IN THIS ISSUE:

• Tax Discount for small traders increased
• Corporate Tax rate changes
• ATO- Safe Harbour provisions
• Are you ready for tax time?

Tax Discount for small traders increased

From 1 July 2016, the tax discount will increase to 8 per cent, and remain constant at 8 per cent for eight years, then increase to 10 per cent in 2024–25, 13 per cent in 2025–26 and reach a new permanent discount of 16 per cent in 2026–27

Corporate Tax rate changes

The government announced a reduction in the small business tax rate from 28.5 per cent to 27.5 per cent for the 2016–17 income year. This will exclude those entities exceeding the Aggregated Annual turnover of $10m this year and $25m 2017-18 where the rate of tax will remain at 30%

ATO- Safe Harbour provisions

What is ‘Safe Harbour’ ?

The safe harbour provisions aim to ensure that services provided to the public by bennetts tax & BAS service (and other registered practitioners) meet the appropriate ethical and professional standard.

Under the safe harbour provisions, a client will not be liable to certain administrative penalties if they provide all the relevant tax information to their tax agent

To obtain the benefits of “safe harbour” protection, the legislation requires the taxpayer to provide the registered tax agent with “all relevant taxation information” to enable accurate statements to be provided to the Australian Taxation Office. 

Over the next few months bennetts tax will be sending to current business clients a letter outlining the provisions and relevant statement for agreement and signature.   This document then provides the ’safe harbour’ provisions and protection if in the unlikely event there is a problem.

This document now forms part of the standard practice for all taxation and accounting professionals.

Are you ready for tax time?

Now is a good time to start collecting and recording your work related expense claims.

If you intend to claim vehicle mileage for work – do you have a log book?

Are you keeping a record made of telephone and internet usage for work?

ATO has issued guidelines on the deductability of work related expenses in that an ‘estimate’ of use is longer acceptable – ATO requires diarised evidence or for example a phone bill that lists all the numbers called in relation to work or some other reasonable evidence of a claim. If you are unsure – call me now to discuss.