The Tax Office regularly finds that this particular part of the return is often riddled with false claims or claims that cannot be positively verified as well as claims for expenses that are not even work-related at all!

Some of the most commonly claimed work-related expenses include car and travel, uniform and self-education.

Each year the Tax Office closely reviews tax returns from the previous year and will identify specific occupations where:

• average amounts of claims are high
• there is an increase in the number of people making claims, and
• there are a lot of people making claims for the first time.

Those occupations identified from last years returns as having particularly inconsistent claims for work-related expenses include truck drivers, sales and marketing managers, sales representatives and electricians.
The Tax Office has indentified some of the errors from employees in those areas of employment to include:

Truck drivers – claiming motor vehicle expenses associated with transporting bulky tools, including travel to and from work; claiming travel allowances they are not entitled to; and, not keeping adequate records to support claims for internet and mobile phone use.

Sales representatives, sales and marketing managers – over-claiming home office expenses such as rent, rates and electricity; failing to keep appropriate records for mobile phone and internet use as well as not adjusting claims to account for the proportion of private use; and, not keeping an up-to-date log book when claiming motor vehicle expenses.

Electricians – claiming motor vehicle expenses for carrying bulky equipment even though their employer has advised there is no requirement to carry the equipment or the equipment does not meet the bulky provisions; claiming the living away from home allowance when they are not entitled to it; and, not to keep a log book for expenses related to a one tonne vehicle when it is used for both business and private use.

This year the Tax Office will contact employees in the identified occupations to outline the common mistakes that are made and to provide advice on how to avoid these mistakes in future tax returns.

Whether or not you are employed in the nominated occupations to be targeted this financial year it is important to be diligent in your tax reporting and the deductions that you claim. There are a few simple things to remember when claiming work related expenses that, if followed, will ensure that you are legally compliant with your tax obligations whilst legally maximising your return. 

Remember:

• you must have incurred the expense in the year you are claiming it
• the expense must be work-related and not privateif the expense has been reimbursed by your employer it can’t be claimed
• receiving an allowance from your employer does not automatically entitle you to a deduction, and
• if your claims total more than $300 you need to keep written evidence.

If you would like more advice on claiming work-related expenses for your specific occupation or for any tax time related queries please contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.

The best way to determine which structure is best for you is to speak with your professional business advisors, including your accountant and tax lawyer as well as any other financial advisors that you might have. Your advisors will be able to work with you to devise the best business structure that will meet your intentions and the needs of the business.

One of the most common ways of using a business and trust structure is to have a family trust. Perhaps the main benefit of a family trust is that at the end of each financial year you are able to nominate which beneficiaries are to receive proceeds from the trust as well as how much each will receive. Of course the money never actually leaves the trust, but profits must be distributed and they are immediately re-invested back into the trust.

The benefit of this arrangement is that this allows funds to be distributed to those beneficiaries with the lowest income levels and therefore less tax is paid. For example, it may be ideal to direct proceeds to the younger members of the family or non-working spouses as their income will be in the lower range marginal income tax brackets.

Alternatively, if all of the beneficiaries of a family trust are earning significant amounts of taxable income then it may be beneficial to have a corporate beneficiary of the trust. In this situation, any proceeds that are allocated to the corporate beneficiary are taxed at the Company Tax rate of 30% as opposed to the higher marginal tax rates that may be applicable for individual beneficiaries. For example, if the individual beneficiaries are in the top marginal tax bracket a significant 15% could be saved off your tax bill.

You may also elect to have a company as the trustee for your family trust. This ensures that the trust is not owned or dictated by one individual but rather it is overseen by all directors of the company. In this arrangement all of the assets of the trust are legally held in the business name. This provides a level of asset protection for the trust and its assets as should the company or any individuals come into financial trouble the assets of the trust are secure and unable to be touched by any debtors.

As you can see, there can be significant benefits in adopting trust arrangements into your new or existing business structures. Family trusts, corporate trustees and corporate beneficiaries are just one slice of the pie. With the right advice and by implementing the optimal arrangement for your individual situation you can not only potentially reap the benefits of significant tax benefits but also secure the ongoing stability of your business and financial affairs.

