All board posts in Business

Re: Payment reference numbers

KylieS — Fri, 28 Feb 2020 00:09:08 GMT

Hi ,

Will check it out.

KylieS

Re: Buying stock from a non-GST registered business and selling as a GST registered business

JasonT — Thu, 27 Feb 2020 23:56:24 GMT

Hi ,

It's interesting that the business you purchase the used vehicles from is not registered for GST.

An entity is required to register for GST if:

they are carrying on a business or enterprise, and
the GST turnover is at or above the GST turnover of $75,000.00 or $150,000.00 for not-for-profit organisations

The description you've provided for the business you purchase the used cars from doesn't sound like it would meet a GST exemption.

As a GST registered entity you will be required to charge GST when you sell the vehicle, unless an exemption applies.

Representing the information on your BAS:

The purchase of the vehicle at G10
The sale of the vehicle at G1
The total amount of GST (including any adjustments) you need to pay us for the reporting period at 1A

Which BAS period you report the purchase and sale on will depend upon your accounting method for GST.

Let us know if you have any further questions,

JasonT

Re: Wages paid to Individuals who are employees of another company

TaxedoMask — Thu, 27 Feb 2020 23:29:27 GMT

As this is hypothetical - the first question is why would you do this? What is your aim? Also are these entities in a TCG or standalone? Are they related entities?

Generally Company A would not pay for Company B's expenses unless Company A is using the employees of Company B. in which case Company B would charge Company A and not the other way around.

Re: Payment reference numbers

Laura2 — Thu, 27 Feb 2020 23:22:59 GMT

Hi Kylie

I had a phone call from the ATO yesterday and they asked me to send through the payment slips. They said they would send me an email to respond to but I have not received anything yet. Could you please check if this has been sent or let me know where to send these slips?

Thank you

Re: Payment reference numbers

KylieS — Thu, 27 Feb 2020 23:07:19 GMT

Hi ,

We are investigating the issue and will give you any information as soon as it has been provided to us.

Can you let us know if anyone else has the situation that payments error and don't go through. Nothing personal as we want to protect everyone's privacy as this is a public community.

and we will defiantly be in contact if we need further information to assist in the investigation.

KylieS

Re: Payment reference numbers

Cat_Hartigan — Thu, 27 Feb 2020 22:54:07 GMT

I haven't heard anything as yet. I received an email last Friday asking for my contact details so they could get in touch about it. I replied straight away but still haven't been contacted a week later.

Given that BAS and payments are now due, it's very surprising the ATO hasn't acted sooner on this. My concern is that this could cause payment plans to default if people don't realise their PRN has changed, and their payment isn't allocated to the right account.

Re: Payment reference numbers

MAldridge — Thu, 27 Feb 2020 22:38:26 GMT

Is there an update on this situation?

We have several instances where the payment reference number has changed for our client, as well as our own.

Cannot find any ATO communication/notification on this.

Re: Invoice in another language

KylieS — Thu, 27 Feb 2020 22:12:05 GMT

Hi ,

Great question.

If you are required to provide them as substantiation of an expense they would need to be translated.

KylieS

Invoice in another language

lapple0128 — Thu, 27 Feb 2020 09:59:09 GMT

Hi Everyone
I am a sole trader and not registered for GST. I recently purchased some goods from overseas and the invoices I received were not in English. Just checking if invoices in another language are acceptable to the tax office?
Thanks a lot!

payment summary issued for the wrong year by employee

toby — Thu, 27 Feb 2020 08:09:00 GMT

Hi,

I worked for a company that issued me with a second payment summary after changing their payment system and needing to reconcile it. eg they had misreported to the ATO and in fact, I had earnt a few thousand more, this is true the first payment summary was short of my full earnings. I am fine with this, mistakes happen. However, what the issue is, is that they put the second payment summary in the next tax year. I did not work in this tax year for them. In fact, my employment had finished months earlier. Details are as follows I finished work in February 2018 as I was made redundant issued with payment summary all ok. Then in 2019, they issue another payment summary as they had underreported in 2018. This has tax implications for me which I do not feel I should have to bear the costs for as it was not my mistake. Is there anything I can do, so my tax filed can be true to the income I earnt it in.

Re: RAM Setup

DebC — Thu, 27 Feb 2020 06:41:37 GMT

Thank you for your post!

You may be using these instructions on our website already but I find them the easiest to follow and goes through the process step by step from beginning to end Principal Authority – link your business.

Another possible solution is to refresh your system as a slow internet connection can cause it to take a long time to link.

Hope this helps!

Regards

DebC

Re: RAM Setup Error Code

NateH — Thu, 27 Feb 2020 06:35:19 GMT

Hi ,

Yes so long as the copies are certified, they meet the criteria listed on page 2 of the form you submitted.

At this stage we are not sure on the exact time frames for processing the forms, give it a little while and if you haven't heard anything contact the help desk.

Thanks, NateH

Re: Family Member lead money to help business

ChrisR — Thu, 27 Feb 2020 05:57:41 GMT

Thanks for your question.

From what you have advised it doesn't sound like there will be any tax implications for you or your parents. You can check out the following pages on our website for more information:

Also check out the information from the other thread that you have posted your question in: Loan from parents

Hope this helps.

Thanks,

ChrisR

Re: GST - electronic distribution platform operators

MayW — Thu, 27 Feb 2020 04:45:06 GMT

Thank you for your post.

As your question is not stating a specific product the following is general.

For an entity to charge Goods and Services Tax (GST), they must be registered for GST.

Hope the information about GST and second-hand goods on our website helps.

Thanks
MayW

Wages paid to Individuals who are employees of another company

ijaz_aziz — Thu, 27 Feb 2020 04:32:23 GMT

This is a hypothetical question with these facts:

Company A would like to pay the wages/withholding tax/super etc to employees of company B.

The employees would be formally employed by Company B however, Company B is not set up for payroll, they require Company A to perform the payroll function of company B until such time that Company B is set up for payroll, e.g. single touch payroll, IT withholding, super etc.

During this time, Company A would charge Company B a fee for all costs associated with this arrangement.

Is there an issue with this arrangement? In particular, can company A pay and report the wages paid to employees of Company B in its payroll if the employees are not formally employed by Company A.

Thanks,

Jaz.

