A.S.A.P  Accounting & Taxation P/L 

ASAP Accounting & Taxation can help you navigate the accounting and tax responsibilities that come with running a business. We can advise you on the best structure to set up your business. We can also assist you in the setting up of a Company, Partnership, Trust or Self-Managed Super Fund.

Our team is experienced and dedicated to providing timely and proactive solutions for all your accounting, taxation and business needs. In fact our experience covers the whole realm of tax and associated accounting and business advisory, from compliance to growth and tax-effective strategies. 

The First thing to know is: What is a tax deduction?

The ATO criteria and definition of a tax deduction is:

1. It must be spent
2. It must be necessarily incurred in earning your income.

A definition we use is: A tax deduction is an expense that is related to your income.

No matter how complex the system becomes with new taxes and different laws, fundamentally the basic formula applies; whenever you spend money to make money that's a tax deduction, but only if you were making money first!

"Willingness to look outside the box is required by both you and us."

The size of your tax deductions is directly related to your ability to know and track all your expenses.

Using our definition of a tax deduction, you can easily determine if an expense is a tax deduction or not. If you're unsure, then by all means ask us. A proactive accountant is one who works with you to really maximise your deductions, but it is up to you to first make sure you've tracked and included all possible expenses. If you don't tell ASAP Accounting & Taxation that you spent $100 on tolls or include it in your bookkeeping, how will it ever be deducted?

The simple act of seeing how an expense could legitimately be related to your income producing activity is the key and it also, incidentally, gives you a great index as to the pro activeness of your accountant. ASAP Accounting & Taxation are willing to try and see how an expense can be related we don't just dismiss the "tricky" ones without regard.

For example, if your job entailed a considerable amount of time working outdoors then safety sunglasses could be a related expense. But you'd have a tough time relating sunglasses to an office job!

Therefore, willingness to look outside the box is required by both you and ASAP Accounting & Taxation.

The first step, however, is to record the sunglasses as an expense. If you're ever in doubt as to whether an item is an expense or not, include it in your bookkeeping and nut it out with ASAP Accounting & Taxation at tax time. If you fail to record it in the first place then you've lost the opportunity to claim it altogether.

So part of being an investor or business owner is making that extra effort to record and claim all that you legitimately can. After all, you've worked for the money and by organising your paperwork you'll be able to keep that little bit extra in your back pocket!

So don't forget to stop and ask yourself "How can this expense be legitimately related to my income?" 

1. Table 1: BAS agent concessions – monthly lodgment obligation

   Monthly lodgment obligation	Due date	BAS agent concession for lodgment and payment if lodging by Online services for agents or PLS
   Activity statement	21st of the following month	Not applicable   The electronic lodgment and payment concession does not apply to standard monthly activity statements.
   December activity statement	21 January	21 February – December monthly business activity statements for business clients with up to $10 million turnover who report GST monthly and have elected to receive and lodge electronically using a registered agent.

   Table 2: BAS agent concessions – quarterly lodgment obligation

   Quarterly lodgment obligation	Original due date	BAS agent concession for lodgment and payment if lodging by Online services for agents or PLS
   Quarter 4, 2019–20	28 July 2020	25 August 2020
   Quarter 1, 2020–21	28 October 2020	25 November 2020
   Quarter 2, 2020–21	28 February 2021	Not applicable
   Quarter 3, 2020–21	28 April 2021	26 May 2021
   Quarter 4, 2020–21	28 July 2021	25 August 2021   To be confirmed when the BAS agent lodgment program 2021–22 is developed

STP works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.

You will:

• run your payroll
• pay your employees as normal
• give them a payslip.

Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.

Your STP-enabled payroll software will send a report to the ATO which includes the information they need from you, such as:

• salaries and wages
• pay as you go (PAYG) withholding
• super liability information.

The employer reporting guidelines from ATO contains a full list of payments that must be reported through STP.

Super funds will also be reporting to the ATO. They'll let them know when you make the super payment to your employees' chosen or default fund. This is an important step toward making sure employees are paid their correct entitlements.

ATO systems will match the STP information to our employer and employee records.

If your employees have a myGov account linked to ATO online services, they will be able to see their year-to-date tax and super information in their Income statement. Their data is updated every time you report. For most employers, this will be each pay day.

At the end of the financial year you'll need to finalise your STP data. This means you are making a declaration that you have completed your reporting for the financial year.

Once you finalise your data, your employees' Income statement in ATO online services will be marked as 'Tax ready'. They, or their registered agent, will use the Income statement to lodge their tax return.

You won't need to provide the ATO with a payment summary annual report for the payments you report through STP.

