Robert Goodman Accountants Blog

Tax debts to affect your credit score

Tax debts could soon affect the credit scores of businesses, with the government's introduction of draft legislation to allow ATO to share debt details of businesses to credit rating agencies. The proposal only applies to businesses that meet certain conditions and there are also safeguards to protect businesses that make an effort to resolve their debt.

Your tax debts could soon affect your credit score after the government released draft legislation to allow ATO to share debt details of businesses to credit rating agencies subject to certain conditions. Previously, it was an offence punishable by 2 years imprisonment for a taxation officer to disclose protected information, such as information relating to a particular taxpayer's tax debt. There was no exception in the legislation which allowed the disclosure of debt information to credit reporting agencies, and as such tax debts were not factored into credit ratings of businesses.

According to the government there was some evidence that this discrepancy allowed businesses to prioritise other debts ahead of tax debts leading to a depletion of government coffers. Its hoped that having tax debts on equal footing with other debts will act as an incentive businesses to make timely payments or at least engage with the ATO to work out a debt payment solution, to avoid having their credit worthiness or ability to obtain finance affected. 

The minister for Revenue and Financial Services, the Hon Kelly O'Dwyer said:

"Improving transparency by making overdue tax debts more visible will provide businesses and credit providers with a more complete assessment of the creditworthiness of a business", which will also "reduce the unfair advantage obtained by businesses that do not pay overdue tax debts, and encourage businesses to engage with the ATO to manage their tax debt". 

The proposal applies only to businesses that meet the following requirements:

  • registered on the ABR;
  • has a tax debt and at least $10,000 of the debt is overdue for more than 90 days;
  • is not a DGR, not-for-profit entity, government entity, or complying superannuation entity;
  • is not effectively engaging to manage their tax debt; and
  • the Commissioner has taken reasonable steps to confirm that the Inspector-General of Taxation does not have an active complaint from the entity.

Businesses are not considered to be effectively engaging to manage their tax debt unless the following conditions are met:

  • has entered into an arrangement with the Commissioner to pay their debt by instalments;
  • has objected against a taxation decision to which the tax debt relates; or
  • applied to the AAT for review or appealed to the Federal Court against a decision made by the Commissioner to which the tax debt relates.

As an additional protective measure, any disclosures to credit rating agencies will also only be permitted if the Commissioner has notified the taxpayer at least 21 days before the disclosure. The notice will set out the steps for the business to take to be excluded from disclosure including ways to manage their debt. However, the conditions of notifying the taxpayer at least 21 days before the disclosure and consulting with the Inspector-General of Taxation do not apply for disclosures to update, correct or confirm information previously disclosed. Even though this proposal will not apply until it receives Royal Assent, it may be wise to get on top of any tax debts now.

Have an outstanding tax debt?

If you have a tax debt, even though this proposal may not apply to you yet, you may still be subject to ATO debt recovery action. If you have trouble paying your tax debt we can help you work out a range of options and contact the ATO on your behalf to arrange a payment plan.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

Buying online could soon get more expensive. Previously, purchases under the $1,000 low value threshold were exempt from GST. However, years of pressure from vocal Australian retailers has spurred the Government into passing legislation to collect GST on all purchases from 1 July 2018.

According to research conducted by the National Australia Bank, in 2017, Australians spent a total of $22.7 billion online of which about only one fifth was with foreign online retailers. What Australians spent with foreign retailers equated to around 1.5 per cent of retail sales by "bricks and mortar" retailers, which in the grand scheme of things is not all that significant. The recent legislation has been passed by the Government as a way to curb the exponential growth of foreign online retailers and to stop GST leakage.

The Government has opted for a vendor collection model, which means that foreign online retailers, such as Amazon and eBay, will be liable for the GST on goods sold to an Australian consumer. Foreign online retailers are only required to collect GST where they make sales to Australians of more than $75,000 per year. This exempts small sellers of goods to Australia; however, most large foreign online retailers will easily meet the threshold.

What does this change mean for Australian consumers?

Some foreign vendors may choose to absorb the cost of the GST rather than passing it on to the consumer, but they will still need to include the GST component in the price of their goods and periodically remit this to the Australian Tax Office (ATO).

Some other online retailers may choose to pass on the GST component to the Australian consumer, which means the overall price of the product that you buy, could increase.