MYGOVID system error UNK000001

LS1 — Thu, 27 Feb 2020 04:28:44 GMT

Like many others, I am having trouble setting up the MYGOVID app.

I have tried EVERYTHING suggested (numerous times) to get it running.

I have uninstalled and reinstalled the app. I have cleared the cache and data. I have checked the dates and languages. I have double checked that the data I am entering is correct. I an STILL getting the UNK000001 error.

I have a Levono tab7 (Android 7)

Please help!!!

Re: Exempt Scholorships

TaxedoMask — Thu, 27 Feb 2020 03:41:14 GMT

Use the ATOs tool here to check if the receipient needs to treat the amount they receive as taxable income.

The funds does not need to come from a school. A nfp/scholarship fund can provide scholarships too.

Re: Tax Deduction for removal of Horticultural Plants

MayW — Thu, 27 Feb 2020 03:40:12 GMT

Please visit our website for information how you can claim a deduction for the decline in value of horticultural plants.

Hope this helps.

Thanks
MayW

Re: Tax deductions

TaxedoMask — Thu, 27 Feb 2020 03:28:37 GMT

No, private or domestic expenditure is not deductible, no nexus with the derivation of income.

Re: Newzealand dividends paid to Aust Trusts

TaxedoMask — Thu, 27 Feb 2020 03:14:35 GMT

NZ div: treat as Foreign Income.

Withholding tax: treat as Foreign income tax offset.

Normally Gross less WHT = net. not sure how you got the numbers as it doesn't tie up.

Newzealand dividends paid to Aust Trusts

Derek — Thu, 27 Feb 2020 02:48:13 GMT

Hi, I hold shares in Auckland Airport (ASX: AIA), within a family trust. I'm unable to find on the ATO website how to report my NZ dividends, what supplementry forms to use (if any), and what I need to show, not show or claim. An example of the dividend is (in A$)

Security, rate, shares,declared Div, Supplementary div, withhold tax, imputation credit, gross taxable Div, net payment

Full Ord , 0.10, 750, $79.08 , $13.69 , $13.69 , $16.79 , $93.04 , $ 79.08

For each item above where do I show it on the Trust Tax Form, what do I leave out and what can or can't I claim.

Much Appreciated

Tax deductions

Bush66 — Thu, 27 Feb 2020 01:56:45 GMT

Can a psychologist who works from home claim Gym Hire Equipment as a 'self care' deduction?

Re: Loan provided to the company by the shareholder/director/employee of the company

Mark029 — Thu, 27 Feb 2020 01:11:57 GMT

Hi.

Does it make a difference in the process if the one giving out the loan is a business entity (not under the director's or employee's name), who is also a shareholder of another company that was asking for a loan?

What interest benchmark do we follow at this rate, is it the one under Div7A https://www.ato.gov.au/Rates/Division-7A---benchmark-interest-rate/ which is 5.37%.

It might be a newbie question, but is the 5.37% interest a yearly one or a monthly interest?

Can anyone please assist. This is sorta urgent. I have called ATO for clarification, but I was just transferred line after line.

Thank you.

Re: GST Being Charged in USD

TaxedoMask — Wed, 26 Feb 2020 23:29:17 GMT

Aside from dubious nature of MLMs (see here), high levels of loss for "downstream" participants (see here) and it's similarities to pyramid schemes (see here). The importation of goods (assuming we're talking about physical products) to Australia is generally subject to GST. See here.

I would strongly advise you to consider what you are doing as part of a MLM scheme given the significant number of horror stories.

Re: Significant Global entities & Joint Ventures

NateH — Wed, 26 Feb 2020 23:22:29 GMT

Hi ,

We'll check on this for you and get back to you

Thanks, NateH

Re: New credentials without smartphone

KylieS — Wed, 26 Feb 2020 22:00:06 GMT

Thanks for your feedback.

AUSkey was released over a decade ago to enable business to transact online with Government. The system has not kept pace with modern advances in technology or expectations of the community, and there are a number of issues, including:
• incompatibility with most modern internet browsers
• the requirement for a separate AUSkey for every business a person acts on behalf of
• not available on mobile devices
• difficulty installing and recovering when a password is forgotten.

In addition to user irritants there are significant issues with the misuse of the AUSkey system, including the sharing of credentials and passwords which compromises the integrity of the ATO online environment.

We already conduct proof of identity checks and have a strong history of protecting client data. As we offer more online services to the community with greater access to personal data, a higher degree of certainty of the person interacting with us is required.

AUSkey and Manage ABN Connections (MAC) access to our online services will end on 27 March 2020, replaced with myGovID and RAM. myGovID is a digital identity credential that is unique to an individual, similar to completing a 100 point ID check RAM allows a user to link their myGovID to an ABN.

Your myGovID is unique to you and cannot be shared to ensure the safe keeping of your data and integrity of ATO online systems. Accessing myGovID via a smart device allows use of the identification and security features provided by the smart device – like fingerprint and face verification to provide additional protection of your identity. The myGovID app is only required for the log in step and a user can continue to use their preferred device and browser when accessing online services. This means you can access online services on any device or browser and are not restricted to use on a desktop computer or laptop. It also provides a simpler way to set-up and manage your access and you no longer need to request and setup a new AUSkey when you forget your password.

To setup a myGovID and log in to ATO online services you will be required to verify two of the following four identity documents:
• Australian passport
• Medicare card
• Australian drivers licence
• Australian birth certificate

Additional identity documents, including change of name certificates, marriage certificates and immigration documents will be progressively supported from mid-March 2020.

If you don’t have two of the identification documents required, you may be able to use myGovID with a Basic identity strength to access many ATO online services from mid-March.

Relationship Authorisation Manager (RAM) allows you to set up and manage relationships and authorisations across government online services. You control who can act on behalf of your business online. It gives you greater assurance and visibility over who is transacting on behalf of your business. Linking associated ABNs to your myGovID means you no longer need to setup and maintain multiple AUSkeys for each ABN you are authorised to represent. You only need one myGovID.

If you are operating through a trust we have help available to link your myGovID to your ABN.
Contact our support line and choose option 3 if you have five or less ABN’s to link. We are currently contacting Corporate trustees with more than five ABN’s to create these links for them, as this process will take a little longer.

