Tag: BAS

Key Dates for November & December 2018

NOVEMBER 2018 
11 NOVEMBER – July-September quarterly Activity Statements – due for lodgement and payment. (if lodging electronically)
21 NOVEMBER – October monthly Activity Statements – due for lodgement and payment. 
28 NOVEMBER – Superannuation Guarantee Charge (SGC) Statement – due for lodgement and payment if insufficient contributions or late contributions were made for the July-September quarter.

DECEMBER 2018 
01 DECEMBER – Due date for income tax payments for companies that were required to lodge by 31 October.
21 DECEMBER – November monthly Activity Statements – due for lodgement and payment.

Where the due date falls on a weekend or public holiday, it is deferred until the next business day (except in the case of Superannuation Guarantee deadlines) 

GST SBE Concessions

SMALL BUSINESS ENTITIES

Small Business Entities have access to a range of GST concessions including accounting on a cash basis, paying GST by instalments, an annual apportionment of GST credits, and a new Simplified BAS. Are you taking advantage of these concessions?

SBE Defination Extended!
New law has now been passed by Parliament expanding the definition of Small Business Entity (SBE).

Backdated to 1 July 2016, to qualify as an SBE you must be carrying on a business and have an annual turnover of less than $10 million – including the turnover of any connected entities or affiliates. This is up from the previous turnover threshold of $2 million. Treasury estimates that this change will open the way for an additional 90,000 to 100,000 businesses (i.e. those with a turnover of between $2 million and $10 million) to access the following GST SBE concessions:

New Law – Simper BAS
SBEs  may now be eligible to complete a simplified Business Activity Sttement (BAS) under the new Simpler BAS rules.

At its core Simpler BAS involves the reduction in the number of labels on the BAS. Under Simpler BAS SBEs now only need to report the following GST information on their BAS:
  • GST on sales (label 1A)
  • GST on purchases (1B)
  • Total sales (G).
SBEs are no longer required to report Export saels (G2), other GST-free sales (G3), Capital purchases (G10), and Non-capital purchases (G11). These labels are removed from the BAS altogether. Simpler BAS is aimed at simplifying BAS preparation, but also account set-up within a software file, and GST bookkeeping. To this end, the ATO has worked closely with software companies to streamline the coding of transaction for users of Simpler BAS. Within the software under Simpler BAS, you will only have three tax codes to choose from which wil generally be: GST, GST-free or Out of Scope. This may assist by making it easier to classify transactions with the other tax codes not relevant (e.g. Capital Purchases etc.).

ACTION POINT
  • SBEs do not need to opt-in to Simpler BAS – it is compulsory. The ATO will automatically send out these streamlined BAS to eligible SBEs. If you are an eligible SBE and you do not receive the simplified BAS, you should contact the ATO.

CAUTION
In theory, with the reduction in labels, Simpler BAS will make GST reporting and bookkeeping requirements simpler. This may encourage SBEs to bring the BAS function in-house rather than pay a Bookkeeper or Accountant to prepare your BAS. However, a word of caution! Although for GST purposes there will only be 3 classification, complexities will still arise in determining which supplies and purchase attract GST and which do not. A reduction in reporting labels does not change the complex GST law that sits behind thoise labels. Therefore, while moving the BAS function in-house may be appealing in terms of cost, you may wish to leave BAS preparation in the hands of your Bookkeeper or Accountant and enjoy the peace of mind and time savings that this brings.

Accounting on a Cash Basis
SBEs can elect to account on a cash basis. This means they can:
  • Claim GST credits on business purchases in the tax period in which you pay for those purchases. If you pay only part of the cost of a business purchase in a tax period and have a valid tax invoice, you will only claim GST credits for that part of the cost you payed for in that tax period.
  • Account for the GST payable on your sales in the tax period in which you receive payment. If you only receive part payment for a sale in the tax period, you will account only for the part of the GST payment that relates to that part of the sale in that tax period.

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RIDE-SOURCING IS TAXI TRAVEL

The Federal Court last month dismissed and appeal from Uber, and confirmed the ATO view that ride-sourcing (ride-sharing) does constitute ‘tax travel’ for GST purposes. Consequently, the ATO has advised that unless Uber appeals this decision, it will continue to administer the law in accordance with its published guidance. We now detail what this treatment is from a driver’s and passenger’s perspective.

DRIVER

Ride-sourcing drivers have a range of tax obligations as follows:
  • As ride-sourcing constitutes taxi travel, they must register for GST from when they sign up as a driver. The normal $75,000 GST registration threshold does not apply.
  • They must keep records of their expenses and income.
  • They must have an ABN.
  • They must pay GST to the ATO on the full fare (including any commission they pay to the facilitator e.g. Uber) for each trip they provide.
  • They must lodge Business Activity Statements
  • They or the facilitator must provide passengers with a tax invoice when they request it and where the fare exceeds $82.50 (GST-inclusive).
  • They must include the fares as income on their tax returns.

On the plus side, drivers are able to claim the GST and income tax deductions on expenses that they incur in driving such as insurance, petrol, registration, the facilitator’s commission, and also depreciation of the motor vehicle. However, these claims must be apportioned to take account of any private use of the vehicle.

PASSENGER

From a GST perspective if the fare is work-related, GST registered taxpayers can claim this component of the fare back on their Business Activity Statement. If the amount of the fare is under $82.50 (GST-inclusive) you will not need a tax invoice to do so. If the fare is over this amount, you should request a tax invoice in order to claim the GST.

From an income tax perspective, passengers can claim a tax deduction if the fare is work-related and would be deductible if you were driving that route yourself.