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Budget 2018: creating a level-playing field

The Government will continue its commitment to strengthen the economy by focusing on improving its integrity measures to create a fairer level-playing field for all.

Funding new ATO enforcement
Additional funds will be allocated from the Budget over four years to fund a new ATO enforcement strategy to tackle the black economy. Through this measure, the ATO will implement new mobile strike teams, stricter auditing and a Black Economy Hotline for Australians to report black economy and illegal phoenix activities.

Cash payment limit
The Government will commence with a restriction on cash payments made to businesses for goods or services of up to $10,000 from 1 July 2019. Payments over $10,000 must be made via an online banking system or cheque unless payments are with financial institutions or consumer to consumer non-business transactions.

No tax-deductibility for non-compliant payments
From 1 July 2019, the Government is keeping a closer eye on those businesses that try to claim deductions for any payments made to their employees that do not comply with current regulations. Deductions for payments from a business to a contractor will also be disallowed if the contractor does not have an ABN and the business does not withhold any PAYG monies, despite the withholding requirements applying.

Reforms to combat illegal phoenixing
Corporations and tax laws will be strengthened with further measures to prevent illegal phoenix activities. Those measures will include changes to:
– introduce new phoenix offences for individuals who run or open the door to illegal phoenixing;
– stop directors incorrectly backdating resignations to avoid liability or prosecution;
– control the power of related creditors to vote on the appointment, removal or replacement of an external administrator;
– expand the Director Penalty Regime to GST, luxury car tax and wine equalisation tax (to make directors personally liable for company’s debts); and
– allow the Tax Office to restrict refunds for outstanding tax lodgements.

Personal income tax
The ATO will receive further funding from 1 July 2018 in a bid to strengthen compliance activities on individual taxpayers and their tax agents. This funding is set to provide new compliance activities, a stronger audit presence and prosecutions, improve education and guidance materials, pre-filling of income tax returns and enhance real time messaging to tax agents and individual taxpayers. This measure is set to prevent over-claiming of any entitlements, including tax deductions by higher risk taxpayers and their agents.

Black economy package
The Taxable Payments Reporting System (TPRS) will expand to include security providers and investigation services; road freight transport; and computer system design and related services. Businesses required to report payments to contractors to the Tax Office must keep information from 1 July 2019, with the first annual report due by August 2020.

Tax and superannuation debts
The Budget implements a further range of strategies to improve debt collections revenue and time taken for debts to be collected. This measure is set to deter individual taxpayers from gaining an unfair advantage over individuals paying their fair share of tax and super.

Posted on 9 May '18 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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