We hope this helps clarify why we are making the move to myGovID and RAM as well as answer your questions. You can find more detail and links to other resources on our Accessing online services with myGovId and RAM page.

Exempt Scholorships

Lozza18 — Wed, 26 Feb 2020 21:48:53 GMT

Hello,

For a scholarship to be tax exempt to the recipient, I understand the following:

To be eligible for tax exemption, a scholarship, must be open to a wide range of candidates.

Scholarships are exempt from PAYG withholding and personal income tax where payment is:

made to a student receiving full time education, that is, undertaking a full-time course
not received ‘on the condition’ that they become, or continue to be, an employee
principally for educational purposes
does not have any requirement attached that amounts to the student having to render services.

My question is, does the scholarship have to come from a school, college or university or can any entity give a sponsorship that can be exempt to the recipient? What are the criteria for the entity giving the scholarship for it to be exempt to the tax payer?

Thanks

Re: Probe security questions

AJ456 — Wed, 26 Feb 2020 12:22:26 GMT

Accessing any ATO information requires passing an ID check with a sufficient number of points of ID. The questions are not from Probe, the ATO specifies the questions. You'll get asked very similar things when calling the ATO.

Re: Meals & Entertainment

Glenn4802 — Wed, 26 Feb 2020 10:14:59 GMT

FBT is not applicable to a sole trader, assuming they don't have employees.

If an amount is not considered entertainment, an income tax deduction and GST input tax credits can be claimed. For entertainment expenses, you can't claim a deduction or GST credits.

Scenario 1 might be entertainment, depending on the extent of food and drink provided. Some meetings might be entertainment and others not.

For scenario 2, expenses relating to the owner would not be entertainment unless a meal was very extravagant and/or associated with a show. Expenses relating to her partner would be entertainment. For accommodation, only the additional cost relating to the second person would be relevant e.g. if a room cost $100 if one person stays and $110 for two people only $10 would be considered entertainment.

Whether food or drink is entertainment is discussed in TR 97/17. Read the early paragraphs and the table in paragraph 25 to get a good idea of what is considered entertainment. Similar information is included on the general ATO website, but this mainly relates to employers and might be confusing as it contains lots of FBT references.

Small Business Capital Gains Tax Concessions - Passive assets - Business conducted by affiliate or c

Bannisterjbb — Wed, 26 Feb 2020 10:14:36 GMT

Hi,

To satisfy the basic conditions for SBCGT Concessions the asset must be an active asset.

The asset which is to be sold is owned by a company which does not carry on a business.

The asset is used exclusively in a business conducted by a discretionary trust which has a turnover of more than $2 million.

The 2 shareholders in the company control the trust and have received all distributions from the trust equally.

Net asset value of all connected entites and affiliates does not exceed $6 million.

Section 152.10 (1A) provides that if the taxpayer (the company) does not carry on a business the basic conditions are satisfied if an affiliate or connected entity of the company is a CGT small business entity.

Does this mean that because the trust is not a small business entity that the samll business CGT concession cannot be claimed even though the net assets or all connected entites and affiliates do not exceed $6 million?

Re: Meals & Entertainment

Aphrodite — Wed, 26 Feb 2020 08:44:55 GMT

Yes of course - I forgot to say that it is a sole trader.

GST Being Charged in USD

heleneanne65 — Wed, 26 Feb 2020 08:26:23 GMT

Hi guys! I am part of an MLM that is relatively new in this country and everything is charged in USD including the GST, Is this ok? How does an Australian tax get charged to us in USD? Thanks guys!

Re: Meals & Entertainment

Glenn4802 — Wed, 26 Feb 2020 07:48:52 GMT

The answer will vary depending on whether the business is in the name of the individual or if it sits in a company or trust.

hobby income basketball referee

johndunneone — Wed, 26 Feb 2020 07:05:54 GMT

from a tax declaration iam a hobby

iam a basketball referee i do that for basketball sa in south australia

i like to now were i stand when i and going to earned $250 a week for this year which equates to $16,000 dollar per year

I must a some stage pay tax which i am at a loss try to get some sense out of ATO

i dont have a contract with basketball sa i dont have a ABN or tax file number

iam currently on a dissibility support pension iam aloud to earn $1240.00 per month without affecting my dsp

plz can someone point me in the right direction as i dont wont to get in trouble with the ato

i dont have a money to speak to a tax ccountant

Re: Payment reference numbers

KylieS — Wed, 26 Feb 2020 06:40:47 GMT

We are still looking into this one for you, will let you know when we have some information.

KylieS

Meals & Entertainment

Aphrodite — Wed, 26 Feb 2020 06:24:00 GMT

After reading information on different scenarios as follows, i am still unsure what the transactions should look like. While i feel confident in determining that these are not an FBT situation, I am still unsure as to whether GST can be claimed and allocated as a business expense.

1. Meetings with clients - food & drink paid for, (sometimes including alcohol)

2. Business owner goes on the road for business related activity, accompanied by her partner with food, drink & accommodation involved

Clarification is much appreciated on this.

Re: Why won't the ATO provide an STP facility in the Business Porta"

jamie11 — Wed, 26 Feb 2020 04:06:33 GMT

And you didn't answer the question as to why the ATO can't provide a "simple" STP lodgement facility in the business portal. What better way to accurately report on payroll and super directly to the ATO - rather than going through the tribulations and privacy risks of using 3rd party providers in the cloud (whom the ATO register but don't indemnify against any privacy breaches). It would take 2 weeks to code and test STP, it would not cannibalise software producers and tax agents from providing their existing bookeeping services, and it would keep many businesses happy, to the extent that it met minimum STP reporting requirements. Its a win-win and something that should have been provided from the start.

As a side, the Small Business Super payments facility also needs some work, you can't have multiple super payments pending at the same time, something about your system getting confused. This means we wait 1 week for each super payment to clear before making another one, which is laboriously painful. A quick fix to this would be to included a reference number for each super payment, then you could have multiple at a time, simples! This is simple business analysis that should have been included in the initial system specification.

Re: Why won't the ATO provide an STP facility in the Business Porta"

jamie11 — Wed, 26 Feb 2020 03:58:11 GMT

Thank you,

You are joking right? On one hand you say you don't want to create additional reporting requirements, then you go on to admit than many micro businesses don't have payroll systems so they will now have to signup for "cloud" payroll systems just to comply with STP. The ATO even made last minute changes to offer quarterly STP reporting for some businesses, given the outcry from the public. The whole thing is a shambles. Your consultation with tax agents, software developers and small business obviously involved industry representative, who don't represent me as a small business owner, but look after their own commercial interests in providing software and services.

