Ark Accounting in Sydney, Australia | Financial service

Ark Accounting

Locality: Sydney, Australia

Phone: +61 2 9262 3333

Address: Level 9, 123 Pitt Street 2000 Sydney, NSW, Australia

Website: http://www.arkaccounting.com.au/

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23.01.2022 The Financial Services Council (FSC) has criticised the premise the Labor Party has used from a government expenditure perspective to justify its proposed policy of banning imputation credit refunds for certain retirees in its submission to the House of Representatives Standing Committee on Economics inquiry on the matter. Some participants in this debate argue that refunds are a subsidy or make the tax system non-neutral. The FSC does not agree with this view, FSC economic...s and tax senior policy manager Michael Potter told the committee. Franking credit refunds to super funds and individuals are not specifically listed as a tax expenditure in Treasury’s annual tax expenditure statement. This suggests franking credit refunds are not a subsidy, tax concession or loophole. Potter also argued the refunding of imputation credits ensured parity and fairness for all Australian taxpayers. Refunds ensure everyone pays the same total tax at their own tax rate even when they’re at a zero tax rate. Here by total tax rate we mean the sum of personal and company tax, he said. Changes to refunds would mean that some investors, specifically those with lower tax rates, would pay a higher total tax on some investments, specifically shares, which creates an uneven or non-neutral playing field. The FSC also put forward that members of large super funds would also feel the effects of this proposed policy, not just those belonging to SMSFs. Others participating in this debate to discuss this issue said the members of large super funds are largely or completely unaffected by any change to franking credit refunds, Potter said. However, the official figures and our own survey results show this view is not correct. In fact, there could potentially be millions of Australians benefiting from franking credit refunds through membership of large super funds. According to Potter, the FSC survey of 14 large super funds receiving franking credit refunds involving 331,000 member accounts gave a better indication of which superannuants were benefiting from the current policy. Many of the surveyed funds had low average balances, indicating that refunds were likely benefiting numerous people who are not wealthy, he said. Editor:Darin Tyson-Chan

22.01.2022 Scammers impersonate ATO phone numbers The ATO is warning that scammers have adopted ‘Robocall’ technology to target taxpayers across the country. ... Assistant Commissioner Gavin Siebert said: Scammers are sending pre-recorded messages in record numbers and are manipulating caller identification so that your phone displays a legitimate ATO phone number despite coming from an overseas scammer. If the scammers do make contact, they will request payment of a tax debt usually through unusual methods like bitcoin, gift cards and vouchers. Legitimate ways to pay your tax debt are listed on our website. The scammers will threaten you with immediate arrest, attempt to keep you on the line until payment is made and may become rude or aggressive. The technique of displaying misleading phone numbers is known as spoofing and is commonly used by scammers in an attempt to make their interactions with taxpayers appear legitimate.

19.01.2022 Crowdfunding donations to help drought-affected farmers The ATO is currently offering various support measures to individuals and businesses from drought-affected communities to help with managing their tax and super obligations or who are struggling with their mental health. It has also recently provided a summary of the potential tax impact of making donations to, or raising funds via a crowdfunding platform for drought relief (as outlined below). ... For taxpayers wishing to make a contribution to a drought relief fund, it is important to be aware of the tax implications associated with making such donations. For example, donations of $2 or more to an organisation that is a deductible gift recipient will be tax deductible. To check to see if a particular appeal is a registered charity, the ATO has advised that taxpayers should use the ‘ABN lookup’ function on the Australian Business Register website before donating. For those looking to raise funds through crowdfunding platforms to assist their farming business, payments received from the crowdfunding platforms may be assessable income, depending upon how the funds are used. For example: - Where the funds are used for emergency relief (i.e., such as food and clothing), then the amounts are not assessable. - Where the funds are spent on deductible expenses (i.e., such as purchasing feed for livestock), the amount is assessable income, but will be offset by the relevant deductions obtained, ensuing there is no net taxable outcome. Editor: NTAA

