Monthly Tax Update Series - Feb 2020



I don't like pineapple on my pizza!

According to the ATO, a simple statement like 'I don’t like pineapple on my pizza!' as a password can take more than one year and costs scammers $107,000 to crack. The ATO has issued a range of resources available to help you protect businesses, in partnership with the Australian Cyber security Centre (ACSC) who recently surveyed small businesses about cyber security.


Small Business

Following the enactment of legislation in late 2019, ATO Officers will be permitted to disclose business tax debt information to external credit reporting businesses. They may have an impact of your ability to secure commercial funding for your business. The Government recently issued a determination that the following entities will be subject to this disclosure:

- registered in the Australian Business Register (have an ABN) excluding complying super funds; and

- have one or more tax debts totaling $100,000 or more that are overdue by 90 days or more.


The Treasurer has announced that any disaster relief payments being made to individuals or businesses impacted by the bush fires are tax exempt


GST

Crowdfunding is the practice of using internet platforms, mail-order subscriptions, benefit events and other methods to find supporters and raise funds for a project or venture. But did you know that there may be income tax and or GST implications to crowdfunding which may need to be disclosed in your personal or business tax returns, or your BAS!


The ATO have produced some very useful information which can be found on their website.


Individuals


The ATO has stated that it will be asking for over 5 years of insurance policy information from over 30 insurance companies about taxpayers that own marines vessels (boats), thoroughbred horses, fine arts, high value vehicles and aircrafts. The ATO expects to receive information on about 350,000 taxpayers. This information is to be used by the ATO in it's compliance programs and data matching systems. ATO Deputy Commissioner Deborah Jenkins stated as follows: "If a taxpayer is reporting a taxable incme of $70,000 to us but we know they own a $3 million yacht then it is likely to raise some red flags".


Target area likely to get picked up include:

- identifying individuals under reporting income

- identifying individuals who have made a capital gain

- Identifying incorrectly claiming GST credits for private assets as business assets

- Identifying SMSFs the ATO suspects are acquiring lifestyle assets purely for the personal enjoyment of the fund's trustees or members


As part of the ATO's 2019 annual report, the ATO has updated the tax gap figure for 'individuals not in business' sector to be $8.4 billion. The main drivers of this gap continue to be the incorrect claiming of work related expenses and or rental property deductions. The ATO will continue to focus on these areas in their audit programs so care needs to be taken by tax payers.



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