At this stage the large online retailers have not given any indications as to what they will do. It is also not known how the Government will enforce this largely voluntary payment model on retailers situated in foreign jurisdictions.

One thing is certain, if you've been putting off an online purchase under $1,000, it would probably be wise to get in now.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

Australian consumer law protects people who purchase goods from Australian companies, but what recourse do you have for a refund when you've bought something from a foreign business that has little or no physical presence in Australia? A recent Full Federal Court case has set a precedent for foreign-based businesses to abide by the Australia consumer law in most circumstances.

What are your consumer rights when you purchase something from an overseas business? According to the Full Federal Court case between the Australian Competition and Consumer Commission (ACCC) and Valve Corporation, Australian consumer law applies if a business is carried on in Australia or if the conduct was in Australia. This may be the case even if it is a foreign corporation with little or no physical presence in Australia.

Valve is a US-based company and one of the world's largest online video game retailers through the "Steam" platform. Its business premises and staff are all located outside of Australia and it holds no real estate in Australia. The only asset it holds in Australia are computer servers. Payments for subscriptions to the "Steam" platform were made in US dollars and processed in the US.

To use the platform to download games, users had to acknowledge subscriber agreements, which contained various representations including no entitlement to refunds, and contractual exclusion of statutory guarantee. Valve sold a catalogue of games to users from various game developers. Some of those games did not appear to be finished or had game-breaking bugs, which caused the games to be either unplayable or not of acceptable quality. When several users attempted to obtain refunds for those games, Valve asserted that as per their subscriber agreement, they do not offer refunds or exchanges on their software products.

The original case was kick-started by ACCC after complaints from some gamers who used the "Steam" platform to buy games that were not of acceptable quality and were subsequently refused a refund. In the original case, which was heard before the Federal Court, Valve lost when the Court found that they had engaged in misleading or deceptive conduct and made false or misleading representations. The Court had further imposed a penalty totalling $3 million.

Valve appealed the judgment and lost again in the Full Federal Court, which upheld the Federal Court's initial findings and the penalty imposed. Whilst the arguments and judgments involved in this case are technical and complex, the outcome is clear. If you purchase goods (it does not matter whether they are physical goods or digital goods) from a company that carries on business in Australia, the seller is bound by the Australian consumer law in its dealings with you.

ACCC chairman Rod Sims said:

"[t]his case sets an important precedent that overseas-based companies that sell to Australians must abide by our law. All goods come with automatic consumer guarantees that they are of acceptable quality and fit for the purpose for which they were sold, even if the business is based overseas".

Whilst Valve has more than two million Australian subscriber accounts, this ruling applies equally to any online goods seller that isn't based in Australia, regardless of their size. So, if you or someone you know has in the past been refused a refund for a purchase made online that was not of acceptable quality, you now have the full weight of the law behind your claim.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

 

The exploitation of vulnerable workers has been getting a lot of press recently, but did you know that it is not just the company or business involved that may be liable to penalties? In two recent cases, the Fair Work Ombudsman (FWO) has used accessorial liability laws to successfully obtain penalties from a professional services firm and the HR manager of a business for their involvement in the underpayment of workers.

Exploitation of vulnerable workers has been covered extensively in recent news, whether it be young naive Gen Ys, desperate for a job, or migrant workers who do not know their rights. The Fair Work Ombudsman (FWO) has recently used accessorial liability laws to obtain penalties against a professional services firm as well as a HR manager for a restaurant for the underpayment of vulnerable workers.

Recent cases

The professional services firm was a Victorian-based accounting firm, which had provided payroll services to a company and processed wage payments which facilitated $750 of the underpayments in relation to a foreign worker. The accounting firm was penalised $53,880 for facilitating the underpayment, while the company involved was penalised $115,706. In addition to prosecuting companies and firms, the FWO is also prepared to go after individuals. An HR manager for a restaurant in NSW was penalised $21,760 for her role in facilitating what has been described as "wide-scale exploitation of overseas workers".

These cases show that it does not matter what the quantum of the underpayment to workers are, even a small underpayment to workers will result in a large penalty. According to Acting FWO Kristen Hannah:

"[It] is prepared to use accessorial liability laws to hold any party involved in the exploitation of vulnerable workers to account" whether it be the business itself, its internal management, or its advisers.