If you take some of the feedback from farmers and small businesses on this forum as representative of about 2 million small and micro businesses, you will realise that STP is far from simple and effortless and badly conveived from the start. Asking businesses to go from reporting BAS/IAS quaterly to reporting STP's each payday is ludicrous and one wonders what planet you're from if you think this involves less compliance. Our objective is to have less dealings with government and less compliance work in order to have time working on our businesses, instead we are bogged down in ever increasing ATO compliance not to mention state government and local council requirements.

In addition, with Auskey being retired for the horrendous MyGovID at the same time as STP comes in, you are just stressing out businesses even more. Have a look how the New Zealand government handled their Real ID (with a simple login) and compare it to the ever changing ATO list of authentication products (ECI/Auskey/MyGovID) and you realise how badly the ATO have handled the whole thing. I'm not sure if it's lack of internal knowledge or the too quick to outsource mentality, but the ATO have a lot of catching up to do to make compliance seamless.

Re: Business tax

NateH — Wed, 26 Feb 2020 02:35:38 GMT

Hi ,

Just adding an extra resource to the great answers by and - We have some information on our website for when you are starting a business that you may want to look through as well. It takes you through what you need to do to get set up and meet your tax and super obligations.

Thanks, NateH

Re: Why won't the ATO provide an STP facility in the Business Porta"

JasonLucchese — Wed, 26 Feb 2020 01:57:25 GMT

Thank you for your feedback, it’s always important for us to hear from the community on how STP impacts various businesses.

When we designed STP, we wanted to integrate the reporting as much as possible into existing payroll processes rather than create additional reporting processes through portals or clearing houses. We knew a large portion of businesses already utilised payroll software and after an upgrade, they would be able to complete their STP reporting as part of their existing payroll process.

We also acknowledged there are small businesses who wouldn’t be using payroll software and after consulting with small businesses, tax agents and software developers, we supported the market to create free and low cost software options to allow this segment of the community to access reporting options that were affordable and simple. If you don’t already have a reporting solution, here is the information and the list of free or low cost software options.

Security of data is always important to the ATO. Software developers must meet strict security requirements to be able to transit STP data from employers to the ATO. Software products are tested with the ATO before they are able to put their software out into the market.

Please keep posting your questions here on ATO Community and we will be happy to respond.

Re: Is transferring money from business bank account to personal bank account taxable?

TaxedoMask — Wed, 26 Feb 2020 00:27:17 GMT

Drawings from private company to individual is subject to Div 7A rules - see here.

Effectively its treated as a loan (P&I) or a deemed dividend.

People used to "borrow" funds from their private company (at 0% interest since they control it) which allowed them to cap their individual tax rate at the corporate tax rate - hence the need for this rule.

Re: Why won't the ATO provide an STP facility in the Business Porta"

TaxedoMask — Wed, 26 Feb 2020 00:10:15 GMT

Forgive my cynical views but with an ex-head of Products at Accenture as CIO at the ATO, I feel that there is little drive to develop within the ATO, rather it's about passing consulting contracts to firms like Accenture (see here).This is why you do not see anything that's remotely close to in-house development or best practices).

On the flip side , there are more and more tools for businesses which are both inexpensive and fairly robust (Xero generally comes to mind). These have the benefit of being regularly updated and maintained which should contribute to increase in accruacy in the information passed onto the ATO.

Whilst it is hardly comforting in your circumstances, the changes should result in a broad improvement to tax reporting and data-matching. I guess its a net benefit to society at large. ¯\_(ツ)_/¯

Re: STP submission is taking too long

KylieS — Tue, 25 Feb 2020 22:53:57 GMT

Hi ,

The design of each solution is up to the provider. We do understand that it may take time to find a solution that is suited to your business, for this reason the ATO offers a number of support options such as;

If there are special circumstances affecting your ability to regularly report on, or before, pay day, you can apply for a recurring deferral. This deferral allows you additional time to lodge each STP report without penalty for late lodgement, or
If you need time to transition to a new product and won’t be able to report for a period of time, you can apply for an operational deferral.

You can apply for these deferral types through the Business Portal – select ‘Manage employees’ then ‘STP deferrals or exemptions’.

You can also use the business numbers to contact us if you are unable to lodge a portal request.

KylieS

Overseas Hosting Companies charging GST on USD amounts

daniel_rossi — Tue, 25 Feb 2020 14:16:29 GMT

I don't believe this has been thought through properly and needs investigation. I believe Ebay are also doing it. Overseas Cloud hosting companies are forced to charge GST. But months later I discovered they are skimping extra off the top by charging GST off the USD bill not the converted AUD amount. It's paid via Paypal so paypal could convert and add the GST. But they are doing it on their side as the subscription amount.

Not only are the USD bills becoming expensive due to the trashed dollar, I am being charged extra a month on top. When if you convert the amount to AUD then add 10%, the bill should be much less.

They get more when the dollar dives further.

What they are doing is criminal and illegal and need help trying to find answers. I complained but they are going to keep doing it.

Amazon Cloud charge in AUD therefore the GST is correct. It's my VPS hosting place, Vultr.

Is transferring money from business bank account to personal bank account taxable?

Opel135 — Tue, 25 Feb 2020 13:51:25 GMT

Hi,

If I run a business as a company with me as a Director where I do not pay myself an income (I already have a permanent fulltime job), am I allowed to use the income from the company for personal expenses?

Would transferring that money from my business bank account to my personal bank account be deemed as personal income, even if I've paid business tax?

Why won't the ATO provide an STP facility in the Business Porta"

jamie10 — Tue, 25 Feb 2020 09:47:08 GMT

Why does the ATO refuse to provide a simple STP lodgement facility in the Business Portal? Currently you provide Super Payments for micro businesses, but refuse to provide an STP facility. If STP is as simple as you claim, then it should take roughly 2 weeks for you to code and test it. We've been waiting 3 years now and the ATO still refuse to provide this simple facility. Small businesses must now trust 3rd party payroll and STP providers of unknown origin, storing personal details on their cloud somewhere. Its amazing how many overseas software providers have popped up as a result on STP being introduced.

