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Allowances are a set amount of financial funding provided by businesses without supporting invoices as part of their agreement with their employees. These allowances are used to pay for meals, laundry, uniforms, and tools.
Although allowances are taxable, payroll tax exemptions can be claimed for certain activities performed by contractors and employment agents, as stated by the Payroll Tax Act 2007. This ruling explains that while all allowances payable to employees are taxable for tax purposes, there are specific exempted provisions. Here are some exempt allowances that your business can be eligible for:
Allowance for accommodation expenses is used when employees have to stay away from home for business purposes. This means covering the costs of temporary accommodation for a continuous period of no more than 21 days or more than 21 days where employers continue to maintain a dwelling for the employees.
To calculate the exemption for a particular financial year, use the exempt accommodation allowance rates for allowances that include accommodation, meals, and incidental expenses. If you paid the hotel directly, use the exempt meals and incidental rates for allowances only for these corresponding expenses.
All or part of allowances paid to employees when using their private vehicles for business purposes may be exempt from payroll tax. This depends on the number of kilometres reached in a certain period.
To compute your motor vehicle allowance exemption, calculate the exemption by checking the correct rate per kilometre for a particular financial year. Other approved ways to calculate the exempt kilometres are using the continuous recording method and averaging method.
If the allowance you provide to employees is at a flat rate, an exempt component can be deducted. To use the continuous recording method, find the sum of the distances travelled for the business journeys. This requires recording the purpose of the trip, odometer readings for the start and end of the business journey, and the total number of business kilometres travelled during a specific financial year.
If it’s a hassle to separate private and business use of vehicles, calculate the business use over a continuous period of 12 weeks. Doing this will allow you to determine the business kilometres as a percentage of the total kilometres.
During this 12-week period, take note of the purpose of the business journeys, odometer readings at the start and end of the trips, the distance of all business journeys travelled during this particular period, and the total distance travelled during the averaging period.
A living away from home allowance (LAFHA) is a fringe benefit. This means its value for payroll tax purposes is the value determined in accordance with the Fringe Benefit Tax Assessment Act. In other words, if the Act states that the allowance does not qualify as a living away from home allowance benefit, it will be considered as an overnight accommodation allowance.
Allowances are often necessary to provide compensation for employees in certain unusual conditions or allow them to meet particular requirements connected with the services they offer. If you need further guidance on the types of allowances subject to the payroll tax or seek help to calculate the exemptions, consider hiring a business accountant.
Whether you need calculation assistance or help to apply for a payroll tax exemption, our skilled accountants in Gold Coast at New Wave Accounting can address your needs. We also offer bookkeeping services and innovative accounting solutions. Contact us to see how we can help!
As a registered business owner in Queensland, you have responsibilities to the government and the public—your taxes. Therefore, you need to lodge periodic payroll tax returns, annual returns every year, and a final return when there’s a change in your status.
It can be all confusing, especially if you’re new to this—and that’s perfectly understandable. Allow us to give you the necessary information about the types of returns and how you can lodge them.
A return period is monthly or every six months. If you choose to lodge monthly, you start in July through May and one annual return in July that includes June wages.
On the other hand, if you are approved to lodge your returns half-yearly, you are required to lodge one periodic return for the July to December period and one annual return in July that includes January to June wages.
If you wish to change your lodgment frequency to half-yearly returns, you need to have an estimated annual payroll tax liability of $30,000 or less. However, you shouldn’t stop lodging the same way you’re approved unless you receive a letter from the Queensland Government about the confirmed lodgment change.
Your annual payroll tax return is “the breakdown of your year’s taxable wages, and it is used to calculate your liability for the year.” With that, you need to lodge an annual return every 21 July of each year for the previous financial year.
At the end of each financial year, you need to lodge an annual return for taxable wages payable or paid during the year, compare the periodic return liabilities with the annual liability amount and pay any outstanding amounts by the due date.
Keep in mind that you can’t lodge the annual return until you have submitted all your period returns for the financial year. Also, you will need to lodge an annual return even if you have already paid taxable wages following the lodgment of a final return.