If you currently lodge an activity statement you will continue to do so.

You need to register for GST if you run a business or enterprise and your GST turnover is $75,000 or more ($150,000 or more for non-profit organisations).

If you're not registered for GST, check each month to see whether you've reached the threshold, or are likely to exceed it. If you're turnover exceeds the relevant threshold, then you must register within 21 days of reaching it.

ASAP Accounting & Taxation can help you register when you first register your business or at any later time.

So, what is on the ATO’s list this year? Well, essentially, they’re looking at two main areas; work-related expenses and claims made by investment property owners.

The ATO recently claimed that there was an $8.7 billion shortfall between the tax individuals are expected to pay and the tax they actually are paying. The ATO believes that Work-related expenses claims are the biggest element in that “tax gap” and have signaled that they’ll be looking closely at these deductions this year. In particular, they’ll be looking closely at:

• Claims for work-related clothing, dry cleaning and laundry expenses (for instance the ATO has flagged that it will be checking taxpayers who take advantage of the exemption from keeping receipts for people who spend less than $150 on laundry expenses; the ATO believes that too many people are claiming this without actually incurring the expense)
• Deductions for home office use, including claiming for “occupation” costs like rent, rates and mortgage interest, which are not allowable unless you’re actually running a business from home.
• Crypto Trading
• Copy/Pasting claims from previous year
• Mobile phone and internet costs, with a particular focus on people who are claiming the whole (or a substantial part) of the bill for their personal mobile as work-related
• Motor vehicle claims where taxpayers take advantage of the 68 cent per kilometre flat rate available for journeys up to 5,000kms (the ATO is concerned that too many taxpayers are automatically claiming the 5,000km limit regardless of the actual amount of travel)
• Incorrectly claiming deductions under the rule that allows taxpayers who have incurred work-related expenses of $300 or less in total to make a claim without receipts (the ATO believes that some taxpayers are claiming this – or an amount just less than $300 – without actually incurring the expenses at all).

ASAP can help register you for an ABN or re-Activate an old ABN with one simple phone call to (02) 4578 6088.

Your ABN is a unique 11-digit identifier that makes it easier for businesses to interact.

You will need an ABN to:

• Operate in the GST system, including claiming GST credits
• avoid Pay as you go (PAYG) tax on payments you receive
• confirm your business identity to others when ordering & invoicing

The ATO has committed to implement a series of administrative steps to help Australian taxpayers who will go through financial difficulty as a result of the COVID-19 pandemic.

The Commissioner Chris Jordan is encouraging businesses affected by the coronavirus to get in touch with the ATO to discuss relief options. “We know that many businesses and communities are being heavily affected by the challenging economic conditions created by the outbreak of COVID-19,” he said.

“The ATO will work shoulder-to-shoulder with businesses to assist them through this difficult period and do what we can to ease the pressure. Once you contact us, we’ll tailor a support plan for your needs and circumstances,” Jordan said.

“Support measures could include deferral of some payments, quicker access to GST refunds, and options to enter low interest payment plans for existing or future tax debts.”

The ATO flags that it understands this is a time of significant uncertainty, and that it realises it will need to be flexible in how it helps out businesses. It reminds practitioners that they should inform their clients of the following options available to assist businesses impacted by COVID-19. Steps include:

• Deferring by up to six months the payment date of amounts due through a BAS (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
• Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
• Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
• The ATO will work with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

Employers will still need to meet their ongoing SG obligations for their employees.

To make it easier for people to apply for relief, the ATO will be increasing its presence in the areas of highest impact. It says a temporary shopfront with staff specialising in assisting small business will be established in Cairns within the next few weeks. In addition, it is looking at the ways it can enhance its presence in other significantly affected regions, making it easier for people to apply for relief. Additional temporary shopfronts and face-to-face options are currently under consideration.

The ATO will also continue to work with the tax profession, other government agencies and local organisations to make sure other affected communities are also supported during this time. It says it will “ensure its services are tailored to the needs of the community and will work with taxpayers and their tax agents to tailor support to their individual circumstances”.

Outside of business, the ATO will also work with individuals experiencing financial hardship, and their tax agents, and will apply appropriate tax relief measures for serious and exceptional circumstances, such as where people cannot pay for food or accommodation.

Unlike the bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by COVID-19 will not be automatically implemented.

Anyone impacted by COVID-19 is advised to contact the ATO to request assistance on its Emergency Support Infoline 1800 806 218, when they are ready, to discuss their situation.

Please feel free to call us on 4578-6088 if additional assistance is required.

Josie & Amanda