INTHEBLACK June 2022 - Magazine - Page 8
AT A G L A N C E
GET SMART
// C PA A U S T R A L I A P O L I C Y
JUNE
UPDATE
Elinor Kasapidis,
CPA Australia’s senior
manager, tax policy
Over the past few years,
the Australian Taxation
Office has maintained
a sharp focus on workrelated expenses, rental
property deductions,
cryptocurrency and the
private use of business
assets.
Incorrect claims often
stem from poor recordkeeping, a lack of
awareness around
tax obligations and
a misunderstanding
of the rules.
Tax practitioners are
advised to start helping
clients set some new
financial year resolutions,
such as investing in
digital accounting
software, considering
e-invoicing and
improving their
record-keeping.
TAX TIME
2022
AS THE 2021-2022 TAX YEAR DRAWS TO A CLOSE, THE FOCUS IS ON
PREPARING AND LODGING 2022 TAX RETURNS. WE HIGHLIGHT THE
ATO’S FOCUS AREAS AND SHARE MEMBER INSIGHTS FOR TAX TIME.
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an INTHEBLACK
article on taxing
cryptocurrency
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CPA Australia’s
resources on
section 100A
8 ITB June 2022
T
he Australian Taxation Office (ATO) has been
very clear about its focus on work-related
expenses and rental property deductions for
some time, with cryptocurrency and the private
use of business assets also mentioned regularly.
Poor record-keeping and a misunderstanding of the
rules tend to be behind many incorrect claims, and tax
practitioners are advised to confirm that clients’
receipts, diaries and logbooks are in order, and that
their claims are reasonably arguable.
It is also important to encourage clients to keep
digital records and check that their claims have
sufficient connection to their work and that they haven’t
been reimbursed.
The ATO’s myDeductions app uploads information
straight into Online Services for Agents, making it easier
for practitioners, too.
Clients need to be asked directly about other forms
of income, such as cryptocurrency or income from
selling goods and services online and trading shares
through apps.
Often, clients are unaware that they have to report
and pay tax on their side hustle, and won’t necessarily
divulge information about other income streams or
about trading on foreign exchanges or swapping their
Bitcoin for Ethereum.
Adjusting claims for private use can be a challenge, as
employees often include non-work kilometres, landlords
deduct for periods of private use or small business
owners spend company money on personal expenses.
An important area of focus is educating clients about
how to get deductions right, the consequences of
making false claims and the ATO’s use of data analytics
to detect incorrect returns.
WHAT TO CONSIDER NOW
Although tax returns may not be due until 2023, it is
worthwhile reminding clients that over the next few
weeks they need to:
•
Document trust resolutions and dividend
declarations before 30 June 2022
•
Review and finalise Single Touch Payroll,
including closely held payees by 14 July
•
Correct any superannuation guarantee errors
by lodging and paying the Superannuation
Guarantee Charge Statement
•
Lodge Taxable Payments Annual Reports by
29 August
Now is also a good time to help clients set some new
financial year resolutions, such as investing in digital
accounting software, considering e-invoicing and
improving their record-keeping to make tax time easier
in the future.
Clients with professional firms or trusts should
consider the ATO’s guidance on the allocation of profits
within professional firms. Draft guidance on reimbursement
agreements (section 100A of the Income Tax Assessment
Act 1936) and financial accommodation (Division 7A of the
Income Tax Assessment Act 1936) may also be useful.
This guidance takes effect from 1 July 2022, and it is
important to make clients who may be affected aware
about the risks and options sooner rather than later.