If you undergo a change of status during a financial year, you need to lodge a final return within 21 days of that change to finalise the payroll tax before your annual return. You can do this online.
There are various ways to pay payroll tax returns:
Lodgment and paying payroll tax returns may be a tedious task, but it’s something you need to do as a business owner. Therefore, if you can, get the right help. An accountant can help you through the process while you focus on other aspects of growing your business. Doing so will also help alleviate some stress on your shoulders.
Get the best accountant on the Gold Coast today. Let New Wave Accounting take care of your accounting needs so you can focus on handling other business matters. Call us today to get started!
Australia has had its fair share of these unfortunate events in recent years when it comes to natural disasters. From floods to drought, and last year, the bushfires, this has increased the count of insurance claims as people seek financial assistance.
Seeing as an insurance payout helps cover damages, many people think that these aren’t taxable; sadly, it’s not always true. To put it simply, insurance payouts for destroyed personal items are typically not taxed, but if you have a home that produces income, then that’s a different story.
Besides having a home as a source of income, the rules also change when you have assets that cost more than $10,000 or if the item is a collectible, priced at $500 or more. So when the proceeds appreciate in value, then you may end up paying taxes for it.
Like any tax-related issue, this can be quite overwhelming. That’s why it’s a good idea to work with an experienced accountant to see what your insurance covers and if you need to pay taxes for your damaged items.
When you’ve had damaged or destroyed trading stock in your business, know that the insurance payout for this is taxable. For instance, insurance claims submitted during the lockdown due to spoiled perishable stock include business tax returns. The reason these stocks are taxed is that it is a business expense.
If your property is damaged and insurance covers repairs, the payout you receive is taxed as income. When the premises are destroyed or damaged, the insurance company will decide whether it’s taxable gain or loss. On depreciating assets like machinery, if your payout exceeds the item’s value, then it’s included in the business’s assets.
Since rental properties are income-producing assets, typically, the costs of insurance policies related to this asset would be claimed as an expense. So if you receive a payout for this rental property due to a disaster, then you’ll have to include this amount in your tax return.
These insurance payouts may include loss of rental income, replacements and repairs of destroyed assets, or money you receive from a relief fund. But essentially, it really depends on what the payout is for, how the insurance is used, and if your property was vacant or currently rented out.
It’s recommended that you speak to a reliable accountant when dealing with insurance payout taxes to understand if you’re paying the right amount to the ATO.
The more that you earn, the more taxes you have to pay; that’s the normal rule in life. But truly, the goal here is not to pay more taxes to the ATO than you legally have to, especially when you’re seeking financial assistance through an insurance payout.
Working with a credible accountant and preparing all documents and financial reports when getting an insurance claim is crucial. This way, you’ll get to cover all damages and losses and be sure that you’re paying the right taxes, decreasing any hassle and unnecessary fees and costs.
When dealing with your business’s insurance, taxes, and finances, things can get pretty overwhelming. That’s why it’s best to work with an efficient team to handle your money woes.
New Wave Accounting handles one of the best accountants in the Gold Coast, so get in touch with us for all your bookkeeping and accounting needs. Check out our services and learn more about how we can help you today!
Filing for your income tax return can be a chore. It is such a chore that people forget or fail to lodge their income tax returns every year. For self-lodging individuals, it’s on the 31st of October. And for those with an accountant, it’s on the 15th of May. It’s pretty common for people to miss this schedule for many reasons, like being overseas, being too busy, or simply forgetting.
Whatever your reasons are for being delayed, it’s crucial that you settle any outstanding tax returns you might have as soon as possible. Not only you will get rid of this looming financial task that can be pretty annoying and anxiety-inducing, but you can also avoid incurring late or overdue penalties from the Australian Taxation Office (ATO).
However, if you have missed the time you were supposed to lodge your returns or have outstanding returns that you cannot or simply have not been able to take care of, here’s what you need to know:
The first thing you need to do is contact the ATO and find out the details of your lodgement status. Once you know where you stand, you might have to pay the penalty. This may depend on your history and standing with the ATO. The standard penalty for late or outstanding returns is $222 every 28 days. However, by the five-month mark, you will be charged a maximum penalty of $1,110.
