Ah, yes - the good old days when wheelin' and dealin' were rife.
Not any more! New legislation is on it's way....
Currency (Restrictions on the Use of Cash) Bill 2019
The community has been given opportunity to engage in conjecture and comment in regard to a very important piece of legislation. The bill addresses cash handling and payment rules, specifically whether high value payments are able to be made in cash. The new bill proposes a number of penalties for accepting payment in excess of $10,000 in cash. While the call for consultation ended on the 12th of August you are still able to ask questions via the provided email address.
Rationale: The introduction of an economy-wide cash payment limit is a recommendation from the Black Economy Taskforce and sends a strong signal to the community that it is not acceptable to avoid tax and other obligations by paying with cash.
Start date: 1 January 2020 and for certain AUSTRAC reporting entities from 1 January 2021.
What transactions are covered by the cash payment limit?
The limit applies to all cash transactions equal to or in excess of $10,000, except for those that meet the conditions specified in the draft Currency (Restrictions on the Use of CashExcepted Transactions) Instrument 2019.
What are examples of exempt transactions?
All cash deposits and withdrawals from your bank account with an authorised deposit-taking institution (ADI), exchanging foreign currency and all consumer to consumer transactions such as selling a second-hand car but excluding real property transactions.
Are there any new reporting requirements?
This will not impose additional reporting requirements on businesses and consumers.
What happens if you break the limit?
From 1 January 2020 it will be a criminal offence to make or accept a payment from businesses that includes $10,000 or more of cash. It is also offence to make or accept a cash donation equal to or in excess of $10,000. The maximum penalty is up to two years imprisonment and/or 120 penalty units ($25,200).
How does the cash payment limit apply to payment plans?
The cash payment limit will apply to the total price of a single supply of goods or services, regardless of whether the price is split into a series of payments over time.
The total cash payments made towards the final price paid must not equal to or exceed $10,000. The remainder of the payments must be made electronically or by cheque.
Email your questions to Blackeconomy@treasury.gov.au
|Posted in: News|
Current law states that all taxi drivers and chauffers including ride-sharing must be registered for GST from the first dollar of income (division 144 of the GST Act). This is to avoid confusion about pricing, and results in all customers paying the same rates.
Uber challenged the ATO over the application of GST on the basis that "ride-sourcing drivers do not supply taxi travel". The ATO view is that providing driving or ride-sharing services is the same as providing taxi travel services, because a car is made available for public transport use and as such the current law stands for Ride-Sharing drivers.
The ATO has previously admitted to "some uncertainty about how tax applies to various sharing economy models" and won't be pursuing any Uber drivers regarding records and GST registration prior to August 2015. However, from August 2015 onwards, the ATO expects that all Uber drivers will be registered for GST, providing invoices and declaring Uber-related income.
Drivers offering services via Uber are doing so with Uber acting as an agent by providing the booking and payment gateway, therefore there are certain obligations the driver needs to meet.
- Registration for an ABN and GST is the obligation of the individual driver.
- Drivers must complete and lodge a quarterly BAS regardless of the amount of turnover. Because registration is mandatory drivers may not elect to report annually.
- Drivers must issue tax invoices, when requested within 28 days, if the transaction is over $82.50. If the transaction is less than $82.50, the proof of payment receipt from the customer's credit card or the email receipt is sufficient for a customer to claim a GST credit.
- Income derived from Uber is declarable on the individual tax return at the end of the financial year.
Paying GST Using ATO Payment Card
Drivers, taxi drivers, chauffers, limousine drivers and rideshare drivers have the option to use an ATO activity statement payment card (this is only available to people in the taxi services industry).
The card can be used to make small frequent payments; however, the driver must record the payments to work out the final balance due when the BAS is due. The BAS must still be lodged by the due date, and any outstanding amount paid.
|Posted in: Top Tip|
If you have not already implemented single touch payroll, we can help you.
For example, in Xero, it's as simple as calling the ATO with your software ID and ticking a box to say it is done!
So if your bookkeeper is charging to do it, maybe you need a new bookkeeper?
|Posted in: Top Tip|
There are caps on the amount you can contribute to your super each financial year to be taxed at lower rates. If you contribute over these caps, you may have to pay extra tax.
The cap amount and how much extra tax you have to pay may depend on your age, which financial year your contributions relate to, and whether the contributions are:
- concessional (before tax)
- non-concessional (after tax)
To find out how much you contributed into your super fund to ensure you don't go over the caps, contact your super fund.
|Posted in: Top Tip|
Exception reporting. What is it? How can it be used to maintain your business' health?
Imagine you are a wholesaler selling a range of cosmetics nationally.
You have a Sales Manager in each state and a team of sales people reporting to them.
Using intelligence reporting, it is possible to extract reports that are below a selected gross profit level,
for each representative for the Sales Managers AND then to consolidate them into a national report,
grouping the transactions by Sales Manager for senior management transparency.
Often, just having known transparency is enough to persuade employees to follow company policy but,
for added measure, add the policy to remuneration packages. For example add a sum of money to
bonuses/commissions for achievement of minimum margins.
Datasift - We help you make cents of your data
|Posted in: Top Tip|