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Obligations in the sharing economy

Tax law applies to income generated from sharing economy services which means, if you are engaging in activities in the sharing economy, you will need to:

  • keep records of all income received that will need to be declared in your income tax return;
  • keep records of all expenses to be claimed as deductions; and
  • consider requirements for an ABN and registering for GST.

However, if you sell goods or perform services as a spare-time activity for pleasure or recreation you may be engaged in a hobby, in which case tax or reporting obligations would not apply.

For further information contact us and/or view our original eNewsletter here.

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Deductibility of work related travel expenses

A recent ruling from the Australian Taxation Office (ATO) has highlighted the specific rules regarding claiming travel expenses.

Travel expenses incidental and relevant to a taxpayer's derivation of assessable income, including salary and wages, are deductible under the ordinary provisions of the tax legislation, but there are some limitations such as deductions for travel expenses in connection with residential rental properties and work-related travel expenses subject to 'reasonable allowances'.

For further information contact us and/or view our original eNewsletter here.

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Employing 20+ employees? Single Touch Payroll starts 1 July 2018

Also, the Australian Government has announced it will expand Single Touch Payroll to include employers with 19 or less employees from 1 July 2019. This will be subject to legislation being passed in parliament.

Early implementation of the Single Touch Payroll (STP) regime can provide a business with efficiencies for reporting tax and superannuation information to the ATO.

For further information contact us and/or view our original eNewsletter here.

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Changes to allowances for employee truck drivers

A recent tax ruling from the ATO will change the deduction method for truck drivers claiming meals on overnight travel.

As an employee truck driver, meals may be taken at unconventional times. Under the new rules truck drivers will claim an amount for each meal based on when they take a break as long as they receive an adequate travel allowance. This is different from the per day rate.

For further information contact us and/or view our original eNewsletter here.

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Private recreational pursuit or hobby is not a business

With the festive season approaching, many people undertake some Christmas work as a Santa in shopping centres or other venues/events. When doing this for remuneration, some employers treat the Santa role as being that of an employee and will provide an annual PAYG Summary, hence the income for the individual is assessable.

However, in some cases the Santa role may not be that of an employee but rather as a contractor and in these cases it may also be treated as a hobby and hence not assessable as it is not an 'enterprise'.

An enterprise does not include activities done as a private recreational pursuit or hobby and the phrase 'private recreational pursuit or hobby' is not defined in the GST Act.

For further information contact us and/or view our original eNewsletter here.

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Off-the-plan-purchases

In an off-the-plan purchase, the acquisition of land or of land and a building is subject to certain events happening - for instance, the owner of the land may have to complete all capital works required before building can commence (such as finalisation of boundaries, roads and telephone and electricity connections) or the owner may have to complete the construction of a building.

In such a purchase, the purchaser normally enters into a contract under which a deposit is paid on the signing of the contract and settlement and payment of the balance of the purchase price is not to occur unless the specified event or events noted above occur. 

For further information contact us and/or view our original eNewsletter here.

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Interest deduction still applies during rental property rebuild

Deductibility of interest
In determining the deductibility of interest, the courts and tribunals have looked at the purpose of the borrowing and the use to which the borrowed moneys have been put. For example, interest on borrowed moneys may be deductible where the moneys are used to acquire income-producing assets such as property for rental.

A recent private binding ruling has confirmed that an interest deduction is also still available on a rental property even where it is in the process of being rebuilt. The main criteria for ensuring that the interest remains deductible is the intention for the property to be rented as soon as the rebuild has been completed.

For further information contact us and/or view our original eNewsletter here.

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What is leasing and hire purchase?

Leasing
There is no precise definition of what constitutes the practice of "leasing". However, the term is generally understood to mean a contract of bailment, whereby one party, the "lessee", obtains the use of an asset from its legal and beneficial owner, the "lessor", for a period of time, the "lease term", in consideration for periodic "lease payments".

Hire purchase
Hire purchase involves an arrangement whereby one party, the "hirer", is granted the use of an asset over a period by the owner of the asset, the "seller", in return for periodic "instalment payments", at the end of which the hirer either has the obligation or right to purchase the asset for a "final payment". The amount of each instalment payment, together with the final payment, will generally equate to the original cost of the asset plus the cost to the seller of financing the assets over the hire purchase period.

For further information contact us and/or view our original eNewsletter here.

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Tax Office guidelines for record keeping

Under the general records and ATO access provisions of the tax legislation a taxpayer is obliged to keep records relevant to its transactions, and those records must be kept in writing in English or readily accessible and convertible into writing in English.

The Tax Office's guidelines state that electronic records will also meet the record-keeping and access requirements of the tax law provided certain principles are observed.

For further information regarding record-keeping procedures for individuals and businesses please us or attend a free Small Business Workshop event being conducted by the ATO.

Qld ATO Small Business Workshop dates and locations are available here.

For further information contact us and/or view our original eNewsletter here.

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Applying for a ruling to extend CGT small business concession

A taxpayer may defer a capital gain made from a small business CGT event if they acquire one or more replacement assets within an acceptable time frame being from one year before to two years after the small business CGT event - this is the asset rollover time period. If a replacement asset is not acquired during the asset rollover time period, the capital gain will crystallize.

If this situation is similar to yours, please do not hesitate to contact us to assist you in applying for a private ruling. This ruling may give you more time so that you aren't forced into making an improper decision on a new business.

For further information contact us and/or view our original eNewsletter here.

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