If you continue to miss your lodgement, the ATO will either have to issue you with a default assessment warning letter or go right ahead with legal action. If you’re fortunate enough that legal action is not sought, the ATO can send assessment letters that will also include an estimate of your income for the missing year.
The downside to that is that agency won’t provide you with estimates that favour you. The ATO will not include most of the deductions you are entitled to simply because that responsibility lies with you. Letting the agency do your tax returns is likely to result in you paying a much higher figure than you should.
There are some situations where the ATO might waive your existing penalties. However, the requirements are unlikely to apply to many of the people with penalties. Exemptions for missing the lodgment deadline only applies to particular cases where the cause is one of the following:
Another way to get your penalties waived or reduced is with the help of accounting professionals. They can help you figure out if you have any entitlements and make an appeal. But if you are a repeat offender, there is very little chance your penalties will go away.
Lodging late or outstanding tax returns is a pain. However, if you can take care of it as early as you can, you may be able to do it yourself. The ATO will show no favour or sympathy if you develop a pattern, but as a first-time offender, you might be granted leniency. There’s no guarantee it will happen, but if you’re patient, organised, and file the correct documents, you should be out of the woods soon enough.
Tax returns can be confusing and frustrating whether you’re new to it or not. It requires a lot of work and effort on your part. If you’re too daunted or just plain tired of the process, let us help you. New Wave Accounting has some of the best accountants on the Gold Coast. We provide the best solutions to all of our clients. Contact us today to get your taxes sorted!
Paying taxes is important to all businesses, no matter the size or industry. Since there’s more than one kind of tax a company pays for, a detailed statement is in order. That’s what is commonly referred to as a Business Activity Statement (BAS). If a business is registered for Goods and Services Tax (GST), they need to submit one either quarterly or monthly.
The details you (or your accountant) should put in your BAS include, but are not limited to:
Gathering documents for this and staying organised can be tricky. Even with digital or postal submission options, the multiple layers that go into it could still lead to a submission deadline being missed. BAS fines and penalties will apply accordingly.
The BAS form comes from the ATO, with both lodging and payment due dates clearly stated for reference. It’s usually issued two weeks before a reporting period ends. Due dates that fall on a weekend or public holiday can be lodged and paid the next business day.
Other important things to do include, but are not limited to:
As previously mentioned, payments can be made either monthly or quarterly. A schedule is in place at the Australian Tax Office (ATO) for lodging statements per period. Make sure you’re aware of the dates relevant to you. Write them down on a calendar or calendar app; no matter what method you use, just be sure to take note.
Working with an accountant will be a huge help since they are far less likely to forget. They can also help navigate paperwork, especially if your business is new.
There’s also the annual basis, which is a GST return sent after the BAS of the 4th quarter. The due date for this is whichever comes first between the due date of your business’s yearly income tax return or the 28th of February.
The Business Activity Statement (BAS) is a detailed report on taxes payable to the government. This includes the likes of Goods and Services Tax (GST). Other factors include fuel tax credits and Pay-as-You-Go Installments. It’s important to keep the due dates in mind and to fill the BAS out completely.
Looking for the best accountants on the Gold Coast? Contact New Wave Accounting today! We provide end-to-end accounting and bookkeeping services that help scale and grow businesses.
Small and medium-sized businesses have a strong desire to grow, but they frequently fail to understand the fundamental requirements. One such issue is bookkeeping, which, if not addressed, may jeopardize your business operation.
Many business owners believe that accounting is a straightforward procedure and does not give it the required attention. Poor accounting and bookkeeping procedures, on the other hand, can hurt the financial health of any organization. In many situations, persistent bookkeeping errors might lead to your company’s collapse. Here at New Wave Accountancy, we spot plenty of accounting mistakes made by countless small businesses in Australia, which is why we’ve compiled the most common ones so you can avoid them and do better.
