Sky Update – February 2017


In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.

New ATO data-matching program: ride-sourcing

The ATO has announced a new data-matching program involving ride-sourcing providers. Under the program, the ATO will acquire data to identify individuals who may be engaged in providing ride-sourcing services during the 2017 and 2018 financial years.

Details of all payments made to ride-sourcing providers from accounts held by a ride-sourcing facilitator will be requested from the facilitator’s financial institution for the 2017 and 2018 financial years.

The ATO estimates that up to 74,000 individuals (ride-sourcing drivers) offer, or have offered, the services.

If you work as a driver for Uber or a similar ride-sourcing facilitator, the money you make is assessable income that needs to be included in your tax return.

Additionally, the Federal Court has recently handed down a decision which confirms that ride-sourcing drivers are required to be registered for GST regardless of whether they earn more or less than the usual GST registration threshhold of $75,000 pa.

Taxation ruling on commercial website deductibility

A new taxation ruling from the ATO sets out the tax deductibility of expenditure incurred in acquiring, developing, maintaining or modifying a commercial website for use in carrying on a business.

Broadly, the ruling explains that acquiring or developing a commercial website for a new or existing business is considered to be a capital expense, and is therefore not deductible.

On the other hand, maintaining a website, including remedying software faults, is generally an expense that will be deductible.

2016 Income Tax Return Lodgement

For most taxpayers that use a Registered Tax Agent (ie Sky Accountants) to lodge their income tax returns, the due date for lodgement of the 2016 income tax return is 15 May 2017.

As this date is fast approaching, we recommend that clients get in contact with us to schedule the preparation of their financial statements and/or their income tax return.

Research & Development (R&D) – Taxpayer Alerts Issued

The ATO and Department of Industry, Innovation & Science have released four Taxpayer Alerts relating to the R&D Tax Incentive.

The first alert concerns the building & constrution industry where specifically excluded expenditure is being claimed as R&D expenses.

The second alert concerns claims where activities are too broadly described and non-specific and where some of the activities registered are ordinary business activities that do not meet the requirements.

The third and fourth relate to the agriculture and software development industries and air similar concerns regarding the registering of ordinary business activities that do not meet the requirements.

These Taxpayer Alerts serve as a reminder to businesses to ensure that any R&D activities registered are eligible and that the related expenditure is allowable.

Please contact our office if you require guidance on eligible activities, allowable expenses and record keeping requirements under the R&D Tax Incentive.

Fuel Tax Credit Rate Change

Fuel Tax Credit rates have increased with effect from 1 February 2017.

If you use eligible fuels in your business and claim Fuel Tax Credits, please be careful to ensure that you calculate your claim using the correct rates.

Fair Work Ombudsman’s Pay & Conditions Tool

Recent media reports concerning alleged underpayment of workers by franchisees of Domino’s Pizza and 7-Eleven, highlight the need to be extra vigilant to ensure that employees are paid correctly.

This is particularly the case in retail and hospitality where there can be significant complexity around award classifications, penalty rates, etc.

The Fair Work Ombudsman’s P.A.C.T is a good way for businesses to check that they are paying employees correctly.

Working Holiday Makers

Businesses in the agriculture and hospitality industries often employ working holiday makers to meet seasonal demand.

If your business employs workers who are in the country on a Working Holiday visa (subclass 417) or a Work and Holiday visa (subclass 462), you need to be aware of new rules that affect the calculation of PAYG withholding to deduct from their wages.

For more information, please contact our office.

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