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Client Alert for April 2018

ATO embarking on e-Audits

The ATO has recently published information about the "e-Audit" technology it uses as part of its tax compliance activities. These audits involve the ATO performing computer tests on a taxpayer's own electronic records to verify that the data is accurate and complete and that the taxpayer has complied with relevant tax laws.

If a taxpayer is selected by the ATO for an audit or review, the ATO will take a copy of the relevant records (eg data held in the taxpayer's accounting or payroll systems) in order to perform the tests. Although the ATO has broad powers to access taxpayers' records, the ATO takes a cooperative approach and will work with the taxpayer and their advisers.

The ATO may also use an assessment tool to rate a taxpayer's system risks in relation to correct reporting of tax and super obligations. This can have benefits for the taxpayer because the ATO will provide them with a final report that highlights any particular compliance risks for their business and includes recommendations for addressing these issues. Read more…

Client Alert for March 2018

Bill to implement housing affordability CGT changes

As part of the 2017–2018 Budget, the Federal Government announced a range of reforms intended to reduce pressure on housing affordability. Legislation has now been introduced into Parliament that proposes to:

• remove the entitlement to the capital gains tax (CGT) main residence exemption for foreign residents; and

• modify the foreign resident CGT regime to clarify that, for the purpose of determining whether an entity's underlying value is principally derived from taxable Australian real property (TARP), the principal asset test is applied on an "associate inclusive" basis. Read more…

Client Alert for February 2018

ATO guidelines: profit allocation within professional firms

The ATO has become aware that its guidelines on Everett assignments and the allocation of profits within professional firms are being misinterpreted for some higher-risk arrangements, including the use of related-party financing and self managed superannuation funds (SMSFs). Read more…

Client Alert for December 2017 - January 2018

Consultation paper: combating phoenix activities

The Federal Government has released a consultation paper proposing company and tax law reforms to combat phoenix activities.

Phoenix activities involve stripping assets from a company that's in debt and transferring them to another company to avoid paying the first company's liabilities – that is, the new company "rises from the ashes" of the old one. Read more…

Client Alert for November 2017

Compensation for ATO systems outages

After the ATO's unplanned systems outages, it provided lodgment deferrals, and remitted interest and penalties where the outages affected practitioners and their clients' lodgments.

The ATO has also advised that it assesses claims for compensation in two ways: Read more…

Client Alert for October 2017

Bill to increase Medicare levy

The Medicare Levy Amendment (National Disability Insurance Scheme Funding) Bill 2017 has been introduced to implement the Government's 2017–2018 Budget announcement to increase the Medicare levy by 0.5% to 2.5% from 1 July 2019 in order to help finance the National Disability Insurance Scheme (NDIS). Nine other Bills have been introduced to increase the following rates that are linked to the top personal tax rate. Read more…

Client Alert for September 2017

Work-related expense claims under scrutiny

Will you claim work-related expenses on your tax return this year? The ATO now uses real-time data to compare people's tax returns with others in similar occupations and income brackets. This year it's focused on identifying higher-than-expected claims for expenses related to work vehicles, travel, internet and mobile phones, and self-education, and may even check people's work deduction claims with their employers. Read more…

Client Alert for August 2017

Tax cut for small business: ATO will amend returns

For the 2016–2017 income year, the company tax rate for small businesses decreases to 27.5%. Companies with turnover of less than $10 million are eligible for this rate. The maximum franking credit that can be allocated to a frankable distribution has also been reduced to 27.5% for these companies. Read more…

Client Alert for July 2017

Higher education HELP changes announced

The Government has announced a package of reforms to higher education – the Higher Education Reform Package – to take effect generally from 1 January 2018. Under the package the maximum student contribution will increase from 1 January 2018, but there will be no up-front fees and no deregulation of fees. Read more…

Client Alert for June 2017

Tax assistance for people affected by Cyclone Debbie

The ATO has said it will fast-track refunds for people affected by extreme weather and flooding associated with Tropical Cyclone Debbie and ex-Cyclone Debbie in Queensland and New South Wales, and will allow extra time for those taxpayers and their agents to lodge income tax returns and activity statements. Read more…

cpa xero  tax  MYOB