TAXATION & ACCOUNTING

May 07, 2018

For more information on current issues ( and tax tips) visit my Facebook page. 

April 17, 2018

Ever hear conflicting information regarding allowable deductions for parking?  Let me explain deductible and non deductible parking costs:

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Deductible:

• Parking fees on a work trip (external to the work place)

• Parking fees paid while on a conference or at a seminar (external to the work place)

• Parking fees paid while on a specific job (ie Electrician doing electrical work at a job for a duration under 4 hours)

• Parking fees while travelling ie;

1. between two separate places of work where the second place is not your primary place of employment

2. to a place of education for work-related self-education purpose (if the self-education expenses are deductible)

3. in the course of performing your work duties

4. Airport parking if parking your vehicle while in the course of travelling, only if the travel is not going to a primary place of employment 

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Non Deductible:

No deduction is generally allowable to an employee for the cost of parking a car at or near the primary place of employment for that day if:

• the car is used by the employee to travel to and or from work on that day, even if the travel between home and work or return, was business travel

• you park at or close to your primary place of employment

• The car is parked at the place for a period (or periods) totalling more than 4 hours between 7am and 7pm  (note:  this does not mean you can claim a deduction if you parked your car for 3.5 hours - it is referring to duration for work to be completed on an external job)

• LAFA - Riggers or miners travelling to their place of employment

January 30, 2018

The following tips may help you reduce your tax liability in your tax return. Claiming all your eligible work-related deductions may save employees tax.

To do so, make sure that you have all the necessary receipts. Typical work-related expenses include employment-related phone and internet usage, computer repairs, uniforms, protective clothing, union fees and professional subscriptions.

Home Office

When part of your home has been set aside primarily or exclusively for work, a home office deduction may be allowed. Typical home office costs include heating, cooling, lighting and even depreciation of your office equipment. To claim the deduction, you must have kept a diary for a representative four-week period of the hours you worked at home providing that four-week period is consistent through the year.

Telephone/Internet

If you use your mobile or home internet for work purposes, the tax office requires you to keep a four-week diary as representation of both personal and business use in order to establish your business percentage for tax deduction claims.  If audited by the tax office, they will require proof of your business use either by actual calls made (highlighting calls from the telephone bill) or the four week diary, this should be completed annually.

Self Education

Self-education expenses can be claimed provided the study is directly related to either maintaining or improving skills or it is likely to increase your income from your current employment. Typical self-education expenses include course fees (excluding HECS/HELP), textbooks, stationery, student union fees, some travel and the depreciation of assets such as computers and printers.

Assets

Immediate deductions can be claimed for depreciating assets that cost under $300 to the extent the asset is used for an income-producing purpose. Such assets include tools, calculators, briefcases, computer equipment and books purchased by an employee. Equipment over $300 will need to be depreciated.

Motor Vehicle

If you use your motor vehicle for work-related travel, and your annual claim for kilometres travelled does not exceed 5,000 kilometres, you can claim a deduction for your vehicle expenses on a cents per kilometre basis.

If your business travel exceeds 5,000 kilometers, a log book should be kept to establish the business percentage use of the vehicle.

April 19, 2018

ALLOWABLE VEHICLE DEDUCTIONS

Work-related travel expenses
You can claim travel expenses you incur in the course of performing your work duties as an employee. These expenses may include:
• work-related car expenses
• expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers...
• actual expenses – such as any petrol, oil and repair costs if you travel in a car that is owned or leased by someone else
• public transport – including taxi fares - on a work trip
• bridge and road tolls on a work trip
• parking fees on a work trip
• short-term car hire for a work trip.
Generally, the cost of normal trips between home and work is a private expense for which you cannot claim a deduction. However, as an employee there are certain situations where you may be able to claim deductions for travel between your home and workplace.
Transporting bulky tools and equipment
You can claim the cost of using your car to travel between your home and work if all of the following apply:
• you have to carry bulky tools and equipment you need to use at work
• it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice
• there is no secure storage area at your workplace.

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Keep a log book - start with the opening odometer reading, log both business and private travel, at 30 June log your closing odometer reading and this will establish the business use you can claim.  Providing your travel is consistent for 5 years - you may claim this % for 5 years.

A log book should be kept for a minimum of 12 weeks.

April 16, 2018

WHAT DETERMINES EMPLOYEE OR CONTRACTOR??

If you hire a worker you must check if they are an employee or contractor.
It's important because:
• it aff...ects your tax, super and other obligations
• penalties and charges may apply if you get it wrong.
If you previously hired a worker without checking, review your decision now to make sure you got it right.
How to work it out: employee or contractor
To check if your worker is an employee or contractor, you need to review the whole working arrangement. The easiest way is to use the ATO decision tool.

