All our other contact details, phones & email etc, remain unchanged.

The post We Have Moved (but not far…) appeared first on Mark Accountants.

The Australian Government’s Digital ID app myGovID is now called myID. The updated app is being rolled out in app stores from 13–17 November 2024.

During this time, you might see both myID and myGovID when using your app to log in to participating government online services. This won’t affect your access, and your Digital ID will remain fully functional and secure.

Australian Taxation Office (ATO) Assistant Commissioner Rob Thomson said while the myID name is new and may look different, users will use it the same way to securely access more than 150 participating government online services.

’Existing users will have all their identity-related information seamlessly carried over into the new version, they do not need to set up a new myID. The app should automatically update if you have enabled auto-update on your device, otherwise you can download the app manually from the official app stores once available, Mr Thomson said.

‘myID will continue to provide Australians with a more secure and flexible way to prove who they are when accessing government online services, without needing to repeatedly share copies of their personal documents such as passports, birth certificates and driver’s licences.’

‘New users can download the myID app on their device and join over 13 million people using the app to verify their identity for business and personal matters.’

The ATO reminds the community to watch out for scammers seeking to take advantage of the name change. The ATO is seeing various impersonation scams designed to steal personal information, including myGov sign in credentials. To help protect yourself:

• Don’t click on suspicious links, open attachments or download any files from suspicious emails or SMS. The ATO will never send an unsolicited SMS that contains a hyperlink.
• As we transition from myGovID to myID – you do not need to set up a new myID or reconfirm your details. If you’ve been prompted to go to a website to do so, this is a scam.
• Only download the myID app from the official app stores (Google Play and the App Store) and ensure you turn on notifications, so you are notified when accessing online services.
• Never share, or enter your login code for anyone.
• If you suspect any suspicious activity on your myID, report it immediately to the ATO’s support line.

Source: ATO

The post myGovID is Now Called myID appeared first on Mark Accountants.

The next time you access government online services like Online services for business, Access Manager or Relationship Authorisation Manager (RAM), you’ll notice some changes to the myGovID login screen.

These changes improve and modernise the login experience but do not impact how you login with your myGovID. You’ll still:

• enter your myGovID email address to receive your 4–digit code
• log into your myGovID app using your 10–character password, fingerprint or face
• enter or accept the 4–digit code in your app.

Your myGovID security is a top priority. Here are some important reminders when accessing government online services:

• Always access online services from the official login page, such as Online services for business, or through the list of participating services on the myGovID website.
• Make sure that the URL displayed in your browser includes https://www.myGovID.gov.au or https://myGovID.gov.au.

Stay alert and report any suspicious activity to the myGovID support line.

Source: ATO

The post Noticed the myGovID Login Screen Looks Different? appeared first on Mark Accountants.

Are you in business?

Before you register for an Australian business number (ABN), it is important you determine if you are in business and when your business starts.

Knowing if you’re in business helps you know what records you need to keep, and what obligations you have.

What to consider before starting a business

Understanding the road ahead and doing your research and planning is critical for your success.

The Guide to starting a business on business.gov.au helps you navigate these steps.

It’s also important to:

• know that you are ready to start a business
• talk to people with similar businesses, or a trusted business adviser
• speak with a registered tax professional
• contact your local industry association
• look at the ATO’s website and small business benchmarks to see how businesses perform in your industry
• research financial information for your business – how much will it cost to start your business, to be in business, and can you access grants or loans?
• decide which business structure is right for you as this determines the tax you will need to pay
• know what records you may need to keep and income and deductions you need to declare or claim, and from when this needs to happen
• know what registrations you need to have in place, and from when.

Getting up and running

• Registrations and insurance
• Business reporting, income returns and deductions
• Engaging with us online
• Hiring workers

Registrations and insurance

Once you have started a business, you need to meet specific business obligations. This includes any required registrations or business insurance.

You may need an Australian business number (ABN). This unique 11-digit number identifies your business or organisation to the government and community. An ABN has its own set of obligations.

