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Spry Roughley Articles

Work-related tax deductions down for 2018

The ATO has reported a decline in the overall value of work-related deductions for tax time 2018. In his opening statement to Senate Estimates on 24 October 2018, ATO Commissioner Chris Jordan said taxpayers appear to have taken extra care when claiming work-related expenses in their 2017–2018 income tax returns. This follows recent ATO initiatives to close the income tax gap for individuals, which was estimated at $8.7 billion or 6.4% in 2014–2015. By far the most common driver of the tax gap was incorrectly claimed work-related expenses. A lot of individuals were over-claiming work-related by small amounts, which adds up to a lot, Mr Jordan said. In response, the ATO stepped up its awareness and education efforts to help people get it right for tax time 2018.  Read more…

ATO identifies 26,000 incorrect rental property travel expense claims

The ATO has identified 26,000 taxpayers who have claimed deductions during tax time 2018 for travel to their investment residential rental properties, despite recent changes to the tax laws that disallow such claims. From 1 July 2017, investors cannot claim travel expenses relating to inspecting, maintaining or collecting rent for a residential rental property as deductions, subject to certain exceptions: s 26-31 of the Income Tax Assessment Act 1997 (ITAA 1997).  Read more…

Small business corporate tax rates Bill is now law

The Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 received assent on 25 October 2018 as Act 134 of 2018 and has become law.  Read more…

GST reporting: common errors and how to correct them

The ATO has reported that some businesses are making simple mistakes reporting their GST, and has reminded taxpayers to avoid the following common GST reporting errors:  Read more…

Government announces super refinements

In a media release on 31 October 2018, Assistant Treasurer Stuart Roberts announced that the Government will make technical changes to the superannuation tax law to address some minor but important issues, as part of the ongoing super reforms. The changes are in the following areas:  Read more…

Capital gains tax on grant of easement or licence

Taxation Determination TD 2018/15, issued on 31 October 2018, considers the CGT consequences of granting an easement, profit à prendre or licence over an asset.  Read more…

First Home Super Saver scheme: Australian Taxation Office guidance

On 1 November 2018, the ATO issued Super Guidance Note SPR GN 2018/1 to provide general information about the First Home Super Saver (FHSS) scheme. The guidance note explains who is eligible to use the scheme, the kind of contributions that can be released, how to apply for a FHSS determination and the requirement to purchase a house. Interesting points made in SPR GN 2018/1 include that:  Read more…

Downsizer super contributions: ATO guidance

The ATO issued the following products on 7 November 2018 to provide guidance on the recently enacted downsizer superannuation contributions measure:
  • Law Companion Ruling LCR 2018/9, which focuses on the numerous conditions that must be satisfied for a contribution to qualify as a downsizer contribution. This ruling finalises Draft LCR 2018/D4 and contains the same views as the draft.
  • Super Guidance Note SPR GN 2018/2, which contains detailed general information and examples for individuals.  Read more…

ATO scam alert: fake demands for tax payments

Although tax time 2018 is over, the ATO has warned taxpayers and their agents to remain on high alert for tax scams. Assistant Commissioner Kath Anderson has said scammers are growing increasingly sophisticated and hope to exploit vulnerable people, often using aggressive tactics to swindle people out of their money or personal information. The ATO has noticed an increasing trend of scammers demanding tax payments through Bitcoin ATMs.  Read more…

Government to establish $2 billion fund for small business lending

The Government has announced that it will establish a $2 billion Australian Business Securitisation Fund. Treasurer Josh Frydenberg said small businesses currently find it difficult to obtain finance on competitive terms (unless the finance is secured against real estate). To overcome this, Mr Frydenberg said, the proposed Australian Business Securitisation Fund will invest up to $2 billion in the securitisation market, providing additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms. The Australian Business Securitisation Fund will be administered by the Australian Office of Financial Management (AOFM), consistent with its prior involvement in the Residential Mortgage Backed Securities Market in 2008.  Read more…

ATO information-sharing: super assets in family law proceedings

The Government has announced that it will develop an electronic information-sharing mechanism between the ATO and the Family Law Courts to allow superannuation assets held by relevant parties during family law proceedings to be identified swiftly and more accurately. The measure was included as part of a broader financial support package for women announced on 20 November 2018.  Read more…

Transfer balance cap: ATO highlights admin issues

On 30 August 2018, ATO Assistant Commissioner Superannuation Tara McLachlan gave a speech on Administration issues under the transfer balance cap

at the Tax Institute Sixth National Superannuation Conference. She highlighted the following:  Read more…

Australian Small Business White Paper: tax reform a key

After more than 18 months of extensive research and consultation, the Institute of Public Accountants (IPA) and the IPA Deakin SME Research Centre have released the second edition of the Australian Small Business White Paper.  Read more…

ATO expects 200,000 to miss out on refunds by failing to lodge

The ATO expects that 200,000 individuals could miss out on a tax refund this year by failing to lodge a return.  Read more…

Black economy: electronic sales suppression tools now banned

Activities involving electronic sales suppression tools (ESST) and that relate to people or businesses with Australian tax obligations are now legally banned, effective from 4 October 2018. This is part of the measures under the recently passed Treasury Laws Amendment (Black Economy Taskforce Measures No 1) Bill 2018. People or entities may be liable for criminal and administrative penalties if they produce, supply, possess or use an ESST or knowingly assist others to do so.  Read more…

Super work test exemption for recent retiree contributions

The Government has released draft legislation and regulations to give effect to its 2018–2019 Federal Budget measure to provide a one-year exemption from the work test for superannuation contributions made by recent retirees aged 65–74 who have total superannuation balances less than $300,000. Currently, individuals aged 65–74 must work at least 40 hours in any 30-day period in the financial year in which the contributions are made (the work test) in order to make voluntary contributions.  Read more…

Bringing forward small business tax cuts by five years

Prime Minister Scott Morrison has announced that the Government will bring forward its planned tax cuts for small business by five years. He said the Government would introduce the necessary legislation in Parliament during mid-October 2018. Labor has indicated it will support the bring-forward of the tax cuts, thereby ensuring quick passage of the legislation through Parliament.  Read more…

Business tax rates and small business tax offset changes

The Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 was introduced into and passed by the House of Representatives on 16 October 2018 and passed by the Senate on 18 October 2018. The Bill implements the proposal to accelerate reduction of the tax rate for base rate entities (ie corporate tax entities that derive no more than 80% of their income in passive forms and have an aggregated turnover of less than $50 million).  Read more…

Residential rental property travel expenses: ATO guidance

From 1 July 2017, non-business travel costs incurred by individuals, self managed super funds (SMSFs) and "private" trusts and partnerships in relation to residential rental properties are not deductible (s 26-31 of the Income Tax Assessment Act 1997). Such expenditure is also excluded from forming part of the cost base or reduced cost base of a CGT asset.  Read more…

Tax on compensation received for inappropriate advice

The ATO has recently provided information about how the tax system applies for someone who receives compensation from a financial institution that provided inappropriate advice and/or did not provide advice it should have. This can include compensation for the loss of an investment, or a refund of fees or interest.  Read more…

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