The 2018-2019 tax year is well under way. Small business owners know that cash flow is often a major worry and stress. Living on tight margins, every penny counts. So make sure you aren’t paying more tax than you need to!
Having a tax debt can be stressful. But there are proactive things you can do to ensure that you handle your tax debt in a way that will keep you out of hot water with the Australian Taxation Office (ATO).
If you own a business that employs people then you need to know about payroll tax. This is a self-assessed State and Territory based tax imposed on businesses in Australia. The tax is payable when the total wages paid or owed to employees exceeds a threshold.
The ATO are leading the charge with embracing new technology and reaching consumers with the recent release of their official podcast channel. A clever play on words, it is aptly named Tax InVoice. The ATO is being proactive and finding a more modern medium to educate and engage with Australian tax payers.
With tax time just around the corner it is a good timing to review your GST status. There are some common GST slip ups that you need to be aware of.
1. Make sure you are actually in business!
A draft law developed by the ATO is set to make changes to an existing ruling that will now cover innovation for companies. This new law will allow companies to recoup tax losses for carrying on a business against income derived from a similar business following a change in ownership or control, even if the business is significantly different because of innovative changes.
While there were previous laws that allowed this, they didn’t include innovation, so this is a real win for this sector!
As you’re probably aware, certain investments into a qualifying Early Stage Innovation Company (ESIC) from 1 July 2016 may entitle a taxpayer to tax incentives including a non-refundable tax offset equal to 20% of the investment (up to a $200,000 limit each income year for “sophisticated investors”) as well as capital gain tax exemption on shares held between 1 and 10 years.
You have an asset that has increased in value and you are feeling pretty proud of your great investment result. But before you start celebrating your windfall it is best to understand the tax implications. That’s right, the tax man doesn’t just want to tax your income, but also profits from the sale of an asset. Keeping that in mind, if you understand what your obligations are you can ensure that you maximise on your profits and reduce your tax liability as much as possible.
The Australian Taxation Office (ATO) is owed more than $35 billion dollars, making it Australia’s largest creditor for most businesses and individuals. What is most concerning is that this is rising at a rate of just under 10% each year.
Research and development ("R&D") can provide valuable information and guidance for growing a business. Defining a businesses target market, identifying the customers needs and then developing new products and services that fit these customer needs. Research and development is of particular importance to innovation within a business, and plays a critical role in the innovation process. It provides an understanding of technology investment requirements now and in the future to produce new products, processes and services.