Amongst all the other compliance requirements for small business, it seems the ATO and government are intent on driving small operators out of business, while creating more bookeeping jobs in larger business. This is a false economy, driven by artificial production just to meet some legislative compliance. The STP does NOT make things simple for business, it is a measure to punish 99% of businesses who do the right thing.

Are deductions allowable for fraud?

PeaceLilly — Tue, 25 Feb 2020 08:01:53 GMT

Hi ATO community,

I am finishing up my company's tax return and just have one question before I submit it.

I sent a somewhat small sum via bank transfer to be credited to an investment trading account to a U.K. limited company. This money was meant to be segregated from their operational expenses. Unfortunately, before the money arrived at them, their website went down and I was unable to contact them and I have been unable to retrieve the money back. The company the money was sent to is still registered and is solvent. I have reported this to Action Fraud U.K. (police) but still haven't received a response.

Would I be able to claim this amount as a deduction under theft or potentially an investment loss?

Thank you for your time and answers.

Buying stock from a non-GST registered business and selling as a GST registered business

Amy020 — Tue, 25 Feb 2020 06:27:53 GMT

I am a small business registered for GST. I purchase most of my stock (used vehicles) from a non-GST registered business. When I sell the vehicle the purchase price includes GST.

How would I represent this information in a BAS Statement?

Thank you.

Re: Hobby ABN for a musician

TaxedoMask — Tue, 25 Feb 2020 05:55:55 GMT

Business vs hobby is based on a range of factors. I'd lean towards hobby in this instance (no ABN required).

You supply one of these to ensure the no ABN withholding is not applied when you get paid.

Re: Discretionary Trading Trust

KylieS — Tue, 25 Feb 2020 05:25:03 GMT

Hi ,

Not it doesn't apply.

When they are employees the trustee is responsible for the payment of income tax and super.

KylieS

mygov and RAM

Russellcorp — Tue, 25 Feb 2020 05:14:40 GMT

I am concerned with the removal of the auskey and the introduction of the use of your personal mygov account for business use. I work for a Liquidator and I do not want my clients linked to my mygov account. How does the RAM work? Is this the best thing for me to do. Does that work similarly to the auskey?

Re: Super Liability Reporting - Does the amount requires to follow Maximum super contribution base?

ChrisR — Tue, 25 Feb 2020 05:09:03 GMT

Thanks for your post.

Super guarantee (SG) doesn't have to be paid on earnings above a certain limit. This limit is called the maximum contribution base. For more information about the maximum contribution base, check out our website.

Employers don't have to adhere to this limit. In fact, some awards and agreements require employers to continue paying super on earnings above this limit. In addition to this, some workplaces pay super at a higher rate than 9.5%.

This means that depending on how much they earn, some employees may exceed the concessional contributions cap and be liable for extra tax. For more information about this, have a look at the concessional contributions page.

For example, if an employee is paid super at a rate of 12% on quarterly earnings of $60,000, they will be paid $7,200. Assuming that the same amount is paid for all four quarters of the financial year, the total will exceed the cap by $3,800.

While there is now an option for high income earners to opt out of SG, this is only available to employees who have more than one employer. You can find out more about the super guarantee opt out on our website.

Depending on why the employer is paying super above the limit and/or above the minimum rate, the employee may be able to ask their employer to change how much super is being paid.

It is important to note that whether someone exceeds the concessional contributions cap isn't based on what an employer reports via STP. We will determine how much the concessional contributions are in accordance with the contributions reported by the super fund/s.

For more information about the rules of reporting through Single Touch Payroll and what super amounts an employer needs to report, refer to our website.

Hope this helps.

Thanks,

ChrisR

Re: RAM Setup Error Code

Lucia — Tue, 25 Feb 2020 03:48:39 GMT

Hi ,

Thanks for you reply.

Yesterday I found this ATO use of Basic myGovID form on the your website(https://www.ato.gov.au/General/Online-services/Accessing-online-services-with-myGovID-and-RAM/Accessing-our-online-services-with-a-Basic-myGovID/ ) and mailed copy of my foreign passport and photo identification to ATO. Could these document increase my identity strength? And how long could I get comfirmation email from your team?

Thanks,

Lucia

Work Related Injury - Working Director not covered by Workers Comp

TOMACCOUNT — Tue, 25 Feb 2020 03:29:12 GMT

I am looking for some further information about income tax/GST deductions on medical expenses incurred by a company. The situation was related to a single director company that does not have workers compensation insurance. The injury was sustained by the director who is a working director and performs all the work for this company (it is quite a physical role) and this injury occured during his normal work day. At this stage he doesn't take a wage and there are also no other employees within the business.

In WA it is optional to cover a working director for workers compensation so could these injury related expenses be deductible/ GST creditable (if applicable) to the company? Or does this become a personal expense of the director? Can you point me in the right direction to do some further research on this?

Re: Allowance paid to Contractor, GST

HeidiSutton — Tue, 25 Feb 2020 02:54:57 GMT

Just want to clarify that this would apply to all contractor allowances. We currently contract trainers to faciliate training and we pay them a training fee and where they have to travel pay a meal allowance, and travel allowances related to km's travelled and/or distance from home. Are all contractor fees attractive of GST or does it depend on the circumstances of the allowance?

Re: RAM Setup Error Code

NateH — Tue, 25 Feb 2020 02:51:17 GMT

Hi ,

As you mentioned this error code appears when you don't have sufficient level of identity strength.

You would need Australian Identity documents such as:

driver’s licence or learner’s permit
passport
birth certificate
Medicare card

If you don't have any of them, we have a solution coming in March where you will be able to use a Basic myGovID to access our online services.

Hope this helps. Thanks, NateH

Family Member lead money to help business

JessicaSpring — Tue, 25 Feb 2020 02:25:06 GMT

Hello, my parents will borrow their personal saving with no interest to help me out with my business cash flow issue. I will return the money in a month time. may I know if there is any tax implication by doing this?

Re: Incomplete STP

KylieS — Tue, 25 Feb 2020 02:23:42 GMT

Hi @Kal-HerEn,@NuriDocs , @jcollins @BronMck ,

Thanks for your patience.

