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INDEX
Updates
Deadlines
Staff Profile
Joke
FEBRUARY 2015
Hi <<First Name>>,

Welcome to this month's edition of Money Matters.

Check out our "Updates" section which covers the following issues ...
  • ATO has declared war on professional practices!
  • Data matching program - Motor Vehicles
  • ATO recovers super from phoenix operators
  • YouTube Earnings
Please contact us for further information or advice on any of these matters.

Regards,

IANTHE GIBSON 
BSc, Mcom (Prof Accounting), CA
m
0415 201 217

ANDREW CLARK 
BFinA, CA
m
 0419 668 550

ATO has declared war on professional practices!

 
War has been declared by the ATO on many professional practices being operated by accountants, lawyers, architects, doctors etc
 
Traditionally the ATO had a rule of thumb that income generated by a professional practice was not regarded as personal services income where there were ‘at least as many non-principal practitioners as principal practitioners’.  It was then accepted that income by these practices did not have to be included in the assessable income of the principal practitioner (this approach has been accepted by the ATO for decades).
 
The ATO have done a complete ‘backflip’ in relation to this issue and have released Taxpayer Alert TA 2013/3 as well as the draft guidelines titled ‘Assessing the risk: allocation of profits within professional firms’, and as such, the ATO will now require some professional practitioners to include greater amounts in their assessable income under these guidelines.
 
Thankfully, not all professional practices will be ‘in the gun’ from an ATO audit perspective and the guidelines have outlined 3 tests that must be considered when assessing whether a professional practice will be classified as high or low risk from an audit perspective. 

If a professional practice satisfies at least one of the 3 tests then it will be classified as low risk for audit purposes ...
  1. Equivalent remuneration test – must basically ensure that their assessable income includes an amount that is at least equal to the highest band of professional employees providing equivalent services to the firm
  2. 50% remuneration test – 50% or more of the income of practice is included in the assessable income of the professional practitioner
  3. 30% effective tax rate test – the effective tax rate of the professional practitioner and their entities must be at least 30% for the income received from the practice

Data matching program - Motor Vehicles


The ATO has announced a new "Motor vehicle data matching program" to collect details of individuals or businesses that have purchased or acquired a vehicle costing $10,000 or more in the 2011/12 and the 2012/13 financial years.

It will acquire information from every State and Territory vehicle registration authority.

It is expected that records relating to approximately 2.8 million individuals will be matched.  The program will enable the ATO to
address the compliance behaviour of individuals and businesses buying and selling vehicles who may not be correctly meeting their tax obligations and particularly will target ...
  • High risk non-lodgers
  • Those with undeclared income

 

ATO reminder on collectables and personal use assets held by self managed super funds (SMSF’s)

 
Collectables and personal use assets are things like artworks, jewellery, vehicles, boats, wine, gold/silver.
 
Investments  in such items must be made for genuine retirement purposes and not to provide any present day benefit. Therefore, personal use assets and collectables cannot be ...
  • Leased to a related party
  • Used by a related party
  • Stored or displayed in a private residence of a related party
In addition ...
  • the investment must comply with all other relevant investment restrictions, including the sole purpose test
  • the decision on where the item is stored must be documented (eg. In the minutes of a meeting of trustees) and written records  kept for at least 10 years
  • must be insured in the funds name within seven days of the fund acquiring it
  • if the item is transferred to a related party it must be at market price as determined by a qualified, independent valuer
For personal use and collectables held before 1 July 2011, the trustee has until 30 June 2016 to comply with these rules.

ATO recovers super from phoenix operators


Phoenix behaviour involves the deliberate liquidation of companies to avoid paying tax liabilities and other creditors and suppliers.
 
The ATO have recently used new powers to recover $8M in workers superannuation entitlements from the operators of labour hire companies who have engaged in phoenix behaviour.  
 
New powers, known as Superannuation Guarantee Estimates (SGE) allow the ATO to step in where it sees likely phoenix activity and protect workers super entitlements before companies try to liquidate.  The ATO can also issue director penalty notices which make directors personally liable for the company’s unpaid super.
 
Workers who suspect their employers are not paying their super entitlements should notify the ATO of their concerns by visiting  www.ato.gov.au/unpaidsuper
 

ID2014/41 – YouTube Earnings

 
A special professional is an author of a literary, dramatic, musical or artistic work, an inventor, a performing artist, a production associate or a sportsperson.  Special professionals are eligible for special professional income averaging  (a concessional tax treatment).
 
Income earned by individuals who are performing artists or production associates in relation to video’s they upload on YouTube will be deemed to be ‘above-average special professional income’ and assessed accordingly.
 
28 February
New SMSF registrants
3 March
December 2014 Quarterly BAS
21 March
February 2015 monthly IAS

Anastasia Tikhonova 


Anastasia started her career with Gibson Clark after completing a Bachelor of Commerce degree at Griffith University .

She has been an accountant with the company for approximately 18 months and Anastasia’s goal is to achieve perfection in the work that she performs.  Anastasia is a highly-motivated person inside and outside of work.

Outside of work, Anastasia likes to stay active and you will likely find her scuba diving, sky diving, swimming or boating. Anastasia also loves spending time with her large family and was recently married to Anton.

 

Exercise for People Over 50


This may seem a little daunting to start with, but if you apply yourself you may find that it's not as difficult as you think. 
 
Begin by standing on a comfortable surface, where you have plenty of room at each side.
 
With a 5kg potato sack in each hand, extend your arms straight out from your sides and hold them there as long as you can. Try to reach a full minute, and then relax.
 
Each day you'll find that you can hold this position for just a bit longer.
 
After a couple of weeks, move up to 10kg potato sacks.
 
The goal is to eventually get to use 25kg sacks, and be able to hold your arms out straight for a full minute. 

After you feel confident at that level, try putting a potato in each sack.
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Disclaimer
Advice contained in this newsletter is of a general nature only and may not apply to your individual circumstances. For specific advice relating to your specific situation, please contact us directly.
Copyright © 2015 Gibson Clark Pty Ltd, All rights reserved.


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