It is clear from the judgments of the accessorial liability cases that anyone that has been knowingly involved in illegal conduct would be open to these accessorial liability claims. In the case of professional services firms, it must put compliance ahead of its business interests. Similarly, if you work in a business that you know is exploiting workers then according to the presiding judge in the case, "there is nothing wrong with sending the message that an employee should indeed resign if that is the only alternative to continuing to participate knowingly in illegal activity".

What does this mean for your business?

You will need to make sure your workers are getting paid the correct awards, allowances, overtime, and penalty rates. Businesses also need to be aware that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 has now come into effect. This means that the maximum penalties are now increased for certain conduct, including the deliberate exploitation of workers and keeping false records.

How about if you are an employee?

If you're the employee of a business and are knowingly involved in underpaying workers, then you may be liable for accessorial liability. This is the case even if you are, or assert that you were, acting on someone else's instructions (as was the case with the HR manager). The Court has made it clear that quitting is a clear alternative.

Contact us for more information

Unsure of what your liabilities are? There are many resources available on the FWO website, or you could consult us, or your payroll services provider, for more information.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

A travel consultant, sacked without warning while pregnant, has been awarded more than $19,000 in compensation, in part because she was found to be "a victim of a general reluctance to hire pregnant people".

Green Travel Service dismissed Bernice Zhang, after three years of employment, on 14 September last year, citing a "constant lack of performance".

Three days earlier, Zhang had been admitted to hospital due to a "pregnancy-related medical condition". Zhang told her supervisor she could not come to work and that she was pregnant.

When Zhang returned to work on 13 September, company director, Peter Sheng, sacked her verbally. She left after the meeting and Sheng gave Zhang a formal dismissal letter the following day.

Zhang applied to the Fair Work Commission (FWC), saying that she was fired because of her pregnancy.

Employer's efforts "simply not good enough"

FWC Commissioner, Leigh Johns, rejected Zhang's claim that her supervisor had informed Sheng that Zhang was pregnant – leading to her being sacked – as her supervisor denied having done so.

However, Commissioner Johns found Sheng gave "unspecified and spurious" reasons for Zhang's dismissal and had never "expressly and unequivocally" told Zhang her job was at risk. Sheng had not given Zhang the opportunity to respond to the reason cited for her dismissal.

In the dismissal letter Sheng said Zhang showed "utter indifference towards the cause of the company for a prolonged period of time".

The Commissioner noted that the letter also referred to Zhang's "negative work attitude" and falsely claimed that she "refused" to perform tasks.

"No doubt Mr Sheng was disappointed with [Zhang's] attitude, but nothing in her conduct at this point justified termination of her employment," Commissioner Johns said.

The employer accused Zhang of not managing her workload and causing delays, but Zhang said that had been due to a co-worker being on leave.

The company had neither warned her nor given negative feedback before it fired her.

Sheng's efforts fell "well short of what is expected" and "his belief [Zhang] should have known that her job was on the line is simply not good enough" as she was entitled to warnings, the Commissioner said.

Commissioner Johns said Zhang being terminated at the beginning of her pregnancy had "impacted upon her ability to find alternate work in the nine months before she would otherwise be confined".

Zhang wins 18 weeks' compensation

The commission found reinstatement would be inappropriate as any chance at a productive and co-operative working relationship between Zhang and Sheng "has been lost".

Commissioner Johns said Zhang had made efforts to mitigate the job loss, but "sadly, she is the victim of a general reluctance to hire pregnant people".

Zhang said by being unfairly dismissed she lost the opportunity for paid maternity leave and accrued annual leave. She asked to be compensated for the 26 weeks she would have worked before taking maternity leave.

Commissioner Johns found the amount to be $29,000, but he deducted the three weeks' pay given to Zhang as notice of her dismissal.

Green Travel said it lost a "significant client" soon after the dismissal, and Zhang would have been let go within the next week as the business was in a "precarious financial position".

Given this, the Commissioner decided to apply a "contingency", reducing the compensation by 25 per cent.

He awarded Zhang 18.75 weeks in compensation, totalling $19,831.73.

(Bernice Zhang v GTS Travel Management T/A Green Travel Service [2017], FWC 7061, 29/12/2017.)

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

The ATO has launched the latest round of their data-matching program to include all visa holders, visa sponsors and migration agents. It will request the records of approximately 20 million individuals for compliance purposes. Find out now if you're affected and what you can do to avoid a visit from the tax man.