We have been advised by the STP area that if you believe you have finalised all your 2019 employees no further action is required.

If you are unsure, please submit an update event and include all employees that were reported through STP for the 2019 FY.

This includes employees that may have ceased employment throughout the year or not been paid in your last pay event for the 2019 FY.

If you are unable to submit an update event please contact your software provider for instructions or for further assistance contact us and request your details be escalated to the STP Client Engagement Team.

KylieS

Re: Going away

ChrisR — Tue, 25 Feb 2020 02:02:12 GMT

Thanks for your post.

You can find the answer to your question in the following thread: STP - Payments over holidays

You can also check out the options for businesses shutting during December and January news item in the Single Touch Payroll section of our website.

Hope this helps.

Thanks,

ChrisR

Re: Register bank details?

ChrisR — Tue, 25 Feb 2020 01:06:48 GMT

Thanks for your post.

You can update your financial institution details with us. Our website explains how you can do that. Your account details will also be updated when you submit a tax return.

If you are in business and you want to update the financial institution details of your business, you can do that via the Business Portal. Have a look at the update your details page for more information.

Hope this helps.

Thanks,

ChrisR

Re: Buyers Identity

ChrisR — Tue, 25 Feb 2020 00:47:46 GMT

Thanks for your question.

Tax invoices for sales of $1,000 or more need to show the buyer's identity or ABN. In turn, the buyer's name is enough to meet this requirement. You don't have to include the buyer's address.

You don't need to include the buyer's identity on tax invoices for taxable sales of less than $1,000.

For more information about tax invoices and the information they must include, check out our website. While a buyer's address is listed in the examples, it isn't compulsory.

Hope this helps.

Thanks,

ChrisR

Re: Business tax

macfanboy — Tue, 25 Feb 2020 00:03:38 GMT

Always best to seek a tax professional to complete your first one as you can learn quite a lot from them, don't be afraid to ask lots of questions and mention it is your first when you make the appointment.

They should ask you lots of questions before and during the appointment.

If you feel confident moving forward then you can do it yourself in future years.

Re: Business tax

TaxedoMask — Mon, 24 Feb 2020 23:49:04 GMT

Under the self assessment system, you can either lodge the return yourself or get a tax adviser/accountant to lodge the return and render assistance to you.

There is no "free service" that helps businesses fulfil their tax obligations. With this said, comprehensive materials are available from the ATO's website. eg. for 2019 company returns - see here. For how to lodge your return - see here.

Re: Is Reimbursement of Cancelled Holiday Cost Taxable Income for an ABN?

KylieS — Mon, 24 Feb 2020 22:00:59 GMT

Hi ,

Great information and advice from .

A complex question, if you need more information please contact our early engagement area for assistance.

KylieS

Re: MyGov verification text

KylieS — Mon, 24 Feb 2020 21:53:58 GMT

Hi ,

This would be concerning. Check out the information on the myGov Security page regarding suspicious activity on your account and what you should do.

KylieS

RAM Setup

Shagrad — Mon, 24 Feb 2020 21:00:39 GMT

I am trying to link my business in the RAM setup and all it does is direct me to a blank screen with the address https://poro.ato.gov.au/poro/ with nowhere to link my business. There are three options in the top bar ... Business Portal,Tax Agent portal and BAS Service provider Portal but going into these just takes me to the old method of login.

MyGov verification text

DChew — Mon, 24 Feb 2020 19:33:18 GMT

Good morning all. I woke up at 6am and checked my mobile phone. I received an myGov Security verification text (msg ref: SV001) at 4.50am while I was asleep. I did not request for any access code. Does this mean that someone is trying to access my ATO account? Would someone able to advice me on what to do next,,, change the password? Much appreciated, Cheers, D.

Business tax

Addy — Mon, 24 Feb 2020 13:38:19 GMT

Does ATO offer free tax help for people who run a business? I am currently selling skin care and just wanted to know if I can access help to do my own tax returns thank you

Tax Deduction for removal of Horticultural Plants

JE_72 — Mon, 24 Feb 2020 07:20:54 GMT

I have planted grapevines as an agricultural producer. As part of plantng the new vines I have removed some old olive trees to make way for new vine planting

What I need to know is how to claim a deduction for the removal of the old olive trees. Is the removal considered a capital deduction or immediate write off in its own right,or do I add the cost of the removal to the capital cost of the new vines and depreciate as part of the new vines?

Re: Is GST applicable on an Airbnb Apartment

ChrisR — Mon, 24 Feb 2020 07:18:28 GMT

Thanks for your post.

Your thinking sounds right. The owners need to declare the rental income. As the individuals are the owners of the rental property, they are the ones who need to declare the income.

As the owners aren't GST registered, they're not required to collect GST and pay it to us. If their company has incorrectly paid GST to us in respect of this rental income, the company can correct it.

For more information about GST and correcting your mistakes, refer to our website.

Generally, you only declare the income you earn from a property if your name is on the title deed. Check out the obtaining and owning a rental property page for more information. The name in the Airbnb agreement doesn't override the title deed.

Hope this helps.

Thanks,

ChrisR

GST - electronic distribution platform operators

LG123 — Mon, 24 Feb 2020 05:54:25 GMT

Does online sales facilitator need to charge GST on second hand personal goods sourced by other individual/business (the actual vendor) and then resale through the facilitator's online platform? The sales facilitaor will charge a commission including GST to the vendor, but should the faciliatator also charge GST on the goods itself on the resale and then pass it on to the vendor?

Thanks.

Re: GST and/or FBT on retirement gift to employee

AriH — Mon, 24 Feb 2020 05:53:32 GMT

Because the value of the gift exceeds $300, it is not exempt from FBT. Generally employers can claim an income tax deduction for the cost of providing fringe benefits and claim GST credits for those items provided as fringe benefits. I encourage you to check out the FBT guide for employers. Our website also has examples of ETP's. You will also find helpful links to determine the category that applies to your circumstances.

Hope this helps.

Ari

Re: Sub contractor

RodrigoP — Mon, 24 Feb 2020 05:25:39 GMT

Hi@ kat1981

Thanks for your Question. A client must register for Good and Services (GST) if they carrying on a business or enterprise and the GST turnover (Gross business income) not the profit at or above the GST turnover threshold of $75,000 or $150,000 for not for profit organisations.

