As the cooler weather sets in Its hard to believe we are nearly at the end of another financial year. If you’re considering a change of accountants the this time of year is a great time to do this. With our industry knowledge we will work along side you to help you achieve your financial goals.
The ATO has announced its priorities for this tax year and what they’ll be focusing on. If you’ve got contractors working for you the recent High Court decision emphasises the importance of knowing the difference between a Contractor and an Employee.
We’ve also got a rundown on some government funding that your business could be eligible for.
Priorities for the ATO this tax time
The shift to the digital economy is making it easier for the ATO to data match and follow the money train. They are now data matching with not only banks and insurance companies but from areas such as ride sharing, online market places and crypto trading platforms.
The ATO has announced four key focus areas they will be focussing on for Tax Time.
Assistant Commissioner Tim Loh explained that “The ATO is targeting problem areas where we see people making mistakes”
Record-keeping
The ATO have said they will being taking firm action with people who deliberately try to increase their refund, falsify their records or cannot substantiate their claims.
Work-related expenses
With more people working from home; one-in-three taxpayers claiming working-from-home (WFH) expenses in their tax return last year.
The ATO expects WFH costs will likely be higher again this financial year but they expect other work-related expenses to be less; including motor vehicles, clothing and such things as parking and tolls.
Rental property income and deductions
If you are a rental property owner, make sure you include all the income you’ve received from your rental in your tax return, including short-term rental arrangements, insurance payouts and rental bond money you retain.
Capital gains from crypto assets, property, and shares
Cryptocurrencies have been become a popular asset and the ATO intends to target undeclared profits on both cryptocurrencies and non-fungible tokens (NFTs).
Employer Beware – Contractors v Employee
The recent High Court decision in the case CFMMEU v Personnel Contracting [2022] HCA 1 and ZG Operations v Jamsek [2022] HCA 2 emphasises the importance of knowing the difference between a Contractor and an Employee. The high court’s decision in favour of the applicant was based on the fact that the labour was subordinate or subservient to the core business being carried on by Personnel Contracting. Mr McCourt (the applicant) was not, in any meaningful sense, in business for himself. In supplying his labour, Mr McCourt was subject to the control of Personnel Contracting. Accordingly, Mr McCourt was an employee of Personnel Contracting.
If you have ongoing contractors working in your business it could be a costly experience if things go south and the contractor claims they were an employee.
The court decision has shown that it’s not the ‘label’ (contractor) that’s important but rather what is actually happening in the workplace. If the contractor is found to be an employee the penalties and employee entitlements can easily add up to over $100,000.
Up to 80% of cases brought before the tribunal are due to a disgruntled contractor making a complaint that they should be paid as an employee.
There is little leniency for small businesses, penalties are likely to apply regardless of the size of the business.
Work arrangements change over time and your ‘contractors’ may look more like employees as time goes on. Review your contractors work arrangements and make sure they are still ‘contractors’.
The ATO
Employee/contractor decision tool
is a good place to start
Government Grants and Funding Opportunities
NSW Funding for Flood Affected Small Businesses
If your small business or not-for-profit organisation in northern NSW was impacted by storms and floods in February and March 2022, you may be eligible for a one-off $10,000 small business northern flood grant.
Your small business or not-for-profit organisation must be physically located and operating in one of the following highly impacted Northern Rivers local government areas (LGAs) to be eligible:
Ballina
Byron
Clarence Valley
Lismore
Kyogle
Richmond Valley
Tweed Shire.
Check Services NSW for eligibility
SEQ and regional Queensland funding available
Applications open for:
regional Queensland at 9am, 16 May 2022
South East Queensland at 9am, 17 May 2022.
For this round, there are 2 funding streams based on what Local Government Area (LGA) eligible businesses are headquartered. These LGAs are grouped into either South East Queensland or regional Queensland.
You may be eligible for a single up-front fixed grant payment of $5,000 (excluding GST).
The grant is for funding activities from the 5 priorities
Training and coaching
Website build or upgrades
Professional business advice
Strategic marketing services
Business continuity and succession.
The program is administered by the Department of Employment, Small Business and Training (DESBT).
Click here for more details
If you’d like to discuss how we can help please contact us today.