16.01.2022 SG Amnesty still pending: The proposed superannuation guarantee (‘SG’) amnesty is a one-off, 12-month opportunity to self-correct past non-compliance (i.e., from 24 May 2018 to 23 May 2019). It will apply to previously undeclared SG shortfalls for any period from 1 July 1992 up to 31 March 2018. ... The ‘carrot’ currently on the table is that employers who voluntarily disclose previously undeclared SG shortfalls during the amnesty (i.e., importantly, before the commencement of an ATO audit) will: - not be liable for the administration component and penalties that may otherwise apply to late SG payments, and - be able to claim a deduction for catch-up payments made during the relevant 12-month period. This means that employers will still be required to pay all employee entitlements, including any unpaid SG amounts owed to employees and the nominal interest, as well as any associated general interest charge. Employers who are not up-to-date with their SG payment obligations and who do not come forward during the proposed SG amnesty have been put on notice by the ATO that they may face higher penalties in the future. While the SG amnesty is being actively promoted by the ATO, it is important to be aware that the proposed concessions currently on the table are not guaranteed until the relevant legislation becomes law. Editor: NTAA

15.01.2022 Foreign income If you’ve derived income from overseas, you will need to declare it.

15.01.2022 Increased scrutiny of home office claims Last year, 6.7 million taxpayers claimed a record $7.9 billion in deductions for ‘other work-related expenses’, which includes home office expenses. Reportedly, due to a high number of mistakes, errors and questionable claims for home office expenses, the ATO has recently advised that it will be increasing attention, scrutiny and education on these claims this tax time. ... In particular, the ATO has flagged their concerns relating to taxpayers who are claiming: - expenses they never paid for; - expenses that their employer has reimbursed them for; - private expenses; and - expenses with no supporting records. Whilst additional costs incurred as a direct result of working from home can be claimed, care must be taken not to claim private expenses as well. The ATO has indicated that one of the biggest issues they face is people claiming the entire amount of expenses (e.g., their internet or mobile phone), rather than just the extra portion relating to work. Provided the taxpayer is able to demonstrate that they have incurred additional costs of running expenses (e.g., electricity for heating, cooling and lighting), then these are generally deductible. In contrast, employees are generally not able to claim any portion of occupancy-related expenses (e.g., rent, mortgage repayments, property insurance, land taxes and rates). Taxpayers are warned that the ATO may contact their employers to verify expenses claimed for working from home. In addition, the ATO expects to disallow a lot of claims where the taxpayer has not kept adequate records to prove that they have legitimately incurred the relevant expense and that the expense was related to their work. As with the claiming of deductions in general, supporting records must be kept when claiming work-from-home expenses, which may include receipts, diary entries and itemised phone bills. Importantly, only the additional work-related portion of the relevant expense is deductible. Advancement in technology has allowed the ATO to deploy sophisticated systems and analytics to spot claims that do not ‘add up’ and claims that are out of the ordinary compared to others in similar occupations, earning similar income. Finally, the ATO has reminded taxpayers of the ‘three golden rules’ to follow when claiming work-from-home deductions, being: - the taxpayer must have spent the money themselves and have not been reimbursed; - it must be directly related to earning the taxpayer’s income, not a personal expense; and - the taxpayer must have a record to prove the expense.

15.01.2022 SMSFs and one-stop property shops ASIC has completed their review into the quality of advice in setting up and running a self-managed superannuation fund (SMSF). A key concern of ASIC’s reportExternal Link was in relation to the establishment of SMSFs for property investments using 'one-stop shop' models. One-stop shop models tend to promote the purchase of geared residential property through an SMSF, arranged by groups of related real estate agents, developers, mortgage brok...ers, accountants and financial advisers. The one-stop shop model creates inherent conflicts of interest that may affect the advice given to a client to set up an SMSF. For example, some of these businesses take advantage of customers with limited or no knowledge of SMSFs or super and have the potential to cause major financial detriment to an individual’s financial savings, including: - being given inappropriate or misleading advice to set up an SMSF which may result in members being financially worse off - the advice provider may not adequately consider or explain the obligations of being an SMSF trustee - members may be encouraged into a property purchase at an inflated value, or unaware of undisclosed high commissions. ATO strongly encourage individuals to seek independent professional advice from a licensed adviser before establishing an SMSF and before undertaking any new investment in an SMSF. Where a mistake occurs, SMSF trustees are also encouraged to consider making a voluntary disclosure using the SMSF early engagement and voluntary disclosure service. In these instances ATO will work with trustees to help get their SMSF or super back on track where possible.

