QBCC licenses – big changes in 2019

The Queensland Building and Construction Commission (QBCC) are strengthening the minimum financial reporting requirements for license holders so the QBCC can more clearly monitor the financial position of licensees and take appropriate action where a licensee may be operating a financially unsustainable business.

From 1 January 2019, all licensees will be required to provide financial information annually to the QBCC (this was the position prior to 2014).  For licensees with a turnover between $800,000 and $30 million, the minimum financial requirements report will need to be substantiated by an appropriately qualified accountant.

Also, if a licensee is relying on a Deed of Covenant, they will need to provide detailed financial information about the Covenantor to the QBCC.

If the turnover of a licensee is below $800,000, they will still be required to provide financial information to the QBCC, however, they will not need to have their information certified by an appropriately qualified accountant.

Licensees with a turnover above $30 million will need to have their financial reports audited.

Licensees will also be required to report a significant decrease in Net Tangible Assets (30% for licensees with a turnover below $30 million or 20% for licensees with a turnover above $30 million).  This will require licensees to monitor their net tangible asset position on an on-going basis.

 

What do I do if I currently hold a QBCC license?

If you currently hold a QBCC license, you will need to check the category of your license.  If your turnover is between $800,000 and $30 million, you will require a minimum financial requirements report prepared by an accountant using your results from 30 June 2019.  If this applies to you, we recommend contacting us as soon as possible on (07) 56656469 to discuss your QBCC reporting requirements.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

PPSR charges – is yours about to expire?

he PPSR (Personal Property Securities Register) commenced in January 2012.  Owners of personal property (this is any property other than land, building or fixtures) are able to register a charge over their property for a maximum of 7 year. 

If you registered a 7 year charge on your personal property at the start of the register in January 2012 your charge will expire in January 2019.  There are approximately 120,000 registrations that will require action prior to January 2019 to ensure they remain active.

We recommend that you check the expiry dates of your registered security interests.  The PPSR have a free search tool available for you to check the expiry date of your registered interests:

https://www.ppsr.gov.au/how-get-your-registrations-due-expire-report

It is also important that you review your overall asset protection strategy with your commercial lawyer to ensure that all of your assets are appropriately protected.

We recommend that you speak with your commercial lawyer to seek further advice about your PPSR registrations and the overall protection of your assets.  We work closely with several commercial lawyers.  Please feel free to call us if you would like a referral to one of these lawyers to discuss your PPSR registrations.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

$20,000 instant asset write-off

Currently, small businesses (with a turnover of less than $10 million) that buy an asset that costs less than $20,000 can claim an immediate tax deduction for the purchase.

The recent Federal budget announced that the $20,000 threshold will be extended to 30 June 2019 (at which time the deduction threshold will reduce to the former limit of $1,000).

If you are a small business and you purchase an asset for more than $20,000 you can still depreciate the asset in the small business depreciation pool (which is depreciated at 15% in the first year and 30% in the following years). 

If you run a small business and are thinking about purchasing (or financing) a new asset (eg. a vehicle or a large equipment), we recommend that you do this prior to 30 June to get a tax deduction for it in the current financial year.

If you would like to know more about your business’ eligibility to the $20,000 instant asset write-off please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Personal superannuation contributions

From 1 July 2017 individuals may be able to claim a personal tax deduction for contributions to superannuation.  (Prior to this, individuals could only claim a personal tax deduction if they were substantially self-employed.)

If you want to claim a personal tax deduction, you will need to:

  1. Ensure the contributions are received by your superannuation fund prior to 30 June;

  2. Give your superannuation fund a “Notice of Intention to Claim a Deduction for Personal Super Contributions”;

  3. Receive an acknowledgement letter from your fund prior to lodging your 2018 tax return.

Remember that the maximum concessional (deducted) contribution that individuals can claim for the 2018 year is $25,000.  If you are an employee and you wish to make additional deducted superannuation contributions (on top of the contributions made by your employer), you will need to ensure that the combined contributions do not exceed the $25,000 concessional cap.

If you would like to discuss your eligibility to claim a deduction for a personal superannuation contribution, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Federal Budget 2018-19

Last night Federal Treasurer Scott Morrison handed down his third budget.  While there were no shocks or great surprises in the announcements, there were some welcome tax reform measures.

A shared feeling among most budget commentators is that this was a “victimless” budget – that is, no one particular group suffered from the announcements.