Even the most seasoned business owners occasionally fail to keep track of their financial activities. While it may not seem like a big deal if a meal ticket goes missing, these modest expenditures may add up quickly if they are disregarded regularly. You also don’t want the government breathing down your neck to see whether you’ve claimed expenses and don’t have any documentation to back them up.
Poor bookkeeping might cause you to miss out on tax deductions. A piece of printing paper is an outlay of funds, but the printer you purchased is a valuable asset. The latter can qualify for depreciation in your books, thereby lowering your tax liability.
Similarly, modest expenses that are tax-deductible may go unnoticed owing to simple bookkeeping errors. Often, these nominal costs add up to hundreds of dollars. Such a sum can significantly reduce the amount of tax due and save your business plenty of dollars in the long run.
Every month, you must reconcile your bank accounts. If there are discrepancies between your monthly statements and your books of accounts, make sure you get to the bottom of the issue. The majority of problems can be handled with a few minutes of inquiry.
However, if you reconcile once every few months, the work will grow enormous and virtually impossible to accomplish. Do it once a month rather than when shame compels you to.
Invoicing is an essential element of cash-flow management and is prioritized by every bookkeeper. However, most business owners find it difficult to receive payments on time. Bookkeepers typically contact clients to remind them to make their payments on schedule.
They explicitly notify customers of the late charge clause in the event of a delay without seeming pushy. New business owners frequently miss these aches and pains, resulting in late payments that disrupt cash flow into the business.
Some software packages are too complex for most business owners who are unfamiliar with double-entry bookkeeping. Subsequently, you’ll likely find yourself with a”shoe-box” full of material that will either expose you to danger in a tax audit or force your accountant to spend extra time and money sorting out.
These are only five of the most typical errors, but there are many more committed by business owners that do small-business accounting. These five issues especially will require a significant amount of time and effort to correct. They also pose the danger of leaving your accounting files useless, which will cost you a considerable amount of money when you take it to an accountant to have your tax returns/financials done.
Are you looking for quality bookkeeping on the Gold Coast? New Wave Accounting is the best choice. We’re the leading providers of end-to-end accounting and bookkeeping services that help you scale your growing business. Contact us today to learn more!
Because of the advancement of technology, digital platforms have become popular for people looking for jobs online. Right now, freelancing is one of the easiest ways to earn money in the digital space. It is a way to achieve work satisfaction while having the freedom to manage your own schedule.
However, since freelancing means working on your own, working independently means there are no paid sick days and no guaranteed income for freelances. Another issue freelancers face is taking care of their financial responsibilities. Therefore, as a freelancer, do you need to do it yourself, too or is it time to hire your accountant?
An accountant performs most of the financial functions on behalf of an organisation or individual. Freelancers don’t have much to audit, but accountants can provide financial advice and management. They are qualified and trained to provide services and solutions regarding the financial obligations and goals of a freelancer.
Hiring an accountant means added expenses, but getting one should save your work and help you with finances. They can take care of self-employed tax returns, expenses, freelance invoices, and so on. They can manage a freelancer’s taxes and applications with greater accuracy.
Normally, there are budget limitations when freelancers have just started their careers but that is the best time to ask for expert advice in managing your finances. If you’re on a limited budget, you can hire an accountant that only works for you when you need them. These accountants work in firms, which means you don’t have to pay a lot for their help.
Although it’s difficult to determine how much they charge, keep in mind that it depends on the scope of work, location, and quality of service.
A business needs to keep track of money coming in and out, prepare for taxes, and monitor the profit—which may be too much to handle alone. Accountants can save you time for other responsibilities. They can also manage your tax returns, which is often a difficult task for freelancers.
Lastly, they help a business grow. They do not only give you advice but also help your business grow based on their experience. You can always count on an accountant for expert advice.
The best time to get an accountant is during the early stages of your freelance career. Remember to invest in the right one and be careful in choosing the accountant. If all goes well, you should have no troubles with any of your financial concerns as they have likely taken care of it for you. All that’s left to do is to focus on your career and be your boss.