14.01.2022 Christmas party 2018 #BSI

11.01.2022 Government announces coronavirus stimulus package The government has announced a range of measures to support the economy, business and employment in the face of the coronavirus health crisis. The measures include the below. Cash Flow Boost for employers employers with an aggregated annual turnover of under $50 million (based on prior year turnover) will receive a payment of $2000 to $25,000 from the government to help with cash flow. Eligible businesses will receive a paym...Continue reading

10.01.2022 Sydney tax agent banned over cash flow boost rort The Tax Practitioners Board has now terminated the company registration of TLL Tax Pty Ltd and imposed a two-year banning period. An investigation by the regulator found that TLL Tax had lodged a business activity statement on behalf of a client without their knowledge or consent.... The BAS contained false turnover amounts that could not be substantiated, leading the client to become falsely eligible for the cash flow boost payment, which TLL Tax dishonestly applied for. Over $20,000 of the cash flow boost and unjustified GST refunds were subsequently paid into a bank account held by TLL Tax’s sole director, Liying Tong. This payment was retained by the agent and transferred to another account and was not passed on to the client. The TPB also found that TLL Tax had lodged multiple income tax returns and BAS on behalf of a separate client who was no longer trading, without the client’s knowledge or authorisation. The tax refunds were then paid to Ms Tong’s bank account. Despite being confronted by the client, Ms Tong subsequently lodged unauthorised amendments to the client’s tax returns and BAS. She then made an unsolicited offer to purchase the client’s business, which the client declined, and then followed up by offering to apply for COVID-19-related stimulus funds in return for a commission, despite knowing the client was ineligible to receive the stimulus benefits as it had not been trading for a number of years. The TPB also found that Ms Tong has attempted to dissuade the client from reporting the misconduct to the ATO by suggesting she had claimed deductions for them without supporting documentation and that dobbing her in would result in an audit of the client’s affairs. Ms Tong was also found to have provided her myGovID credentials to her staff, providing them with an opportunity to make changes to taxpayers’ accounts and lodge returns without any authorisation, supervision and control. TPB chair Ian Klug said the misconduct of TLL Tax and Ms Tong was of grave concern to the regulator. To fraudulently claim COVID-19 stimulus payments affects the entire Australian community and takes advantage of the pandemic situation we are all living under, Mr Klug said. Ms Liying Tong was in a position of trust, operating in an uncertain environment, and she abused that trust. The termination comes after both the ATO and the TPB warned that it would take firm and swift action against taxpayers and tax agents who attempt to defraud the government’s COVID-19 stimulus measures. Editor: Jotham Lian

10.01.2022 Division 7A benchmark interest rate for 2019 The benchmark interest rate for 2019, for the purposes of the deemed dividend provisions of... Division 7A and the associated complying Division 7A loan agreements, has been set at 5.20% (i.e., down from 5.30% for 2018). See more

08.01.2022 Regulations confirm no SG obligation on JobKeeper payments where work is not performed The federal government has registered the Superannuation Guarantee (Administration) Amendment (Jobkeeper) Payment Regulations 2020. These regulations ensure that amounts of salary or wages that do not relate to the performance of work and are only paid to an employee to satisfy the wage condition for getting the JobKeeper payment are prescribed by the Regulations as excluded salary or wages.... The effect is that these amounts are excluded from the calculations of an employer’s superannuation guarantee shortfall and the minimum compulsory superannuation contribution an employer is required to make in respect of an employee to avoid a superannuation guarantee charge liability. Likewise, the Regulations recognise that an employer is only entitled to a JobKeeper payment for its employees if the business has suffered a substantial decline in turnover. In these circumstances, it is appropriate to require employers to only make minimum superannuation contributions in respect of amounts that are required to be paid to an employee for the performance of work. Employers would not be required to make contributions in relation to additional amounts paid to satisfy the wage condition (for example, the amount by which $1,500 exceeds an employee’s normal pay). If you are concerned about the calculation of compulsory superannuation for any employees supported by JobKeeper, please contact our office.

08.01.2022 Is your super a Self-Managed-Superfund (SMSF)? Ensure your investment strategy comply with Reg. 4.09. Talk to your trusted adviser to avoid risk of being non-compliance.