So what did we like in the Budget?  Individual taxpayers will appreciate tax cuts via a low and middle income tax offset and the changes to the tax brackets.  Small businesses will get an advantage from the extension of the $20,000 instant asset write-off (and the proposed reduction to the company tax rate as announced in previous Budgets).  Retirees have not had any significant changes made to superannuation – which is a welcome change for an industry still trying to come to grips with the superannuation changes made from previous budgets.  Scott Morrison also confirmed that the Government will not be making any changes to the current franking credit regime (we await the opposition’s Budget response to see if they will continue with their suggested changes to franking credits).

The tax changes proposed in last night’s Budget will now become part of the upcoming federal election battleground.  We hope that the proposed cuts to the company tax rate and the removal of the 37% individual tax bracket will be high on the Government’s agenda.

We’ve outlined below some of the main tax and other business measures that were announced in the Budget.

As with all budgetary measures, these measures are not final until the relevant legislation has been passed by the Government.  As such, it is important that you use caution in acting on these measures until they have become law.  We will keep you updated on the status of these proposed measures.

 

Businesses

  • Instant Asset Write-off – The $20,000 instant asset write-off for small businesses (who have an aggregated annual turnover less than $10 million) has been extended to 30 June 2019.  Assets acquired for more than $20,000 will be pooled and depreciated at 15% in the first year then 30% each year thereafter.  The balance of this pool can be written off when it is less than $20,000.

  • Taxable Payments Annual Reporting System – From 1 July 2019, the taxable payments annual reporting system to be expanded to the following industries:

    • Security providers

    • Investigation services

    • Road freight transport

    • Computer system design and related services.

 

The taxable payments annual reporting system already applies to the building industry and will extend to the cleaning and courier industries from 1 July 2018.

  • Non-compliant payments – From 1 July 2019, businesses will not be able to claim deductions for payments to their employees, such as wages, where they have not withheld any amount of PAYG from the payments, despite the PAYG withholding requirements applying.

  • Non-compliant payments – From 1 July 2019, businesses will not be able to claim deductions for payments to contractors where the contractor does not provide an ABN and the business does not withhold any amount of PAYG despite the withholding requirements applying. 

  • Director Penalty Notices – Currently, under the Director Penalty Regime, the ATO can make directors personally liable for superannuation and PAYG withholding.  The Director Penalty Regime is set to extend to GST, luxury car tax and wine equalisation tax potentially making directors personally liable for these debts also.

  • Corporate Tax Cuts – The Government is committed to its Ten Year Enterprise Tax Plan of company tax cuts announced in the 2016-17 Federal Budget (which will see the corporate tax rate cut to 25% for all companies by 2026-27).

 

Individuals

  • Medicare Care Levy –

    • The Medicare levy low-income thresholds increased from the 2017-18 income year. 

    • The Medicare levy rate will remain at 2%.  The Medicare levy rate was previously budgeted to increase to 2.5% to pay for the NDIS.  However, the Government has been able to fund the NDIS through the budget without increasing the Medicare levy.

  • Seven year personal income tax plan –

    • Step one – Tax Offset: A low and middle income tax offset will apply from 1 July 2018 to 30 June 2022.  The offset will give taxpayers up to an extra $530 of their tax back if they earn less than $90,000.  The offset then reduces and is completely phased out at $125,333 taxable income.  This offset will exist in addition to the Low Income Tax Offset.

    • Step two – Tax Rates: Individual tax brackets are being changed to prevent more Australians from moving into higher tax brackets. See the table of the new tax rates below.

    • Step three – Simpler System: The personal tax system will be simplified by removing the 37% tax bracket entirely from 1 July 2024.  The highest marginal rate of 45% will apply to taxable income exceeding $200,000.  A summary table of the new tax rates is below:

Superannuation

  • Protecting Your Super – From 1 July 2019, the Government will ban exit fees on all superannuation accounts.  This gives superannuation members greater flexibility to change funds.

  • Protecting Your Super – From 1 July 2019, the Government will introduce a 3% annual cap on passive fees charged by superannuation funds on accounts with balances below $6,000. 

  • Protecting Your Super – From 1 July 2019, all inactive superannuation accounts with a balance less than $6,00 will be transferred to the ATO.  The ATO will use data matching to reunite these funds with the member’s active accounts, where possible.

  • Insurance – From 1 July 2019, insurance will be offered on an “opt-in” basis to superannuation members with balances of less than $6,000, members under 25 years of age or members who have not made a contribution for 13 months and are inactive.

  • Work test exemption – From 1 July 2019, the Government will introduce an exemption from the work test for voluntary contributions to super for people aged between 65-74 with superannuation balances below $300,000 in the first year that they do not meet the work test. 

  • SMSF – The maximum number of members for self-managed superannuation funds will increase from 4 to 6 from 1 July 2019.  This will give SMSFs greater flexibility and allow for better succession planning for larger families.