Visa holders, sponsors and migration agents beware: the ATO has recently gazetted a notice indicating their intention to conduct a data-matching program. The ATO will request records of approximately 20 million individuals from the Department of Immigration and Border Protection for the years 2017 to 2020. Some of the information that will be handed over to the ATO includes:

  • address history for visa applicants and sponsors;
  • contact history for visa applicants and sponsors;
  • all visa grants;
  • visa grant status by point in time;
  • migration agents (visa application preparer who assisted or facilitated the processing of the visa);
  • address history for migration agents;
  • contact history for migration agents;
  • all international travel movements undertaken by visa holders (arrivals and departures);
  • sponsor details;
  • education providers (educational institution where a student visa holder intends to undertake their study); and
  • visa subclass name.

This rolling program has been continued year-on-year since data analysis in 2011 found support for the view that there was an elevated risk relating to non-compliance and fraud associated with the visa holding population. Previously, the data obtained was used in ATO risk detection models to select populations for investigation relating to tax return integrity, income tax and GST non-compliance and/or fraud. The program also aimed to improve knowledge of the overall level of compliance with taxation obligations by the relevant parties.

Specifically, the program in previous years was to ensure that visa holders, visa sponsors, and migration agents were:

  • completing correct tax returns and business activity statements;
  • meeting their registration, lodgement, reporting and payment obligations for PAYG withholding, fringe benefits tax (FBT) and superannuation guarantee; and
  • managing their tax obligations correctly.

The data-matching undertaken by the ATO is not perfect and is not sophisticated enough to be completely error free. According to the ATO, there may be times where discrepancy matching identifies a taxpayer as not reporting all of their income, but in fact they are reporting the income under another entity.

Before any administrative action is taken, relevant parties will have the opportunity to verify the accuracy of the information obtained by the ATO and will generally be given at least 28 days to respond.

The data obtained from the program may also be used to ensure compliance with other taxation and superannuation obligations, including registration requirements, lodgment obligations and payment responsibilities. The ATO will escalate cases for prosecution where taxpayers fail to comply with obligations after being reminded of them.

Are you affected?

How does this all affect you? If you're a visa holder, visa sponsor or a migration agent, you should ensure that all your tax and payment obligations are up-to-date. The ATO notes that where a taxpayer has met their tax obligations correctly, the use of this data will reduce the likelihood of any ATO contact. So if you want to avoid getting caught in the net, contact us today.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

If you are an employer the way you report payments, such as salaries and wages, pay as you go (PAYG) withholding and superannuation is changing. The ATO will need you to report these payments directly from your payroll solution in real-time, at the same time as you pay your employees. This is known as single touch payroll (STP) and is intended to simplify business reporting obligations. It comes into effect in 2018 or 2019, depending on the size of your business. Are you ready for this change and how will it affect you? We can help you to prepare for the move to STP.

The introduction of single touch payroll (STP) is in line with the Government's "digitisation agenda", to make reporting more streamlined, but many small businesses will feel an extra compliance burden. Those who work in remote areas of Australia may be at a disadvantage as Single Touch Payroll reporting will require a strong internet connection.

In a straw poll conducted by Accountants Daily (between 5 September and 14 October), almost 90 per cent of accountants and advisers said that their clients were not ready for the shift to single touch payroll.

The Institute of Public Accountants (IPA) chief executive officer, Andrew Conway has said: "While initially STP delivers little benefit to small business, we acknowledge that other benefits exist such as transparency over superannuation guarantee payments."

For small and micro businesses – those who employ less than five people – implementing STP by the deadline will take considerable incentive and support. The IPA supports the notion of a phased and targeted incentive approach as proposed by the Government, along with the consideration of a partial offset of costs. However, Mr Conway said the IPA would "like much more detail" to ensure small businesses are not impacted adversely by the implementation of STP. We will keep you posted on updates to this area.

How will this change affect you as an employer?

The change to STP means that employers won't need to complete payment summaries at the end of the year as these will have been reported in real time throughout the year. If you have a payroll solution (software that you use in order to pay employees), you will need to update this or make sure it is updated by your service provider. If you do not have a payroll solution, you can speak to us about how to find the best solution for your business. We may be able to report using STP on your behalf. The first 12 months of STP will be considered to be a transition period, during which time you could be exempt from an administrative penalty for failing to report on time. There are other exemptions, including if you operate in an area with an unreliable internet connection or you are classed as a substantial employer for only a short period during the year (for example, if your employees are seasonal).