Contact the team of professional lawyers and accountants at The Quinn Group to discuss the best business structure options for your business. Whether it is changes to existing structures or advice for new or proposed ventures we will work with you to ensure that your affairs are structured to work towards the goals you desire. Call us on 1300 QUINNS or click here to submit an online enquiry.

ATM Skimming is a relatively new method of fraudulently acquiring consumers personal banking details. Skimming is defined as the illegal copying of information stored on the magnetic strip of your debit or credit card. This information can be stolen via EFTPOS terminals and ATM’s. There are a number of warning signs that you should be aware that may indicate that card skimming is occurring. Take note of the following activities and always keep your eye out for these types of things when using your debit or credit card. Things to look out for include:

• A shop assistant takes your card out of your sight in order to process your transaction.
• You are asked to swipe your card through more than one EFTPOS machine.
• You see a shop assistant swipe the card through a different machine to the one you used.
• You notice something suspicious about the card slot on an ATM (e.g. an attached device).
• You notice unusual or unauthorised transactions on your account or credit card statement.If any of the above happen to you it is possible that you may have been a victim of skimming and you should immediately contact your financial institution.

Hoax emails and letters are also causing a wide range of security issues. Should you receive an email asking for confirmation of you PIN, password or username, do not reply. This is more than likely a scam. Your bank should never email you requesting you to confirm personal details. The best option if you are in this situation is to forward the hoax email to your bank. This helps the bank keep track of new emails being used to catch personal information.

It is important to be aware that it is not just banks that are used as scapegoats for this type of crime. The ATO is also regularly used as a guise to illegally gather personal information. The ATO is currently warning against an email that is being circulated offering taxpayers a 30% discount on their taxes. The email prompts the recipient to click on a link and provide their tax file number to be eligible for the concession. Obviously this it fraudulent. In situations such as this the old adage rings true, “if it seems too good to be true, it probably is”.

There are a few things that you should do to protect your personal information and ensure that your personal details are kept secure:

• Try to memorize your PIN and never keep your PIN with your card. This also applies to your internet banking account. Aim to memorize the login details to prevent them from being copied.
• As obvious as this may be, do NOT give your PIN/password to anyone. Your bank or credit union will NEVER call you to verify your PIN by telephone, fax or email. Ignore these requests and report them to your financial institution.
• Never click on links provided in emails to go to your institution, the ATO or other organizations page. These links will usually take you to a fraudulent page or site made to look like the real site.
• Always ensure that your card is kept in clear sight when any transaction is being processed.
• Check the ATM for any abnormalities/inconsistencies before you put your card in the reader, and be sure to check that no one is watching you enter your PIN.
• In the case of renewal cards, if you are expecting a new card and it has not arrived in a reasonable time, contact your bank or credit union.
• When you have received a new card immediately sign and activate the new card and destroy the old one.

If you suspect that you may have unfortunately fallen victim to card skimming, or hoax bank correspondence contact us on 1300 QUINNS or click here to submit an online enquiry. Additionally, please do not hesitate to contact us if you would like more information on how to better protect yourself from becoming a victim of card skimming or hoax bank contact. We can help you to ensure that you have the correct procedures in place to protect you and your family’s hard earned money.

Most people mistakenly believe that by nominating an intended recipient to their super fund that this is a binding nomination or that their benefit will be paid out according to their Will.

This is not the case. The person or persons that you nominate to your super fund is considered a preferred nomination and as such is not binding. This essentially means that other family members are able to dispute against the nominated recipient receiving the payment as the deceased had intended.

The most common circumstance where a dispute is likely to arise is where the person who has passed has remarried. Often the children from the first marriage believe that the benefit should be theirs and not given to the most recent partner.

From the super fund’s point of view, unless a binding nomination has been made, it is likely that the benefit will be paid to the surviving partner. The intention of a super fund is to finance a person, or a couples, retirement and it is assumed that the deceased and their partner at that time would have utilised the funds together in their later life. Therefore the surviving partner should not be deprived of the benefit from those funds.

Where the situation gets tricky is that not all super funds offer the option to make binding nominations. There is the choice of switching to a fund that has this option but that may not always be practical. Alternatively, if the fund member wants to leave their benefit to a charity or perhaps their grandchildren they can make a binding nomination to leave the benefit to their estate and then the funds will be distributed as per their Will. Another way to deal with this is that the member can acknowledge that the death benefit will be paid to their partner and can then structure their Will such that all other assets are left to the children or other parties of their choosing.