  • SMSF – A 3 yearly audit cycle will be introduced for SMSFs from 1 July 2019 for funds that have a history of 3 consecutive years of clear audit reports and have lodged the fund’s annual returns in a timely manner.

 

Research and development

  • The R&D tax incentive is to be amended to improve its integrity.  The proposed changes will apply from 1 July 2018.  The R&D tax offset will be 13.5% above the claimant company’s tax rate.  Further, there will be a cap of $4 million per annum for the cash refunds from the R&D tax offset.  

We will keep you up-to-date with the progress of the implementation of these proposed measures.

If you would like to discuss the tax implications of the budget proposals, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Renting out your house (or part of it) on Airbnb?

With the Commonwealth Games coming up for the Gold Coast, some locals have chosen to rent out part or all of their house to visitors using Airbnb and other online platforms.  If you are renting out your house (or part of it) even for a short period of time, there are tax and other consequences you need to consider.

 

Tax consequences

If you are renting out your home (or a part of it), any income earned will need to be declared as assessable income in your tax return.  You may also be eligible to claim a proportion of the expenses for the property.

You will need to keep all of your receipts and records showing:

  • Total income earned for the property; and

  • Total expenses for the property (eg. rates, interest, insurance, cleaning, internet, repairs, fees charged by Airbnb or other rental platform).

If you only rented out a part of your house (eg. one room) you can only claim the expenses relating that proportion of the house plus a share of common areas (eg. bathrooms).  These costs are generally apportioned on the basis of floor area – so you will need a floor plan for your property showing the total area and the area of the relevant rooms.

If you are earning income from your property, there may also be capital gains tax implications for your property when you sell it.  You should seek advice regarding the capital gains tax implications before renting out your property.

 

Other consequences

You should check your insurance policy and make sure that the policy covers you if a tenant is injured on your property or your property is damaged or stolen by a tenant.

You should also review your local council regulations to ensure that short term letting is permissible in your local area.  You may also be required to notify your local council that you are renting out your property.

If you are already renting your property, you need to check your lease to see whether a sub-lease is permissible.

If you would like to discuss the tax implications of renting out your property, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

SMSF and cryptocurrencies

The ATO have recently released guidance for self-managed superannuation funds (SMSFs) investing in cryptocurrencies.  To invest in crytocurrencies, the investment must be allowed under the SMSF trust deed and be in accordance with the investment strategy.

When an SMSF acquires and disposes of cryptocurrency, it faces the same taxation and regulatory issues that apply to all other investments.  Please see our earlier article regarding the tax implications of investing in cryptocurrencies.

Below we have highlighted some of the key issues for SMSFs when investing in cryptocurrencies:

 

Investment ownership

Trustees need to ensure that the SMSF has clear ownership of the cryptocurrency (ie.  there must be evidence of a separate cryptocurrency wallet for the SMSF).  The SMSF wallet must be managed separately from the personal and business cryptocurrency investments of the trustees and members.

 

Valuation

The cryptocurrency will need to be reported at market value at 30 June.  The ATO have advised that they will accept the 30 June closing value published on the website of a cryptocurrency exchange that reports on historical cryptocurrency values.

 

Related party transactions

Subject to certain exceptions, an SMSF is prohibited from acquiring assets from related parties (eg. from members).  Cryptocurrencies do not fall within any of the exceptions.  As such, an SMSF cannot acquire cryptocurrencies from trustees or members.

We recommend that you seek independent financial advice when determining whether investing in cryptocurrency is appropriate for your SMSF.

Please do not hesitate to call us on (07) 56656469 if you would like to discuss the tax and regulatory implications of investing in cryptocurrency in your SMSF.

 

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Single Touch Payroll

From 1 July 2018, employers with more than 20 employees will need to start reporting to the ATO using Single Touch Payroll.  Employers will need to report, salary, wages, PAYG withholding and superannuation to the ATO at the time you pay your employees.

On 1 April 2018 employers need to take a headcount of your employees.  You do not need to advise the ATO of the number of employees as at 1 April 2018, this is just a method of determining whether your business will be required to report under Single Touch Payroll Reporting.  If you have more than 20 employees as at 1 April 2018, you will be required to use Single Touch Payroll Reporting from 1 July 2018.  Once you start reporting using Single Touch Payroll Reporting, you will continue to report even if your employee numbers drop below 20.  Most software systems should be capable of enabling you to report the pay information to the ATO using Single Touch Payroll.

 

What you need to do

  • If you have more than 20 employees as at 1 April 2018, check the ability of your software to report your pay information to the ATO every pay period.  Review your available options if your current software does not support Single Touch Payroll Reporting.