How about if you run a small business?

Mr Conway said the IPA's concern is for 70,000 small businesses that will struggle to implement STP without help and support. If you do not use digital software for your payroll you may also need our help to adopt new technology.

What does it mean for employees?

With the move to STP, employees will be able to log on and make sure they are being paid the correct amount for their superannuation contributions so "this level of transparency is most welcome".

What is the timeframe?

Single touch payroll will be compulsory for employers (including those in a wholly-owned group) with more than 20 employees from 1 July 2018. If your business has less than 19 employees, you have a bit longer, but you will need to get on board by 1 July 2019, subject to legislation. If you are unsure about whether you are a "substantial employer", the advice is to do a headcount of all of your employees who are on your payroll on 1 April 2018; a total headcount includes all full-time, part-time, casual employees, those based overseas, absent employees and seasonal employees, not just your full-time equivalent (FTEs).

Want to find out more?

You may not feel ready to meet your compliance needs in relation to STP. You could qualify for a deferral (due to circumstances beyond your control) and you will need to make a request for this. Contact us to discuss the changes to payroll and what you need to do to make the transition seamless.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

In Part 2 of our series on bitcoin, we examine the tax and GST consequences for business; specifically, those businesses that buy and sell bitcoin or mine bitcoin. We also take a look at the tax and GST consequences for businesses when bitcoin is used for transactions.

Buying and selling bitcoin as a business

What about if you decide to go big and start a business of buying and selling bitcoin?

According to the ATO, the proceeds you derive from the sale of bitcoin are included in your assessable income and any expenses incurred are allowable as a deduction.

The bitcoin in this situation is treated as trading stock and you are required to bring to account any bitcoin on hand at the end of each income year.

If you are running a business and your turnover is $75,000 or more, you will normally be required to register for GST. However, bitcoin is considered to be an input taxed sale, which is not included in GST turnover. Hence, if your business consists solely of making sales of bitcoin, you would not need to register for GST. Although you may still choose to register taking into consideration such factors as being able to claim reduced GST credits in certain circumstances, and other taxable sales or creditable purchases you may make.

Mining bitcoin

You may have heard that bitcoin can be mined. The process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle with the participant who solves the puzzle first claiming a set amount of bitcoin. Anyone in the business of mining bitcoin would have to include income derived from the transfer of the mined bitcoin to a third party. The expenses related to the mining activity would be allowed as a deduction. Note that according to the ATO, the non-commercial loss provisions may apply to limit the losses you can claim from the bitcoin mining activity against other income. Again, the mined bitcoin would be considered to be trading stock and there may also be GST consequences in relation to the supply of bitcoin.

CGT consequences

Where you carry on a business and dispose of bitcoin as a part of that business, there may be capital gains tax consequences. However, the capital gain may be reduced by the amount that is included in the business' assessable income. The ATO requires records to be kept for such transactions, including the date of the transaction, the amount in Australian dollars taken from a reputable online exchange, the purpose of the transaction and details of the other party to the transaction.

Using bitcoin in transactions

Where you use bitcoin for business transactions, such as providing goods or services in return for bitcoin, you need to record the value in Australian dollars as a part of your income. This value is fair market value and should be obtained from a reputable bitcoin exchange. You will also be required to remit GST as 1/11th of the payment received for any taxable sale. This will need to be reported on your activity statement and the amount reported has to be in Australian dollars. When you purchase business items using bitcoin, you may be entitled to a deduction based on the arm's length value of the item acquired. In addition, using bitcoin as a method of payment incurs the same GST consequences as using money as payment, that is, there will be no GST.

You could even use bitcoin to pay employees' salary and wages. In instances where an employee has a valid salary sacrifice arrangement with you as the employer to receive bitcoin as remuneration instead of Australian dollars, the payment may be subject to fringe benefits tax (FBT). However, where a valid salary sacrifice agreement does not exist, the remuneration is treated as normal salary and wages and you as the employer will need to meet PAYG obligations.

Want to find out more?

If you would like to find out more about the specific tax and GST consequences for your bitcoin business, or would like some advice on effective salary sacrificing arrangements or how to implement one, talk to us today.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

IMPORTANT: Robert Goodman Accountants does not provide financial advice. All information on our blog is intended as a guide only and is not an investment recommendation. We recommend that you obtain independent professional accredited financial advice when considering whether the information is suitable to your personal circumstances.  We have associations with Financial Planners who specialise in providing independent SMSF, retirement & Estate Planning advice. 