If the turnover is below this threshold, they still register for GST if,Taxi services are supplied including ride-sourcing.

If you are not registered for GST you cannot charge GST on sales and also cannot claim GST credits on purchases as TaxedoMask mentioned.

If you only register for GST then you will be reporting GST on a Business Activity Statement (BAS) every 3 months or annually depending on the GST turnover threshold.

Your husband can put some money aside towards the end of the year tax bills but we do not require you to pay tax upfront (PAYGI) for the first year.

Hope this will assist you.

Thanks

RodrigoP

Re: Treating a Building Improvement Correctly

Justine_Ellis — Mon, 24 Feb 2020 04:40:56 GMT

Thank you

Agree the determination below and that it is not immediately deductible.

I was planning on adding our portion of the cost as a leasehold improvement and depreciating over 5 years which is also the term of the lease. I will go ahead with this.

Thank you for your consideration in this matter.

Re: Treating a Building Improvement Correctly

NateH — Mon, 24 Feb 2020 04:29:00 GMT

Hi and ,

We have heard back from our technical team on this one.

It is likely that such an arrangement can be characterised as a joint construction of improvements to the property that you lease. On this view, both you and the landlord are sharing the costs. As you do not own the improvement you are not entitled to a capital works deduction for the expenditure. It is likely that your share of the costs is not immediately deductible as it secures an enduring benefit of a capital nature. However, your share of the cost may be deductible over five years as a Business related cost where you meet the requirements listed in that information.

Thanks, NateH

Re: TFN Declarations not made to ATO

RodrigoP — Mon, 24 Feb 2020 03:39:47 GMT

Hi@ Jochim

Thanks for your question.TFN declarations need to be lodged with the ATO with in 14 days after the form is either signed by the payee or completed by the payer( if not provided by the payee).

failure to lodge (FTL) on time penalty may be applied if you have not lodged them with the 14 day time frame. I some situations you may ask for it to be remitted in full or in part if there are extenuating circumstances.

Have a look at our ATO failure to lodge on time penalty how to request for remission on FTL only if you qualify.

Hope this will help you have a better understanding.

Thank you.

RodrigoP

Re: NDIS for plan managers

AriH — Mon, 24 Feb 2020 03:06:03 GMT

In this situation you do not need to account for GST. It is only relevant to NDIS and the service provider that is charging GST.

GST would only apply to you if you are registered and charging clients for this service you are providing for them. Take a look at how GST works.

Hope this helps.

Ari

Re: Working for a Company without an Australian Office

MayW — Mon, 24 Feb 2020 02:39:38 GMT

You will need to consider if the company is to hire you as employee or contractor.

Check out the employee or contractor page on our website for more information which will help you determine your status.

If you end up being an employee:

Do I need an ABN? No
Do I need to ask for the company to send me an invoice for my wages? No
Apart from ABN, any other things needed to be registered for? No

Or, as a contractor:

Do I need an ABN? You may need one depends on your contract.
Do I need to ask for the company to send me an invoice for my wages? Payment will be made to you based on terms of your invoice or contract.
Apart from ABN, any other things needed to be registered for? GST or PAYGI (Pay as you Go Instalments).

For more information about GST and PAYGI have a look at a website.

Hope this helps.

Thanks MayW

Re: How does GST work on STRIPE fees and STRIPE Taxes

TaxedoMask — Mon, 24 Feb 2020 02:12:03 GMT

You are based in AU. They provide the service to you. They charge you GST as required. This is separate to the GST that you charge your customers.

Re: Sub contractor

TaxedoMask — Mon, 24 Feb 2020 02:09:56 GMT

<$75k doesnt need to register for GST, cannot charge GST on sales and cannot claim GST credits on purchases.

Whether you register is up to you but once you hit the 75k threshold you are required to register. (note its 150k for nfp).

Re: Payment reference numbers

KylieS — Mon, 24 Feb 2020 02:05:43 GMT

Hi ,

Thanks for getting in touch, we are looking into and will get back to you as soon as we can.

KylieS

Re: Australia Director

TaxedoMask — Mon, 24 Feb 2020 02:05:26 GMT

No. The ATO does not simply waive a requirement that's written into the Corporations Act (it's not a tax issue per se). Consider getting a temp Aussie director.

Re: Is Reimbursement of Cancelled Holiday Cost Taxable Income for an ABN?

TaxedoMask — Mon, 24 Feb 2020 01:52:34 GMT

Hahaha if the professionals can't figure it out, your chances of certainty from here would be... slim. Should get assurances from Company A in the event of adverse outcomes from the ATO that they would compensate.

- the monies received from Ltd A will be treated as assessable income, and

Agreed (s20-20).

- the costs associated with cancelling the holiday will not be deductible as the money was not spent for the purpose of generating business income.

I would say that it is deductible. There is a question of whether it'll fall under s8-1 or s40-880.

My fear is that the latter is more likely so there could be a timing issue. I say this as the receipt of this amount should not be characterised as revenue/assessable by the employee. After all the nature of the underlying amount being compensated is both capital and private in nature. A deduction was not obtained by the employee going on this holiday - so there's no mischief here.

Since the income is "capital", it would be difficult to argue that the nature of the payment from C to D is on revenue account. Rather, it is a compensation payment that is capital in nature. Since this does not form part of the cost base of an asset - I am of the view that its a s40-880.

Now when you pay C, I cannot see the nature of the payment changing. so may have the same issue. There may be an out somewhere but it hasn't come to mind.

- therefore, in order not to be out of pocket, we would need to recover $9434 + GST for a $5000 holiday ($5000/0.53)

It's not subject to FBT (on the basis that it is a compensation payment and not an expense payment fringe benefit) so I would still say its $5,000 and no need to gross up. After all you are paying the person to not go to his holiday and to render services to you / Company A instead.

The link provided from Company A is unhelpful at best.

Re: Unable to download mygovid

KylieS — Mon, 24 Feb 2020 01:52:28 GMT

This has worked for other users;

• Ensure your device ‘time and date settings’ are correct for your region or set to automatic
• Ensure your client’s device ‘language’ settings are set to English (Australia).

Once these settings are confirmed clear the cache and data as follows:
• Open phone Settings
• Select Apps
Select myGovID > Storage > Clear Cache and Data

Set up myGovID again using the same email, personal details and Identity documents. (try using an alternate internet connection that is strong).