07.01.2022 Boosting cash flow for employers: Small and medium-sized businesses and not-for-profit entities, with an aggregated annual turnover of less than $50 million (usually based on their prior year’s turnover) that employ people, may be eligible to receive a total payment of up to $100,000 (with a minimum total payment of $20,000), based on their PAYG withholding obligations, in the following two stages: (a) Stage 1 paymentCommencing from the lodgment of activity statements f...rom 28 April 2020,eligible employers that withhold PAYG tax on their employees’ salary and wages will receive a tax-free payment equal to 100% of the amount withheld, up to a maximum of $50,000. Eligible employers that pay salary and wages will receive a minimum (tax-free) payment of $10,000, even if they are not required to withhold PAYG tax. The tax-free payment will broadly be calculated and paid by the ATO as an automatic credit to an employer, upon the lodgment of activity statements from 28 April 2020, with any resulting refund being paid to the employer.This means that: quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020and June 2020; and monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. However, the payment for the March 2020 activity statement will be calculated as being three times the actual amount withheld. Note that, the minimum payment of $10,000 will be applied to an entity’s first activity statement lodgment (whether for the month of March or the March quarter) from 28 April 2020. (b) Stage 2 paymentFor employers that continue to be active, an additional (tax-free) payment will be available in respect of the June to October 2020 period, basically as follows: Quarterly lodgerswill be eligible to receive the additional payment for the quarters ending June 2020 and September 2020, with each payment beingequal to 50% of their total initial (or Stage 1) payment(up to a maximum of $50,000). Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 activity statement lodgements, with each additional payment being equal to a quarter of their total initial (or Stage 1) payment (up to a maximum of $50,000). The ATO will automatically calculate and pay the additional (tax-free) payment as a credit to an employer upon the lodgment of their activity statements from July 2020, with any resulting refund being paid to the employer. #arkaccounting #bsiacounting #stimuluspackage #M0497009800

07.01.2022 Commission lawyers want to ban cold-call insurance sales Banning cold-call sales on insurance products, scrapping sales commissions, and prohibiting add-on insurance at car yards these are just some of the regulatory changes proposed by the royal commission’s top lawyers to stamp out misconduct. A new document containing the policy-related issues arising from the insurance round of the royal commission has been published this week, opening the door to a shake-up of insuranc...e laws and regulations. The submission, prepared by counsel assisting the commission, raised the prospect of an outright ban on selling insurance through outbound call centres, Fairfax Media reported. Should the direct sale of insurance via outbound telephone calls be banned? If not, is the current regulatory regime governing the direct sale of insurance via outbound telephone calls adequate to avoid consumer detriment? the submission said. Outbound calls account for the majority of the sales of a number of life-insurance distributors, including the embattled ASX-listed Freedom Insurance, but ASIC has been highly critical of the aggressive sales tactics often used by the businesses to sell insurance via unsolicited phone calls, the report said. The submission also proposed a ban on the sale of add-on insurance by motor dealers, which the corporate regulator slammed as expensive and often useless. The commission lawyers also questioned the insurance companies’ treatment of claimants with mental-health conditions, after the inquiry heard that people making mental-health claims were more likely to be surveilled by their insurer. Should life insurers be prevented from engaging in surveillance of an insured who has a diagnosed mental-health condition or who is making a claim based on a mental-health condition? the submission said. Another key issue raised relates to the banning of conflicted remuneration from general and life insurance, as the commission continues to unveil problematic incentives offered to financial-sector workers. The submission additionally questioned whether there was any reason to exempt the insurance industry from unfair contract terms, and whether ASIC should regulate insurance-claims handling, which is currently only policed by the industry. The Insurance Council of Australia and the Financial Services Council, which represents life insurance companies, are yet to comment on the questions, Fairfax said. Editor: Mina Martin

05.01.2022 "Outrageous" deductions rejected The ATO has published some of the most unusual claims that they disallowed last financial year. Nearly 700,000 taxpayers claimed almost $2 billionof ‘other’ expenses, but the ATO's systematic reviewof claims had found, and disallowed, some very unusual expenses, including:... - claims for Lego sets bought as gifts for children, and porting equipment or membership fees for their child athletes; - claims for dental expenses ("believing a nice smile was essential to finding a job"); - some taxpayers tried to claim the purchase of a brand new car (in excess of $20,000 each!), with one "particularly charitable" taxpayer trying to claim for a car purchased as a gift for their mother; - one taxpayer made a claim for "the cost of raising twins", while another claimed for the "cost of raising three children" (and another taxpayer was obviously shocked at the cost of having children, simply stating "New born baby expensive" when making their claim); - other taxpayers claimed child support payments, private school fees, school uniforms, before school care and other school expenses, as well as health insurance costs and medical expenses; and - one taxpayer decided to claim the cost of their wedding reception. The ‘other’ deductions section of the tax return is for expenses incurred in earning income that don’t appear elsewhere on the return such as income protection and sickness insurance premiums. The ATO is reminding taxpayers that, in order to claim an ‘other’ deduction, the expenses must be directly related to earning income and they need to have a receipt or record of the expense.

