Contractors vs Employees: Under the ATO Spotlight

Why Consider the Contractor issue now?

The contractor issue is not at all new, nor has it been subject to any dramatic recent change.  However there are a number of diverse factors that have brought this issue back to the spotlight.

  1. Growth in the number of Contractors: The attractions of contractors are many: a substantial release from the growing obligations that employers face and the flexibility which comes with being able to gain or shed resources in line with needs and the business cycle, just to name a couple.
  2. Government / Treasury Attention: The new contractor reporting regime which will apply to the building and construction industry from 1 July 2012 is the most obvious example of measures to examine contractor arrangements.
  3. Tax Office Attention: The Tax Office’s compliance plan for 2012 is reason enough to note how important the contractor issue has become.
  4. Institutional attention:  It is reasonable to expect that union scrutiny of contractor arrangements will continue.

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The Budget Surplus – Illusion or Reality?

The Government released their Mid-Year Economic and Fiscal Outlook (“MYEFO”) report and announced the following key changes:

  • Corporate PAYG Tax Instalments

Companies with a turnover in excess of $20 million per annum will be required to make PAYG Income Tax instalments on a monthly basis.

  • In-House Fringe Benefits

Under the current legislation, the taxable value of an in-house fringe benefit under a salary sacrifice arrangement would be reduced to 75% of the lowest price at which an identical benefit would be sold to the public or under an arm’s length transaction. This taxable value would then be eligible for a further $1,000 reduction in determining the FBT payable. Read more

New LAFHA Regime Kicks In From 1 October 2012

The new legislation containing changes to the current Living Away From Home Allowances (“LAFHA”) regime was recently passed. For employers with LAFHA arrangements entered into after 8 May 2012, the new rules will apply from 1 October 2012.
The new rules require the following from the employers and/or employees: Read more

Excess Super Contributions: Once Only Refund Offer

The ATO has started offering refunds to some individuals who have exceeded their annual superannuation concessional contributions cap. From the 2011-2012 year, there is a once-only opportunity to have excess concessional contributions refunded. Read more

Contractor Payments Undergo ATO Data Matching

The ATO has recently released details of a data-matching program focusing on contractor payments. Under the program, the ATO intends to collect information in relation to payments made to contractors for the 2009-2010 to the 2011-2012 income years by businesses audited by the ATO’s employer obligations area. Read more

Special Circumstances Found To Set Aside Excess Contributions Tax

A taxpayer has successfully argued before the AAT that there were special circumstances in his situation to allow for the exercise of the Commissioner’s discretion under the law to reallocate superannuation contributions. Accordingly, monies paid into his superannuation account in late July 2009 could be attributed to the 2008-2009 financial year, and this meant that the taxpayer would not exceed the (then) $50,000 contributions cap. Read more

Depreciation Deduction Allowed For Certain Equipment

A recent case before the AAT has highlighted the need for businesses to maintain appropriate records of plant and equipment used in business. Read more

Honest Mistake In Not Documenting Private Company Loans

A taxpayer has been, in most part, successful before the Administrative Appeals Tribunal (AAT) in relation to a matter concerning loans from a private company. These loans were made to him, over various years, as a shareholder and director of the private company.

The ATO had treated the loans, which were made in the 2005, 2006 and 2007 income years, as assessable dividends.
The AAT sided with the ATO in relation to the 2005 loans. Read more

Mini-budget tightens fringe benefits, health rebates and more

The Government’s mid-year budget update was handed down in late October 2012. The Treasurer revised down the expected Budget underlying cash surplus to $1.1 billion for 2012 – 2013 down from $1.5 billion estimated in the May 2012 Budget. Read more

Planning for 2013/14

To survive in difficult times, businesses need to continually review their business operating environment. This would include a review of your marketing strategy, managing costs, innovation, productivity, preparation of cashflow and profit and loss budgets for 2013/14. Read more

3 Key Ideas to Help Business Leaders Succeed in 2013

When did you last complete a competitor analysis?

Almost all business owners/managers are aware of their direct competitors but when was the last time you actually completed a formal analysis by way of a ‘competitor analysis’?  This should be at least an annual process to help pin-point key opportunities for improvement.  To complete a competitor analysis: Read more

tax planning

Tax Planning

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Safeguarding Your Intellectual Property (IP)

Intellectual property theft is growing and can be quite expensive for your business. Intellectual property may include, for example customer database, pricing and contracts lists, trade secrets, design and products being developed, details of how prices are calculated for various important customers etc. Read more

Trade Export Market Development Grants – 50% Reimbursement of Export Expenditure

The Austrade Export Market Development Grants Scheme is a program providing financial assistance to businesses exporting (or looking to export) Australian made goods. The scheme aims to encourage small and medium sized businesses to develop export markets. Each applicant can receive up to 7 grants and applications open 1 July and close 2 December 2013. Read more

Electronic Lodgment and Payment Requirement for Business with More Than $20m Turnover

The ATO advises that business with a GST turnover that meets or exceeds the electronic lodgment turnover threshold of $20 million are legislatively required to: Read more

[Video] Tony Monisse – 3 Strategies For Volatile Times

Tony Monisse covers the 3 main strategies for coping in volatile times.

1. Manage Fixed Costs

2. Diveristy

3. Strong Balance Sheet

Watch Tony explain how to get your business out the other side. Read more

Medicare Levy Increase To Fund DisabilityCare Australia

 The Medicare levy has been increased by 0.5% to help fund the government’s National Disability Insurance Scheme, known as DisabilityCare Australia. This will take the Medicare levy from 1.5% to 2% of taxable income from 1 July 2014.

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ATO Taskforce To Target Trust Structures

 

In the 2013–2014 Federal Budget, the ATO was provided with $67.9 million over four years to undertake compliance activity in relation to trust structures.

The taskforce will utilise intelligence systems as well as new tax return labels to gather information. Read more

Brentnalls National Alliance Hits BRW Top 100 List …

Brentnalls WA are thrilled to announce that our national alliance hit number 34 of BRW‘s Top 100 accounting firms list! Read more

[Video] Tony’s Top Business Growth Tips for 2013

3 simple tips that all businesses should do to help grow a sustainable profitable business.

Tony Monisse, leading advisor in business strategy, financial management and what makes a successful business shares his recommendations in this short video clip.
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Perth International Arts Festival – An Example of Blue Ocean Strategy

 

I am a tragic when it comes to business strategy. On Wednesday night we went to the NoFit State Circus – a touring contemporary circus as part of the Perth International Arts Festival.

I am sure I was the only one in the tent thinking about their blue ocean strategy (much to the annoyance of my family).  I observed the show and thought about how they addressed this key question ‘how do you simultaneously increase value and reduce costs?’

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Business Knowledge & Software Expo 2014

Please find below, a brochure on the “Business Knowledge & Software Expo” which is being hosted by our client CA Management Pty Ltd.

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Sound Advice from Kmart’s CEO

I recently attended a breakfast presented by Guy Russo, the former MD of McDonalds (who started working in one of their stores as a teenager) and who is now the CEO of Kmart.

During his presentation, his standout points were: Read more

ATO Grants Amnesty for Voluntary Disclosure of Offshore Income for a Limited Time Only

The Commissioner of Taxation, Chris Jordan, announced on 27 March 2014 that the Australian Tax Office (“ATO”) has launched Project Do It, a new initiative designed to encourage individuals and companies with undisclosed offshore income to come forward and clean the slate. Read more

The Big 10…

Below are 10 actions business owners need to take prior to 30 June to reduce their tax bill;

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