 

Available resources

The ATO have released resources for employers and are currently running free webinars to assist employers with their compliance:

Please do not hesitate to contact us on (07) 56656469 if you would like assistance with understanding your obligations under Single Touch Payroll Reporting.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Buying and selling bitcoin?

With the price of 1 bitcoin reaching US$10,000 this week, it is certainly a hot topic in investment circles.

We have been asked by a number of people about the tax implications of investing in cryptocurrencies, like bitcoin.

There are many different ways in which you can acquire and utilise bitcoin which will give rise to differing tax implications.

 

Bitcoin received in exchange for goods and services

If your business receives bitcoin as payment for your goods or services, the receipt of the bitcoin is ordinary income for your business (and taxed as ordinary income).

 

Bitcoin used to purchase personal use assets

If you purchased A$10,000 worth of bitcoin, and you use this bitcoin to purchase personal use assets, any gain or loss on the bitcoin is disregarded for income tax purposes.

 

Bitcoin used for personal investment

Some people are investing in bitcoin for the purpose of deriving a gain when bitcoin increases in value.  In this situation, any resulting realised gain may be taxed as ordinary income or as a capital gain, depending on the circumstances.  This means, the gain is only taxable when the bitcoin is either sold or exchanged for another currency.

Tax Determination 2014/26 (“TD 2014/26”) confirms that a bitcoin is a CGT asset.  It also considers whether the purchase and sale of bitcoin would be treated as ordinary income or as a capital gain for tax purposes.

 

Tax on ordinary income vs Tax on capital gain

If the gain on disposing of your bitcoin is taxed as ordinary income, it will be added to your other income (salary, interest, dividends etc) and taxed at your marginal tax rates.  The gain will not be eligible for the 50% CGT discount and cannot be offset against any capital losses.  However, if you make a loss on the bitcoin, it can be offset against your other income (salary, interest, dividends etc).

Conversely, if the gain is taxed as a capital gain, it may be eligible for a 50% discount if the bitcoin has been held for more than 12 months.  It may be reduced by any current year or carried forward capital losses.  However, if it is regarded as a capital transaction, any losses will can only be offset against current or future capital gains.

Whether the transaction is ordinary income or a capital gain will depend on the facts and circumstances of each case. 

 

Your bitcoin profit – ordinary income (trader) or capital gain (investor)?

Paragraph 24 of TD 2014/26 suggests the following facts may indicate the transaction is capital in nature:

 A small amount of bitcoin was acquired as a hobby;

  • After two years the taxpayer decides to sell the bitcoin for a small profit.

The relevant factors from the example appear to be the amount invested, the time invested and the return on the investment.

Paragraph 22 of the determination sets out that the Commissioner considers that a gain on the sale of bitcoin will be ordinary income where the taxpayer entered into the transaction for the purpose of making a gain and the transaction entered into was a commercial transaction. 

Overall, the following factors will be considered when determining whether the transaction will be taxed as ordinary income or as a capital gain:

  • The amount of money invested;

  • The length of time the money was invested;

  • The original purpose of the investment;

  • The amount of profit derived on the sale;

  • Whether the bitcoin had any other use.

 

Exchanging bitcoin for another cryptocurrency

If you trade your bitcoin for another cryptocurrency, you are disposing of your bitcoin (which will be subject to Australian tax) and acquiring the new currency.

 

Summary

As you can see, the tax treatment of bitcoin transactions vary depending on the purpose and nature of each transaction.  It is important that you seek professional advice in relation to the tax implications before entering into any transactions. 

 

If you would like to discuss the tax implications of bitcoin, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Employers – how are you paying your super guarantee contributions?

Presently, employers with 19 or fewer employees or an annual turnover of less than $10 million can use the free Small Business Superannuation Clearing House (SBSCH) to pay their employees’ superannuation guarantee contributions. Employers can make one single payment to the SBSCH. The SBSCH will then distribute this payment to the relevant superannuation funds.

From early 2018, access to the SBSCH will be transferred to the ATO’s Business Portal. From this point, the SBSCH will no longer be accessible through its current website using your user ID and password.

If you do not have access to the Business Portal (and do not wish to setup access), we can still access the SBSCH on your behalf through our Tax Agent Portal.

It is important that you are aware of your options once the current method of accessing the SBSCH ceases in 2018.

The ATO are running a free webinar on Wednesday 29 November to give you more information about how to access the Business Portal and what services are available through the Business Portal. Click here to register for the webinar.

If you would like to discuss how these changes will impact on your business, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,