This is a link to the myGovID information page that may help.

We also have a support line that you can contact.

KylieS

Re: Reporting Airbnb Income as a business

AriH — Mon, 24 Feb 2020 01:46:01 GMT

You can include the rental income from Airbnb with your other gross income. Your business industry code indicates your main source of income so it is still appropriate for your current circumstances.

If you are concerned that your lodgment is late you may want to contact us.

Hope this helps.

Ari

Re: STP lodging and editing

RodrigoP — Mon, 24 Feb 2020 01:38:18 GMT

Hi@ DBI

Thanks for your question. Its quite common there are lodgment errors pop up on review, refer ATO QC 49409 general errors. Correct all errors as per the schedule before lodging again.

Hope this helps.

Thanks.

RodrigoP

Re: Payment reference numbers

HM-Maria — Mon, 24 Feb 2020 01:37:09 GMT

Kylie, I had a client ring me at home at 8pm on Friday night concerned about the change in reference numbers.

I can see that their entity had the same reference number up to November 2019 and then it change for the December and January activity statements. I think that this needs to be noted urgently as I will need to advise my whole firm of the ATO's change in payment reference numbers.

Hobby ABN for a musician

Thestevenator — Mon, 24 Feb 2020 01:22:43 GMT

Hi, 5 of my friends and I (6 in total) are in a part time band. We have started playing gigs at pubs. We play about 6 per year, earning approximately $5000.
My inquiry is “would this fit the description for a hobby ABN?”
Most of the money is spent on purchasing / upgrading / maintaining musical equipment.
Thanks

Re: Activity statement not showing

RodrigoP — Mon, 24 Feb 2020 06:37:09 GMT

hI@ acoe999

Thanks for question. When you back date any role it will not automatically generate outstanding activity statements. You will have to contact us as JodiH have mentioned to get all out standing BAS generated. It should be visible on your portal soon after its generated.

Hope this will help you to get your outstanding BAS generated.

Thanks.

RodrigoP

Re: GST on per diem

KylieS — Mon, 24 Feb 2020 00:36:32 GMT

Hi ,

Thanks for your patience.

We have been in touch with our GST experts and they have advised that they need to get some more information from you to be able to give you an accurate answer.

Can you please send your question to GSTMail@ato.gov.au

KylieS

RAM Setup Error Code

Lucia — Sun, 23 Feb 2020 23:58:43 GMT

Hi,

I have been trying to accept some authorisation request via the "authorisationmanager.gov.au" website as instruced in my RAM Austhorisation Code email from our managing director, but keep geting the following error code: The details you used to establish your digital identity do not match those provided in this authorisation request. Contact the person who authorised you. Error code: REB.BR.0047. But I am sure that my details are all correct. BTW, my identity strength is Basic. Is this is the reason why I got that error code? Also, I don't have any Australian Identity Document that meet requirements to set up my standard myGovID, any other documents that I can use? Such as my passport or my Photo ID?

Thanks for your help in advance.

Regards,

Lucia

Re: Starting a new business

KylieS — Sun, 23 Feb 2020 21:24:07 GMT

Hi ,

Great info from .

Check out this information on our website regarding starting your own business.

KylieS

Re: myGovID

KylieS — Sun, 23 Feb 2020 21:21:24 GMT

Hi ,

This has worked for other users;

• Ensure your device ‘time and date settings’ are correct for your region or set to automatic
• Ensure your client’s device ‘language’ settings are set to English (Australia).

Once these settings are confirmed clear the cache and data as follows:
• Open phone Settings
• Select Apps
Select myGovID > Storage > Clear Cache and Data

Set up myGovID again using the same email, personal details and Identity documents that you used previously (try using an alternate internet connection that is strong).

KylieS

NDIS for plan managers

melindasullivan — Sun, 23 Feb 2020 21:08:30 GMT

I am a Plan Manager for NDIS which means I manage the budgets of clients. When the client receives a service I claim the money (invoice) from NDIS and then forward it to the provider. Most sevices do not have GST applied but in the event that they do, do Ineed to account for GST or do I not need to because I am simply claiming the funds thay are entitled too and then passing them on.

I am not paying for services and then being reimbursed, just to be clear.

I use a seperate bank account specifically for client funds to go in and out of.

myGovID

Jackie — Sun, 23 Feb 2020 05:58:15 GMT

I have been able to successfully use the myGovID app on a Samsung A50 (v 9) and on an iPhone XR, but I cannot get the app to work on a Samsung S9 (v 10). When it comes to opening the app on the phone to enter the "linking code", the app on the phone immediately shuts down, without even giving an error message.

I have uninstalled and reinstalled the myGovID app 5 times on the S9 phone. It still does not work on the S9.

Can anyone offer any advice please?

Re: Starting a new business

macfanboy — Sun, 23 Feb 2020 01:12:40 GMT

Once you apply for an ABN and have been granted one you will need to lodge tax returns every year you hold that ABN regardless of income.

If you are intending to turnover more than $75,000 per financial year you need to register for GST and file BAS statements ever 3 months paying the GST that you have collected and claiming the GST on the expenses that you incurred.

Re: Actors & Artist PAYG Tax

macfanboy — Sun, 23 Feb 2020 00:49:03 GMT

No difference between the two and they could apply for Income Averaging as Special Professionals.

Starting a new business

Bumpy — Sun, 23 Feb 2020 00:37:48 GMT

I’m thinking of kicking off a new business soon. My question is, if I register for an ABN and register the business, but NOT operating or trading right away, what needs to be done as far as tax???? Do I still need to lodge business statements etc???

Re: Unable to download mygovid

uabf9 — Sat, 22 Feb 2020 03:59:01 GMT

Hi ATO,

Please update this post with details so if can be meaningful for others.

I have the same issue, I use an iphone OS 10.3.4 and get the 'cannot download app mygovid isn't compatible with this device' - how do I install myGovID on this device. If certain apple devices that have over OS10 are excluded, please state this clearly on all your Help pages on this topic.

Regards

uabf9

Re: Activity statement not showing

acoe999 — Sat, 22 Feb 2020 02:44:15 GMT

It doesn't show the available business activity statement for the back date registration. Does it visible on next end of quarter? Or how will it be visible?