Whilst most do not like to think about dying and making arrangements for what will happen when we do, it is extremely important to plan for what you want to happen with your assets when you die. Failure to express your intentions and have them correctly documented so that they are binding could cause a lot of emotional and financial stress to those loved ones that you leave behind.

For more advice on binding nominations for your death benefit or to discuss Wills and other estate planning queries contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.

It is a well known fact that the easier you make it for people to buy your product or use your service the better chance you have of making the sale. In general, consumers in today’s environment are extremely time poor and do not have a lot of time to invest in complex and confusing sales processes. If it is too hard they will not bother with it, or worse still may go to a competitor of yours who makes it easier for them.

There are several stages to the purchase process that need to be addressed equally. First the consumer needs to know about what you are selling – how it works, how they can benefit from it, how much it costs and any terms or conditions. Following that, they need to make the order. Depending on how your orders are processed this may involve an order form and online process or a face to face transaction.

Where possible the order or sales process should always be clear, logical and easy to understand whilst providing all the information that the purchaser needs. Never assume that they will “just get it”. For products that are not simply reproducing the same product over and over the order may need to be more tailored to each individual buyer. In this case it is important that you have confident and knowledgeable staff on hand who are familiar with the product and are equipped to field any range of queries that may arise. This will not only make the process smoother and simpler but will ensure that the order that is placed is completed to both the supplier and customer’s satisfaction. Additionally, a hassle free sales process will give the customer a sense of confidence in your business as a whole and the individual product that you are selling.

What seems like something so obvious and easy can be the factor that makes or breaks your business. Making it easy for your customers to ask questions and obtain what they are after can potentially pave the way for continued and referred business from each and every happy customer.

Of course the sales process is not the only thing that helps to improve your sales figures and business growth. The following things can also impact a potential customer’s decision to do business with you:

• Does your place of business look approachable?
• Is your business easy to find? Do you have adequate and recognisable signage?
• Is there convenient parking nearby?
• Do you provide the maximum amount of service that is possible?
• Are you diligent about following up questions and queries?
• Do you use a toll free number?

These are just some things that whilst seemingly small can have a sizable impact on the success of your business.

From years of experience dealing with a range of small businesses the accountants and lawyers at The Quinn Group are able to provide advice to business owners to help them achieve maximum growth and profits through tried and tested business practices. For more advice on improving your business contact us on 1300 QUINN or click here to submit an online enquiry.

Following are a few frequently asked questions about the new Investment Allowance.

What is meant by “new”?
The description of the new investment allowance refers to the tax break being available for new, tangible depreciating assets or new expenditure on existing assets. The term new here refers to assets that have not been used anywhere, by anyone, except for those assets that have only been used for reasonable testing and trialing.

Do Cars Qualify?
Yes. New cars for business purposes as well as demonstrator vehicles provided they have only been used for reasonable testing and trialing. (Although this is provided that all the other criteria are met).

Do assets held under lease qualify?
If the asset being leased is new, a tangible and depreciating asset for which a deduction is available under the core provisions of Div.40, then it will be eligible for the tax break.

Div.40 provides an outline for determining who, in a leasing arrangement, is able to claim depreciation deductions in respect of the asset and hence would be entitled to claim bonus deduction in a leasing situation.

As with capital allowance deductions how the tax break is factored into lease prices will be a matter for commercial negotiations.

With most leasing arrangements it is the lessor who is considered to be the holder of the asset and therefore they are able to claim the bonus deduction, if it is eligible. However, in some cases if is deemed that the lessee is reasonably expected to own the eligible asset at some point in time then they may be able to claim the bonus deduction in relation to the asset.

Do Buildings Qualify?
No. Land, buildings, trading stock and intangible assets are all excluded from the definition of a depreciating asset in section 40-30. These assets are not eligible for the Tax Break.

Is the tax break available to more than just small business entities?
Yes. Bonus deductions are available to all businesses. However, small business entities only need to spend a minimum of $1,000 per asset in order to qualify for the 50% Tax Break. Other businesses need to meet the minimum spend of $10,000 to be able to qualify for the 30% bonus deduction.