There are a lot of options for your investment during the start of your career. However, if you feel tired of handling your own money, tired of not knowing where your business is, or tired of having no advice at all, it’s time to hire your accountant. We at New Wave Accounting provide the best accountants along the Gold Coast. All you need to do is contact us today, and we’ll help you right away.
If you’re a law-abiding citizen, it means that you pay your taxes on time. The thought of paying your taxes can be daunting, but it’s one of your duties as a citizen of your country. When you pay taxes, it’s often done during “tax time”. In some countries, tax season runs between January to April in a year.
In Australia, however, it runs from July to October. Aside from paying taxes, you should also include other documents such as financial statements. If you ignore your tax duties, the government will come after you, and you certainly don’t want that to happen.
The good news regarding paying taxes is that there are possibilities of deductions in your payments. These deductions are known as tax returns. If you don’t understand how tax returns work, it’s important to know, as you are the taxpayer, after all. Below are some things that you need to know about tax returns.
Some countries, including Australia, implement the tax-free threshold, where people who earned less than $18,000 in the past financial year are exempted from paying taxes. This amount of untaxed income is then up to the citizen to use, such as investments.
This is where the tricky part comes in: if you earned below $18,200 in the past year, do you still need to lodge a tax return if your income is lower than the threshold? Read on further below.
You will need to lodge your tax return unless your income falls below the $18,200 mark. Not only that, but you will also need to file a Non-Lodgement Advice (NLA) form. This form will tell the Australian Taxation Office (ATO) that you’re not going to file a tax return and make sure that they don’t mark you as having a significant tax return. It can arouse suspicions, and authorities may very well watch you.
As for the dates where you can lodge your tax return ran from July 1 to October 31 last year. If you still haven’t done it yet, you better hurry since time can catch up quickly. The date where you can claim your tax return extends to May 15, 2021, if you appoint a registered tax agent.
It should also be noted that even if your income is less than the tax-free threshold, you may still be required to lodge a tax return. Keep in mind that this only applies if you paid taxes on your income. A tax return is required so you can get back the taxes you paid.
By not declaring taxable income in your financial statements, it can result in significant penalties. Below are the types of income that you have to declare:
It’s essential to take note that some incomes can be exempted from the declaration. These include government pensions, allowances, educational payments (including student allowances, scholarships and grants), insurance payouts, and even hobby income.
Unless you aren’t well-informed, paying taxes is not something you should worry about. You only need to lodge the correct and necessary documents. If you do, you get tax refunds that go back straight to you. The key to getting a significant sum of tax returns is to understand everything when it comes to paying taxes, so make sure to keep this guide in mind!
Keeping your taxes in order can be stressful, and can also feel heavy at times. An accountant is the best person who can help you when it comes to this matter. If you’re looking for accountants in Gold Coast, New Wave Accounting has got you covered! We can help you with your financial affairs, be it tax-related or otherwise. Contact us today and allow us to help you!
Every business in Australia must account for goods and services tax or GST. There are two methods of doing this: on a cash basis and a non-cash basis, known as accruals. The method you choose will impact when you need to report GST, making it crucial to know the difference between the two to ensure compliance.
Typically, businesses with an aggregated turnover of less than $10 million, including your turnover and the turnover of your closely associated partners or entities, or those who use cash accounting for income tax can deploy either method. The majority of larger corporations are required to use the non-cash method.
If you are qualified to use the cash method to account for GST, that means you’ll use your business activity statement, which must include the period in which you pay or receive payment for your purchases and sales.
To use the cash accounting method, you’ll need to fit into the following categories:
It’s best to consult with a Gold Coast accounting firm to determine if your enterprise can use the cash accounting method. Additionally, if none of the above applies to your situation, you can also request to use a cash basis to account for GST.
There are a few advantages to this method. It’s easier to manage your cash flow since the money that goes in and out of your business aligns with your activity statement liabilities much better. This method is also better suited for smaller entities that primarily deal with cash transactions.
Concessions and Purchases
There are concessions for small business entities and non-profit organisations. You must account for the GST applicable on the sales you’ve made and the payment you’ve received for them in the reporting period. However, if you receive only a part of the payment for a sale during this period, then you will account for the GST in the portion you received.