03.01.2022 Please contact your accountant immediately if you receive any call claiming to be from ATO or on behalf of ATO. You may ask them to contact your accountant. You don’t need to give them your accountants contact details. If they are genuine then they would have full details of your tax agent. If you really have any tax debit or outstanding lodgement, you accountant can resolve it for you.

03.01.2022 The Coronavirus Economic Response Package Omnibus Bill 2020 has now been introduced into Parliament and covers the government’s initial $17.6 billion economic stimulus package and its latest $66.1 billion support package. The bill has now been passed by both houses after it sped through the parliamentary process with bipartisan support, and is currently awaiting royal assent. The Australian people can be reassured that tonight, their parliament reached across the political d...ivide and passed the most significant set of measures since wartime, said Treasurer Josh Frydenberg. The bill details various measures, including the beefed-up instant asset write-off, accelerating depreciation deductions, the tax-free cash payments to small and medium businesses, and access to the early release of superannuation. There are going to be a lot of phone calls being made particularly about this cash-flow boost. Accountants and bookkeepers will be under enormous pressure to get their clients’ BAS ready and lodged so the cash flows to eligible businesses from 28 April. However, Mr Croker also warned that accountants should tread carefully in helping their clients access the support measures, noting that the government would come down hard on those who were rorting the system. False or misleading statements made in haste now could come back to bite down the track. Fines and even imprisonment could apply in addition to having to repay the money, Mr Croker said. To guard against ‘pop-up’ employer schemes designed to rort the incentive, the second-round statement makes clear that the cash boost will only be available to ‘active’ eligible employers established prior to 12 March 2020, the date of the first COVID-19 stimulus announcement. Credit: Accountants Daily

03.01.2022 Have your say on ABN reform The Australian Business Number (ABN) is a key business identifier used by business, government and the community. However, the Black Economy Taskforce found that the ABN system is also used by black economy operators to provide a false sense of legitimacy to their business. The Australian Government is looking at the best way to strengthen and modernise the ABN system, and wants your feedback.... You can make comments and suggestions through a consultation process being run by Department of Treasury. The consultation paper will discuss possible changes to the ABN system including adjusting ABN entitlement rules, imposing conditions on ABN holders, and introducing a renewal process including a renewal fee. The closing date for making a submission is 31 August 2018. This is your opportunity to consider improvements to the ABN system, which will better support ABN data and the growing use of ABNs across a wide range of purposes. Next step: Provide feedback on https://treasury.gov.au/consultation/c2018-t311320/ consultation paper.

03.01.2022 https://www.arkaccounting.com.au/deductions-for-your-speci/

01.01.2022 Low and middle income earners: If you are a low-income earner and you are an Australian resident for income tax purposes, you may be eligible for both the: - low income tax offset... - low and middle income tax offset. You don't have to do anything to claim the offsets. We will work them out for you when you lodge your tax return. Tax offsets reduce the amount of your taxable income that you pay tax on. They are non-refundable offsets, so the following applies: - any unused offset amount can't be refunded - it can't reduce your Medicare levy. If you are under 18 as at 30 June of the income year and you have unearned income, these offsets cannot reduce the tax payable on this income. Low income tax offset If your taxable income is less than $66,667, you will get the low income tax offset. The maximum tax offset of $445 applies if your taxable income is $37,000 or less. This amount is reduced by 1.5 cents for each dollar over $37,000. Low and middle income tax offset If your taxable income is less than $126,000, you will get some of the low and middle income tax offset. The amount of the offset you are entitled to will depend on your individual circumstances, such as your income level and how much tax you have paid throughout the year. The maximum offset is $1080 per annum. The base amount is $255 per annum. It does not mean that you will get an extra $1,080 in your tax return. The new low and middle income tax offset is available for the 2018-19, 2019-20, 2020-21 and 2021-22 income years and is in addition to the low income tax offset. If your taxable income is: - less than $37,000, your offset entitlement will be $255. - more than $37,000 but less than $48,000, your offset entitlement will be $255, plus 7.5% of the excess. - more than $48,000 but less than $90,000, your offset entitlement will be $1,080. - more than $90,000 but less than $126,000, your offset entitlement will be $1,080, less an 3% of the excess.