What if I don’t meet the June 2010 installation deadline?
For general businesses, if you acquire or start to hold an eligible asset between 13 December 2008 and the end of June 2009 and do not install by 30 June 2010 then you will miss out on the 30% deduction. However, provided the asset is installed by December 2010 you will still qualify for the 10% deduction.

Small business have until 31 December 2010 to install or use their assets and still be eligible for the 50% bonus deduction.

This is just the tip of the iceberg when it comes to eligibility criteria and further details regarding the requirements for the bonus deduction. If you have any questions or would like advice on how you can use the new Investment Allowance to benefit your business, do not hesitate to contact a member of the The Quinn Group team on 1300 QUINNS or click here to submit an online enquiry.

You may be able to legally maximise your return simply by expanding your knowledge of what you are eligible to claim.

Running a business from home can yield many rewards. Home-based business owners can enjoy not just financial rewards but also positive shifts in their work-life balance and improved motivation through being their own boss and working everyday on something that they are passionate about.

Small business owners are generally well versed in their chosen business field but may not necessarily know the requirements and eligibility criteria when it comes to all things financial and tax related. Knowing what you are able to claim as a deduction can potentially reduce the amount of tax that you are liable to pay.

In general, deductible expenses that are particular to home-based businesses are occupancy expenses, running expenses and motor vehicles expenses.

Occupancy expenses are expenses that are incurred in relation to owning, renting or using a home, not necessarily related to a home-based business. Such expenses include rental payments, mortgage interest, council rates and house insurance premiums.

If your home work space passes the interest deductibility test then you are able to claim occupancy expenses as tax deductions. Generally the space must be clearly identifiable as a place of business (for example, a sign identifying your business at the front of the house), is unsuitable for private or domestic purposes, is used exclusively or almost exclusively for carrying on your business and is used regularly by your clients. However, you need to be careful when claiming some of these expenses as the claiming of mortgage interest and rates may subject the property to Capital Gains Tax. 

Running expenses are any increased costs that result from you using facilities within your home as part of your business activities and can includes expenses such as the electricity and gas cost of using a room, phone bills and cleaning costs.

These additional expenses incurred as a result of running your business from your home are usually able to be claimed as deductions, although the amount must only be the usage from the business not general house expenses.

There are various methods of calculating proportions and deduction amounts. Some ways include finding the percentage of floor space used the business, therefore being able to calculate the percentage of utilities used, or comparing the before and after the set up, utility expenses to find the usage. You should be able to provide information to support that your claim is reasonable and that the private or domestic proportion of the expense has been excluded.

Motor vehicle expenses another little known fact for home-based business owners is in relation to what can be claimed as motor vehicle expenses. Unlike most workers home-based businesses can generally claim a deduction for any travel costs incurred in business related travel. This means that if you are carrying on a home-based business you may be able to claim a deduction for travel expenses such as going to a client’s premises, purchasing equipment or supplies and doing your banking, mailing or visiting your tax advisor.

The most vital thing to remember when running your business from home is to document everything! You should keep all receipts and tax invoices, even though they may seem insignificant, together they may just add up to help you deduct a substantial amount from your gross income and thereby significantly reduce the amount of tax that you re liable to pay.

The optimal way for you to achieve the best tax rewards for your home business is to substantiate everything you think will be deductible, but to also have a proactive accountant.

A proactive accountant will not only do the number crunching, but will look at your records and advise for and against deductible areas in your business. This way you will ensure you get the most from your home business.

If you would like to speak with one of The Quinn Group’s many proactive accountants about how you can legally claim the maximum deductions for your home-based business or for any other tax or accounting queries contact us by calling 1300 QUINNS or click here to submit an online enquiry.

With the latest announcement it would seem that the Rudd government has responded to the global financial crisis by restructuring the budget to focus new stimulus spending around infrastructure construction, job protection and pensions funded by cuts to middle-class welfare. Many of these spending cuts however will not be fully impacted until the economy begins to recover.

Below we have summarised some of the most important changes in the 2009 Budget that may affect you.