Some workers are always employees
Any of the following types of workers are always treated as employees:
• apprentices
• trainees
• labourers
• trades assistants.

Apprentices and trainees do a combination of work and recognised training to get a qualification, certificate or diploma. They can be full-time, part-time or school-based and usually have a formal training agreement with the business they work for, which is registered through a state or territory training authority or completed under a relevant law.

In most cases they are paid under an award and receive specific pay and conditions. The work arrangement for apprentices and trainees is employment. You must meet the same tax and super obligations as you do for any other employees of your business.
Companies, trusts and partnerships are always contractors

An employee must be a person. If you've hired a company, trust or partnership to do the work, then it is a contracting relationship for tax and super purposes. The people who actually do the work may be directors, partners or employees of the contractor but they're not your employees.
Labour hire or on-hire arrangements

If you have obtained your worker through a labour hire (or on-hire) firm and pay that firm for the work undertaken in your business, then your business has a contract with the labour hire firm and they are responsible for the PAYG withholding, super and FBT obligations. Labour hire firms can be called different names including recruitment services and group training organisations (where your business is referred to as the 'host employer').

April 16, 2018

Hiring individuals
If you've hired an individual, it is the details within the working agreement or contract that determines if they are a contractor or employee for tax and super purposes. The agreement or contract your business has with the worker can be written or verbal.

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CONTRACTOR OR EMPLOYEE DECISION TOOL 

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AN EMPLOYEE IS:
Ability to subcontract/delegate: the worker can't subcontract/delegate the work – they can't pay someone el...se to do the work.
Basis of payment – the worker is paid either:
• for the time worked
• a price per item or activity
• a commission.

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Equipment, tools and other assets:

• your business provides all or most of the equipment, tools and other assets required to complete the work, or

• the worker provides all or most of the equipment, tools and other assets required to complete the work, but your business provides them with an allowance or reimburses them for the cost of the equipment, tools and other assets.

Commercial risks: the worker takes no commercial risks. Your business is legally responsible for the work done by the worker and liable for the cost of rectifying any defect in the work.

• Control over the work: your business has the right to direct the way in which the worker does their work.

• Independence: the worker is not operating independently of your business. They work within and are considered part of your business.

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A CONTRACTOR IS:
Ability to subcontract/delegate: the worker can subcontract/delegate the work – they can pay someone else to do the work.
Basis of payment: the worker is paid for a result achieved based on the quote they provided.
A quote can be calculated using hourly rates or price per item to work out the total cost of the work.
Equipment, tools and other assets:
• the worker provides all or most of the equipment, tools and other assets required to complete the work
• the worker does not receive an allowance or reimbursement for the cost of this equipment, tools and other assets.
Commercial risks: the worker takes commercial risks, with the worker being legally responsible for their work and liable for the cost of rectifying any defect in their work.
Control over the work: the worker has freedom in the way the work is done, subject to the specific terms in any contract or agreement.
Independence: the worker is operating their own business independently of your business. The worker performs services as specified in their contract or agreement and is free to accept or refuse additional work.

April 16, 2018

CONTRACTOR OR EMPLOYEE DECISION TOOL 

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AN EMPLOYEE IS:
Ability to subcontract/delegate: the worker can't subcontract/delegate the work – they can't pay someone el...se to do the work.
Basis of payment – the worker is paid either:
• for the time worked
• a price per item or activity
• a commission.

​

Equipment, tools and other assets:

• your business provides all or most of the equipment, tools and other assets required to complete the work, or

• the worker provides all or most of the equipment, tools and other assets required to complete the work, but your business provides them with an allowance or reimburses them for the cost of the equipment, tools and other assets.

Commercial risks: the worker takes no commercial risks. Your business is legally responsible for the work done by the worker and liable for the cost of rectifying any defect in the work.

• Control over the work: your business has the right to direct the way in which the worker does their work.

• Independence: the worker is not operating independently of your business. They work within and are considered part of your business.

• ​

A CONTRACTOR IS:
Ability to subcontract/delegate: the worker can subcontract/delegate the work – they can pay someone else to do the work.
Basis of payment: the worker is paid for a result achieved based on the quote they provided.
A quote can be calculated using hourly rates or price per item to work out the total cost of the work.
Equipment, tools and other assets:
• the worker provides all or most of the equipment, tools and other assets required to complete the work
• the worker does not receive an allowance or reimbursement for the cost of this equipment, tools and other assets.
Commercial risks: the worker takes commercial risks, with the worker being legally responsible for their work and liable for the cost of rectifying any defect in their work.
Control over the work: the worker has freedom in the way the work is done, subject to the specific terms in any contract or agreement.
Independence: the worker is operating their own business independently of your business. The worker performs services as specified in their contract or agreement and is free to accept or refuse additional work.