Federal Court rules on arrangement to avoid PAYG deductions


The Federal Court has dismissed the taxpayers’ appeals against an Administrative Appeals Tribunal (AAT) decision. The AAT had ruled against one of the taxpayers (a company as trustee of a trust) concerning an alleged sham arrangement, input tax credits denied, GST shortfall penalties, a penalty for not withholding and remitting pay as you go (PAYG) tax amounts, and certain income tax deductions. Two additional taxpayers (a couple) were also unsuccessful before the AAT in a consequential matter – amended assessments had increasing their taxable incomes due to an increase in trust income and..

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Working holidaymakers and tax returns for 2017


If your business employs working holidaymakers – or you’ve been one yourself this year! – you need to know about the “backpacker tax” changes that came into effect from 1 January 2017. Employers needs to issue two payment summaries to each working holidaymaker for the 2016–2017 financial year: one for income earned up until 31 December 2016; and one for income earned after 1 January 2017 (using payments code H). All employers need to include code H on payment summaries of backpacking workers’ post-1 January income, even if the employer isn’t registered with the..

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Small businesses with tax debts: setting up a payment plan


The ATO reminds small businesses that if they have a tax debt of $100,000 or less, they can take advantage of the ATO’s self-help service to set up a payment plan in two easy steps: Use the payment plan estimator to work the options. With their Tax File Number (TFN) or Australian Business Number (ABN) on hand, set up a payment plan by either phoning the ATO’s automated service on 13 72 26 or using the online services for sole traders and individuals on their myGov account. In some circumstances, the ATO says, a business may be eligible for interest-free payment plans for activit..

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Employee travel expense deductions


The ATO has also released new guidance on work-related travel deductions. To claim for transport or other employee travel expenses (like accommodation and meals) in your tax return, you must have incurred the expenses as part of gaining or producing your taxable income. Private and domestic travel expenses, including the costs of your ordinary home-to-work travel, aren’t claimable. Transport costs for work-related travel may be deductible, but the ATO will consider factors such as: whether the travel is a necessary part of performing your work (you can’t pretend your family holiday..

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