Economy
The government predicts that the unemployment rate will peak to 8.5% in 2011. In response to this statistic and in an attempt to lessen the impact of such an outcome they have allocated almost $1.5 Billion over four years to retrain young and retrenched workers. Other winners from this budget include businesses that provide consulting services and products to the environment, building, infrastructure, defence and superannuation industries.  The big spending programs, including $8.5 billion in land-transport networks, $3.5 billion in clean-energy programs and $5.7 billion for higher education and innovation, an extension of the first-home-owners’ scheme, paid parental leave and increased pensions, aim to retain 210,000 jobs and ensure Australia out performs other economies. This budget is intended to be the “nation-building” budget.

Business
For small businesses the initially proposed 30% tax rebate on eligible capital assets will be increased to 50% for small businesses installing capital infrastructure before December 2010. New funding for research, research infrastructure and business innovation is also an important helping-hand for businesses. The government is also allowing $10 million for businesses seeking to improve their e-commerce facilities. The much anticipated paid maternity leave scheme comes into effect from January 2011, but unless private business contributes to the payment, it will have minimal effect with projected budget costs of $730 million over four years.

Superannuation
From 1 July 2009, the limit on salary-sacrificed and employer-paid superannuation will be set at $25,000 a year, which is half the current limit. For people over 50, the cap will also be halved to $50,000, and from 2012-2013 people over 50 will also be included in the lower $25,000 cap. It can bee seen that this is perhaps one of the Government’s attempts to generate some revenue as by capping the contribution limits employees and other super fund contributors will now have to find alternative means for storing or investing their money. It is more than likely these other forms will be taxed at a higher rate than the super funds and hence this creates extra revenue for the Government.

In addition, the government’s contribution to the superannuation co-contribution scheme will be temporarily reduced for three years. This will give the government a saving of almost $1.4 Billion over the next four years.

Infrastructure
The government is looking to implement improvements to road, rail and ports over the next 6 years allocating $8.4 billion to improve city livability.  The bulk of this funding is aimed at improving metropolitan rail links and the main road transport route between Melbourne and Cairns.

Investors
A tax loophole for the wealthy has been lost. Under the new rules, people who earn more than $250,000 a year will no longer be able to deduct losses from their unprofitable businesses from their own income; the loss will only be deductible from business income. For shareholders the rules relating the use of private company assets will tighten, meaning the use of company owned assets such as cars, boats and properties without paying tax will not be allowed.

Tax
The government has honoured already announced personal income tax cuts. From 1 July the tax rate in the $80,000 to $180,000 tax bracket will drop from 40% to 38% then to 37% from 1 July next year.

Despite the introduction of the promised tax cuts, in combination with high levels of spending in many other areas, the federal budget is forecast to remain in deficit for the next 6 years.

The 2009 budget is a recovery budget with the key areas of infrastructure construction, job protection and pensions being substantially funded by cuts to middle-class welfare being the core focus. Whilst this budget will aim to help Australia recover from the recession most of the proposed effects will not be seen until the economy recovers.

The team of legal and accounting professionals at The Quinn Group pride themselves on keeping up to date with the latest Australian consumer and business news and advancements. If you would like advice on how you can make the most of the current economic climate and optimise your financial position contact us on 1300 QUINNS or click here to submit an online enquiry.

As with most fraud cases, the perpetrator may be seen to somewhat “get away with it” for a significant period but the hands of justice will always catch up with them and when they do it is not simply a fine or a slap on the wrist. Tax fraud is a serious crime and is punished as such.

Recently, the Tax Office released the story of a 34 year old Sydney woman who has been sentenced to seven years jail after being found guilty of obtaining financial benefit by deception, attempting to obtain financial benefit by deception and dealing with the proceeds of crime. It was found that the woman had falsified over 15 activity statements resulting in claims for over $500,000 of GST refunds.

This is indicative of the little tolerance that the ATO and other relevant authorities have for any attempts at fraud, whether it be identity or tax related.

The Tax Office is extremely diligent when it comes to regulating the lodgment and claims practices of taxpayers across the country. It has a range of comprehensive procedures and programs in place that allow them to identify and investigate unusual activity and claims.