Bitcoin Part 1 – personal investors

 

 

Bitcoin seems to be all the rage at the moment, and while we all know vaguely what it is, the tax consequences of investing in bitcoin aren't as apparent. In our two-part series, we look first at the tax effects for individuals who seek to invest in bitcoin. In part two, we will consider the tax implications for companies investing in bitcoin.

There has been plenty of press coverage on bitcoin, but what are the tax consequences if you decide to join the craze? Well, that depends on whether you are running a business, or if you are acquiring bitcoin for personal investment. Here we examine the tax effects if you choose to invest in bitcoin on a personal level.

What is bitcoin?

Bitcoin is the term for a type of cryptocurrency, a digital currency, created in 2009. Bitcoin currency transactions are entered on a peer-networked ledger – called the blockchain – agreed at the same time by multiple hosts. Balances are created and kept using public and private "keys", long strings of numbers and letters linked through mathematical encryption algorithms. The public key serves as an address to which others may send bitcoin, rather like a bank account number. The private key, which is like an ATM PIN number, is meant to be kept secret and is used to authorise bitcoin transmissions.

Income tax and GST

If you decide to acquire bitcoin as a personal investment, provided you are not carrying on a business of bitcoin investment, you will not be assessed on any profits resulting from the sale. Conversely, you will not be allowed any deductions for any losses made in relation to your bitcoin investment. In addition, there will be no GST consequences for you where the bitcoin transaction is not a supply or acquisition in the course of furtherance of an enterprise.

Beware, however, that whether or not you're carrying on a business, and whether or not an acquisition or supply is in the course of furtherance of an enterprise, depends on a number of subjective factors. The factors involved in determining whether you are carrying on a business or the furtherance of an enterprise also differ, which means you could be subject to the GST regime and not the income tax regime and vice versa. It is best to consult us to find out about your individual situation and to ensure that any bitcoin activities are not captured under the income tax or GST regimes.

Using bitcoin for purchases

Bitcoin is not only for investment purposes and some people use it in the same way as one would use money.

Where you have bitcoin and you use it to purchase goods or services for personal use, capital gains or losses from the disposal of bitcoin will be disregarded provided the cost of the bitcoin is $10,000 or less.

Where the cost of bitcoin is $10,000 or more, there may be CGT consequences on disposal and you need to keep records including the:

  • date of the transaction;
  • amount in Australian dollars sourced from a reputable online exchange;
  • purpose of the transaction (ie, what it was for); and
  • other party's details (if no other details are available, the bitcoin address would be sufficient).

Unsure? Need more information?

Whether or not you are carrying on a business or making a supply in furtherance of an enterprise could be contentious, especially in cases where large numbers of trades and/or sums of bitcoin are involved. To ensure that you stay on the right side of the tax man contact us today.

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

IMPORTANT: Robert Goodman Accountants does not provide financial advice. All information on our blog is intended as a guide only and is not an investment recommendation. We recommend that you obtain independent professional accredited financial advice when considering whether the information is suitable to your personal circumstances.  We have associations with Financial Planners who specialise in providing independent SMSF, retirement & Estate Planning advice. 

 

How can superannuation be considered universal when it appears to discriminate against half the working population? With recent changes to the eligibility rules for spouse/partner contributions to super (brought in on 1 July 2017) it seems that policy makers are waking up to the shortfall in women's superannuation. We look at some of the key causes that may affect you, and what actions you should consider taking in relation to your super.

It may not be the super system itself that is unfair to women, but rather that it doesn't extend to "unpaid" or temporary/casual work, including domestic work mostly undertaken by women, or seek to cover those in less formal working roles. Whatever the cause, a disparity exists: A recent 2017 survey by HILDA (Household, Income and Labour Dynamics in Australia) found that women retire with an average super balance of $230,907 compared to men, who, on average, retire with double this amount. One in three women is heading towards retirement with no super, or a very small fund. There are a number of factors that contribute to this shortfall, notably the gender pay gap, and the reality that women are far more likely to spend time out of work in comparison to men, to work part-time, to bring up children, or to care for elderly or sick relatives. The universal Superannuation Guarantee (SG) system was conceived 25 years ago, based on income from full-time, dependable employment.

