FOCUS ON … TAX TIME
Minimising all the risk At BJT Business Advisors, tax is just one small part of what is done for clients. Principal Michelle Beadle said that one of the fundamental aspects of owning a business was ensuring that your personal assets are protected from any misfortune that the business may be exposed to. "Operating a business can be extremely rewarding, but it can also be risky," Ms Beadle said. "Some businesses operate in a high-risk industries, for example, asbestos removal, or a high-risk environment for example, restuarants and food preparation businesses. "There are other factors that can expose a business to risky situations, such as customers who go bankrupt, which, depending on the size of the customer, can put a great deal of pressure on your business. "As a result, sometimes businesses are sued, and sometimes they go broke. A fundamental aspect of operating a business is to try and contain the damage to only one aspect of your life. This is where having the right business structure in place, along with good insurance, can mean that your personal assets have better protection than if you were operating as a sole trader." Ms Beadle said there were a few key business structures that are used in Australia, and each has their pros and cons. "Talking to your accountant will help you, as a business owner, to understand what the best structure is for your situation." BJT Business Advisors is based in Berwick, and works with businesses and family groups all over Australia. The team's experience, empathy, and expertise means that your business is well looked after both now and in the future. For more information, visit www.bjtbusinessadvisors.com.au
The team at BJT Business Advisors, from left, Michelle Beadle, Donna McKerchar, Chanda Limbu and Carolyn Keen.
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ATO says Lego not allowed in crackdown The Australian Taxation Office (ATO) has published some of the most unusual claims that they disallowed last financial year. Nearly 700,000 taxpayers claimed almost $2 billion of ‘other’ expenses including non-allowable items such as dental costs, child care, and even Lego sets. Assistant Commissioner Karen Foat said that a systematic review of claims had found, and disallowed, some very unusual expenses. “These claims add up to a lot of money. If the deduction isn’t directly related to earning income, we can’t allow it.” “A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job – and was therefore deductible. It isn’t and their claims were disallowed.” “Another taxpayer claimed the Lego sets they bought as gifts for their children. Unsurprisingly, this claim was disallowed. Personal gifts don’t qualify, and it’s not okay to ask Australian taxpayers to subsidise presents.”
‘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. However, the ATO review found that some taxpayers were incorrectly claiming a range of private expenses such as child support payments, private school fees, health insurance costs and medical expenses, all of which are not allowable. “Where people make genuine mistakes, we simply disallow the claim. But when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty,” Ms Foat said. “We want people to understand what expenses they can claim and receive every dollar they are entitled to. But making incorrect claims that are personal or private take funding away from providing essential community services, and that’s not ok.” Remember, in order to claim an ‘other’
deduction, the expenses must be directly related to earning income and you need to have a receipt or record of the expense. If your expense relates to your employment, it should be claimed at the work related expenses section of the return. To find out more about what deductions you can claim this tax time, visit: ato.gov.au/ individuals/mytax/2019/in-detail/other-deductions/ To find out more about the penalties for making false or misleading statements, visit: ato.gov.au/penalty The ATO myDeductions app makes it easier and more convenient to keep your expense and income records in one place. For more information visit: ato.gov.au/mydeductions.
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