Similarly, you must account for GST credits on the purchases you’ve made in the reporting period in which you gave payment. You also need to have a tax invoice before claiming a GST credit except for purchases that are $82.50 or less. You don’t have to claim GST credits in the reporting period that you make your purchases in, but you are not required to, as you have four years to claim them. If you pay for only a portion of the cost of a business purchase in a reporting period, you can claim only the GST credit for the amount you’ve paid.
On the other hand, if you’re a larger business, you’ll need to use the non-cash basis to account for GST. You must account for GST on the business activity statement that includes the period you either received payment or have issued the tax invoice before receiving payment for a sale. It also applies to the period in which you received the invoice from your supplier before paying for the purchase. It’s an excellent way for ascertaining your actual financial position, showing you how much you owe and what you are owed. It will also assist you in dealing with various contracts and large amounts of money.
Sales and Purchases
You are required to account for the GST payable on the sales that take place in the reporting period where you issue a tax invoice or receive full or partial payment, whichever occurs first. If you receive a payment and haven’t given the tax invoice yet, you need to cover the GST amount in the reporting period in which the payment happened, even though it may not be the period you sent out the invoice.
Additionally, you need to issue a tax invoice for a purchase before claiming GST credits. It’s best to claim GST credits in the reporting period where you either received the tax invoice from your supplier or made a payment, whichever comes first. Still, you’re not obliged to claim your GST credits, and you have four years to do so.
Businesses must select the right method to account for GST. Hiring a business accountant on the Gold Coast will help you determine this and ensure your finances are on the right track, keeping you far away from being in the red.
New Wave Accounting is a team of accountants on the Gold Coast providing end-to-end accounting and bookkeeping services. We are well-versed in many industries and are experienced in creating tailored solutions for each of our clients. Contact us today to find out how we can help you!
Even if you’re running a small business, you’ll have to deal with heavy financial responsibilities to help keep your company running. Besides ensuring you’re making a profit, have enough for suppliers, and budget for campaigns, you also need to ensure that you’re financially capable of dealing with taxes.
One of the most critical tax-related responsibilities is registering for goods and services tax (GST). Fortunately, thanks to technological advancements, you can now register for GST online or on your phone. Besides that, you can even go through the traditional route and register with a BAS agent and small business accountant.
Thankfully, you only need to register for GST once. This is great news for business owners who run a few more businesses, allowing you to tick off collective business financial responsibilities.
If you’re thinking of registering for GST and you’re unsure of what to do, read on. This article is our beginners guide for GST registration for small business owners like you. Let’s get to it!
If your business isn’t registered for GST, you need to check every month to see if you’ve reached the limit or exceeded it. Ideally, you need to register within 21 days of your GST turnover when it exceeds the relevant threshold.
Here’s a quick run-through of when you need to register for GST:
Before registering for GST, you need to ensure that you have an Australian business number (ABN) to register your business under your name.
Once you have your ABN, you can register via online services by phone or with the help of a BAS agent or small business accountant. After completing the NAT 2954 form or “Add a New Business Account” form, you’ll get notified regarding your registration details, when it will be effective, and your other ABN details.
There are some penalties, interest, and complications that you may need to deal with when you don’t register for GST, like any form of tax. If you don’t register for GST, you may need to pay GST on sales since the day you were required to register.
To know if you have reached the GST threshold, you must experience the following:
Speaking to a small business accountant can make things easier for you when it comes to GST predictions, allowing you to be ready for registration when needed.
Although you can easily register for GST online, there are waves of things you need to consider before and after your GST registration. For this reason, hiring a credible small business accountant to guide you through the whole process is key to ensure that everything is in place for your business and GST needs.
If you’re looking for a small business accountant in the Gold Coast, consider working with New Wave Accounting.
We provide end-to-end accounting and bookkeeping services that will help develop small businesses in any industry. With the help of our expert accountants, we can provide you with tailored solutions that will help you build a stronger financial future for your business.
Learn more about how we can help you today!
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