In addition to this women tend to live longer than men, meaning that planning and looking after their super is essential.

Are you a woman aware of a shortfall in your super? Have you reviewed your super recently? If so now might be a good time to look at some practical strategies to boost your super, whatever your age.

Start super early

Even if you don't have much capacity to put aside extra money for retirement, there is still a lot you can do to maximise your retirement benefits. No matter how small, compounding savings over a long-term horizon can produce substantial benefits.

If you can, plan early because having an adequate amount in your super by retirement age (current retirement age in Australia is 65, rising to 67 by July 2023) is dependent on growth of the fund over time. The earlier you start saving in super, the longer time your fund will have to accumulate. Saving for retirement is tax-effective via super as there is a lower rate of tax charged on super contributions, and from the age of 60 you can withdraw your super without paying tax.

Your employer should contribute 9.5% of your salary or wages to super if you are in full-time employment, or even part-time employment. An employer will usually select a default fund on your behalf, but you can choose your own nominated fund if you wish.

Find lost super

You may have lost track of a super fund, for example, if you have worked on a part-time basis or you have moved house, changed your name, or lived overseas. You can check this and track your entire super from your MyGov account: https://www.ato.gov.au/Individuals/Super/Keeping-track-of-your-super/#Checkyoursuper

Know your super/grow your super

It may be difficult to keep up with detail of changes made to super, but it's critical that you know the value of your own super as a starting point. Once you have located what super you have, you can check your balance/s, how much is being contributed, what investments are being made and any insurance that is in place. You can also add to your fund by making additional payments, either through salary sacrifice made directly from your employer, or by my making your own non-concessional contributions (after-tax super contributions).

Time out?

If you take time off to care for someone or to have a child, keep in mind that this will affect your super. You can use the career break super calculator to work out how taking time off will affect your super balance. If at all possible it is worth continuing to pay into your super while you are not working.

Individuals with total super balances less than $500,000 can make additional concessional contributions for unused cap amounts from the previous five years, starting from 1 July 2018. This will be a handy measure for those with a capacity to make "catch-up" contributions to boost their super.

Spousal/partner contributions – tax offset – change to eligibility

A tax offset of 18% up to $540 is currently available for any individual, married or de facto partner, contributing super on behalf of a recipient spouse/partner whose income is up to $37,000. Eligibility rules were extended from 1 July 2017 by the Government to increase this amount from $10,800. However, this offset is gradually reduced from income above $37,000 and disappears completely at income above $40,000. Individuals who are receiving such a contribution must be under 70 and if aged 65 to 69 must meet a work test.

A Government co-contribution up to $500 is also available for individuals with total incomes up to $36,813 for 2017–18 (phasing down for incomes up to $51,813).

Consolidate

While you can often choose the fund into which super is paid, you may already have more than one super fund. Look into consolidating your current super funds if this is the case because contributing to one super fund, rather than many different ones, will mean you spend less on fees (as each super has an administration fee). It is also is easier to keep track of one fund. Key things to consider when choosing a fund are the long-term average returns of that fund and the fees that are charged – make sure you are comfortable with both. Before switching funds, it is also important to consider any insurance implications. Some funds require new members to undergo a medical test before insurance benefits are granted, while other funds may automatically offer transferring members insurance under a group life policy.

Strategy for self-managed super fund – get advice

You may not be in a job where your employer pays your super, or you might want to manage your own super fund. If so, you could consider a self-managed super fund (SMSF). This is a legal structure (regulated by the ATO) with the specific purpose of providing for your retirement. There are similar rules and restrictions to ordinary super funds so it is important to seek advice from a licensed financial planner about whether an SMSF would suit your situation, how to set up your own fund and investment strategy going forward. 

Talk to us

Please contact our office to discuss your circumstances and find out how we can assist further. Call us at Robert Goodman Accountants on 07 3289 1700 or email us at reception@rgoodman.com.au . © Copyright 2018. All rights reserved. Source: Thomson Reuters.   Brought to you by Robert Goodman Accountants. 

IMPORTANT: Robert Goodman Accountants does not provide financial advice. All information on our blog is intended as a guide only. We recommend that you obtain independent professional accredited financial advice when considering whether the information is suitable to your personal circumstances.  We have associations with Financial Planners who specialise in providing independent SMSF, retirement & Estate Planning advice.