The correct lodgment of tax returns and activity statements as well as the prompt and thorough payments of any tax obligations not only ensures that you are protected from any penalty payments or unwelcome audits but also allows our tax system to run as smoothly and fairly as possible. Those who insist on trying to do the wrong thing by the system will inevitably be brought to justice but are significantly disadvantaging the majority of taxpayers who are trying to do the right thing.

A few things that you can do to help ensure that you are operating within the requirements of the Tax Office include simple tasks such as:

• Ensure that your business is registered for the appropriate taxes.
• Advise the relevant organisations of any change of contact details in a timely manner. This will ensure that you don’t miss any important information and are easily contactable should the need arise.
• Keep accurate and adequate records – especially for unusual or infrequent transactions, such as Capital Gains Tax.
• Only claim what you know is a genuine tax deduction.
• Use only legitimate business structures.
• Be diligent and ensure that all required forms and returns are lodged on time.
• You can pay the minimum tax you are legally required to, but be sure to always pay some tax as businesses that continually report losses can often become a target for audits.
• Never “back date” documents.
• Employ the resources of a professional accountant and/or tax advisor. They will be able to provide you with general and ongoing advice specific to your situation and also assist you to:
  o Undertake a risk assessment review to identify areas that could potentially trigger a problem, and a possible audit.
  o Provide reliable taxation advice on any significant tax issue, particularly in relation to transactions that involve a significant amount of money.
• You should also contact a professional if you are having problems meeting your current obligations, they may be able to help you address the situation before it escalates.

Adopting the above tips into your regular business practices will not only help you to keep your accounts in order and may also assist in reducing your chance of being audited as the Tax Office may be able to see that you are operating compliantly and you will reduce the chance of raising any alarm bells on their radar.

All types of tax, GST in particular, can be somewhat confusing and daunting for many small business owners. For this reason it is important that you seek the services of a professional tax agent or accountant. This will ensure that you not only get the maximum returns that are due to you but also that you are meeting all of you tax obligations in a legally compliant manner.

If you have any questions or queries regarding anything tax, accounting or audit related call us on 1300 QUINNS or click here to submit an online enquiry and one of our team will contact you to discuss how The Quinn Group can help you.

Under the COAG plan, it is intended that draft legislation of the proposed new laws will be ready for consideration within a period of 12 months. A specialist Taskforce, as appointed by the Attorney-General, will be charged with the duty of preparing the new legislation and the Taskforce will receive advice from, and be assisted by, a Consultative Group, who will also be appointed by the Attorney-General.

The current legislation governing the regulation of the Australian legal profession is extremely complex. Not only does it have widespread inconsistencies, there are approximately 55 different regulators across the country.

This makes it difficult for those involved in the Australian legal system in any respect, from lawyers to consumers and clients, as the existing laws see that there are different practices that apply in different jurisdictions. Such discrepancies are in relation to items such as costs disclosure and billings, the relevant processes for the carrying out of admissions and the issuing of practicing certificates, as well as procedures for the handling of complaints and professional discipline matters.

These arrangements are no longer appropriate or relevant to the current operations of our national community, as lawyers and consumers in today’s environment often do not operate in just one particular State or Territory. More and more practitioners and consumers find themselves involved with matters that cross State borders and under the current legislation this can prove difficult to administer.

The initiation of a singular regulatory system for the legal profession is seen to be in the interests of moving forward towards a seamlessly operational national economy. It is no longer practical for there to be such notable differences from one jurisdiction to another.

This change, once introduced, will see benefits for all those affected by or involved with the Australian legal profession regardless of the level of their involvement – the consumers, lawyers and law firms.

For the consumers it is proposed that they will experience increased competition in the marketplace, as well as a reduction in compliance costs and simpler and more transparent billing arrangements, whilst lawyers will enjoy the increased flexibility of being able to operate more easily across jurisdictions.

These changes are a step in the right direction for law regulation in Australia. As our economy and our national community develop so to should our practices and legislation to accurately monitor and facilitate this progression.

At The Quinn Group we are excited by the imminent transition and development of our industry and we embrace the advancement of this field. To that end, we pride ourselves on keeping up to date with all the latest changes. If you require legal advice or assistance on anything from employment or business law to Wills and conveyancing contact us now on 1300 QUINNS or click here to submit an online enquiry and one of our professional lawyers will contact you to discuss how The Quinn Group can help you.