged
Deductions for travelling to a residential rental property will no longer be allowable for individuals after 1 July 2017. This removal is for individuals travelling to collect rent, maintain the property or complete an inspection.

Announced in the 2017/18 Federal Budget, this removal allows only a short period before 30 June for your clients to obtain a final deduction before the change.

Accordingly now is the time to complete any travel to your investment properties to maximize your 2017 deductions.

 A parliamentary inquiry and an OECD expert are urging the Australian Tax Office to crackdown on the $20 billion in annual work-related expense claims, amid fears they are being systematically rorted.

The House of Representatives economics committee heard the ATO identified $100 million of abuse in a single year and about one in 1000 taxpayers was over-claiming. In light of these figures, the ATO should be instructed to identify areas "particularly open to systemic abuse and over-claiming", the committee chaired by Liberal MP David Coleman said in a report.
"The committee sees considerable scope for improvement in this area and has recommended the ATO review its compliance activity" in relation to work expenses.

Tax administration specialist Richard Highfield said over-claiming of expenses could be costing Treasury up to $1.2 billion a year, and the biggest rort was car expenses. "When you bear in mind that travel to and from work is not deductible it's very hard to rationalise how almost one in three employees can justify use of their car for their work.

Read the full article in the Australian Financial Review http://www.afr.com

 

 ATO warns against incorrect claims for work-related expenses

The ATO is warning taxpayers to avoid incorrect claims for work-related expenses. Assistant Commissioner Kath Anderson noted that the ATO is using real-time data comparing taxpayers in similar occupations and tax brackets, which will enable them to identify higher-than-expected deductions claims.

The ATO notes in particular that:
• although receipts are not required for claims up to $300, it is a requirement that the taxpayer actually spent the money claimed, and taxpayers need to be able to demonstrate how they calculated a deduction of up to $300 if no receipts are retained
• it is not generally allowable to claim a deduction for everyday clothes even if the style of clothes is specified for the employer and the clothes are only worn for work - to qualify for an allowable deduction, the clothes must be unique and distinctive (eg a uniform with the employer's logo) or specific to the occupation and not suitable for everyday use (eg chef's pants or coloured safety vests)
• most employees will not be able to make claims for:

– travel expenses for travel between home and work
– car expenses for transporting bulky tools or equipment (unless the tools are needed for the job and the employer requires the employee to transport them)
– car expenses that have been salary sacrificed
– meal expenses for travel, unless the employee was required to work away from home overnight
– the private portion of a trip that is both for work and for private purposes
– private use of phone or internet expenses, or
– self-education expenses for future or "dream" jobs.

 

 SUPERANNUATION NEWS

 

Thinking about retirement, how is your superannuation looking?  Is operating a Self Managed Superannuation Fund (SMSF) an option?  Speak with ARGO Superannuation Solutions (AFSL 489126) about whether establishing a SMSF is right for you.

 

  Personal Superannuation Contributions to become Deductible Member Balance Cap of $1.6m
Concessional Contribution Cap to Reduce to $25,000
 From 1 July 2017 all taxpayers who make personal (concessional) superannuation contributions will be able to claim a deduction for such contributions.  These contributions are in addition to your employers compulsory 9.5% contribution. 

Speak with ARGO Superannuation Solutions to assist you with identifying whether any additional personal contributions to superannuation will be beneficial and within your budgetary capacity.
From 1 July 2017 the total limit on capital an individual can transfer to the retirement phase of superannuation to support a superannuation income stream that benefits from the earnings tax exemption will be limited to $1.6m.

How much do you have in super?  Some may be closer to the $1.6m cap than they think?  Once your member balance reaches $1.6m you WILL NOT BE entitled to make any future non-concessional contributions to superannuation.
 From 1 July 2017 your total concessional contributions will be reduced to a cap of $25,000.  This cap will include both your employer contributions and any personal contributions you make.

Let ARGO Superannuation Solutions assist you with planning your concessional contributions

 

STAY CONNECTED

 Stay connected with your Trusted Business Advisor by downloading the ARGO Business Solutions App.

 

 

 https://itunes.apple.com/au/app/argo-business-solutions/id1184382881?mt=8

  

 https://play.google.com/store/apps/details?id=com.app.p1145BH

 

This APPLICATION will provide you with greater connect-ability and facilitate timely sharing of information. Some of the key features are:

  • ability to request an appointment or refer a colleague or friend
  • ease and convenience to access on-line resources such as calculators, tools, government services, financial news and more
  • receive reminders and information updates via the "Push Message" function
  • send short messages via the "Voice Memo" function
  • access to the latest events that affect your business and taxation affairs via the "Tax Alert" and "Bus Alert" functions.
  • Tired of storing receipts and invoices in a shoe box; use the "Quick Scan" function to upload your receipts to us anytime during the year
  • Needs to sign documents on the move, ARGO Business Solutions can now get you to sign these using the "Quick Sign" function; simple and easy

To obtain full functionality from the APP we recommend once you have downloaded the APP click on the information icon and complete your registration details and submit for registration.


To maintain full use of the APP we recommend once registered, stay logged-in with the App open in the back ground. This will ensure you receive updates and notifications instantly; the App will not affect your data plan.

 Thank you for taking the time to read our Newsletter,  if you have any questions, comments, suggestions, please don't hesitate to contact us at any time. We look forward to hearing from you.

Kind Regards

The Team
Argo Business Solutions 
http://www.argobusinesssolutions.com.au