You may also need to:

• register for goods and services tax (GST), which is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia
• register for pay as you go (PAYG) withholding and meet your super obligations for any employees you hire
• register for fringe benefits tax (FBT) when you are providing fringe benefits to your employees.

You can apply for an ABN and other key business registrations through the Business Registration Service.

You may also need business insurance and licences to protect your business. It’s important to understand the licences and permits you need to do certain activities and help protect your business and employees.

Business reporting, income returns and deductions

Income you receive from your business activities is assessable income and must be declared on your income tax return.

A tax return needs to be lodged for each sole trader, partnership, trust and company you are running.

Sole traders need to report all income, including business income, in their individual tax return.

You can claim a business tax deduction for most expenses you incur in carrying on your business, as long as they are directly related to earning your assessable income. If you are registered for GST, you will also need to lodge a business activity statement (BAS).

Engaging with us online

The ATO’s online services are quick, easy, tailored and secure. They let you manage most of your reporting and transactions with us at a time that’s convenient for you.

You can use:

• Online services for individuals and sole traders
• Online services for business for approved self-managed super fund (SMSF) auditors, businesses, and other organisations.

Hiring workers

If you’re thinking of hiring a worker, it’s important to understand your tax and super obligations as an employer.

Before you hire your first worker you need to:

• set up single touch payroll (STP) to meet your employer obligations
• register for PAYG withholding
• set up your business to pay superannuation contributions to your worker’s nominated fund
• register for FBT if you provide benefits in addition to wages
• see if you need to register for state and territory payroll tax
• use the ATO’s online services to manage your registrations and obligations.

Setting yourself up for success

• Cash flow management
• Record keeping
• Business banking
• Technology

Businesses that are operating well and meet their obligations usually have the same things in common.

They:

• have good cash flow management practices
• use technology to help run their business
• keep good records and have good accounting systems
• seek the advice of a registered tax professional or business adviser.

With accurate record keeping and digital tools, it’s easier to track, monitor and make improvements to your cash flow. It also makes it easier to report to the ATO and make payments.

Cash flow management

Managing your business cash flow and knowing the amount of money that goes in and out of your business – that is, income and expenses – allows you to make better business decisions.

It also makes it easier for your business to pay bills and other costs and meet your tax, GST, superannuation and employer obligations.

In your first year of business, you can meet your obligations by:

• making tax pre-payments into your tax account
• putting money aside for your expected tax bill
• voluntarily entering into PAYG instalments.

For help with understanding how to manage your business cash flow:

• attend the ATO’s free Budgeting for your commitments webinar
• ask your trusted business adviser or registered tax agent about the Cash Flow Coaching Kit.
• visit business.gov.au and learn about how to create a budget and how to improve your business’s financial position.

Record keeping

As a business, for tax purposes you must keep detailed records for all transactions related to your tax, GST and superannuation affairs as you start, run, sell, change or close your business.

Keeping accurate and complete records for all your business transactions will also help you manage your business and its cash flow.

Business banking

Understanding your business banking obligations is important. Different business structures have their own record keeping requirements.

• If you’re operating as a partnership, company or trust, you must have a separate bank account for tax purposes.
• If you’re operating as a sole trader, you do not have to open a separate business bank account, but it’s a great idea to do so and will save you time when working out what transactions are personal and business.

Further information about organising your finances can be found on business.gov.au.

Technology

The right digital tools will help you perform daily business activities and meet your tax, GST and super obligations. They also make it easy for you to engage with us when it is convenient to you.

Small businesses can use:

• Online services for individuals and sole traders
• Online services for business
• the ATO app – to access and manage your tax and super on the go
• eInvoicing – a fast, easy and secure way to automatically send and receive invoices through your software
• digital record keeping software systems – to track your income and expenses from the start of your business
• electronic payment systems – if you are making sales in your business, you will need to select a payment system. Your customers then pay for your goods or services electronically, making it easier for you to reconcile your expenses, including
  • tap-and-go (contactless) payments
  • credit and debit cards
  • EFTPOS
  • online payments
  • smart phone and tablet card processing.

Any payment software you use must not have any payment suppression tools.

Support for your business

The ATO is here to help you on your business journey. We offer a range of learning resources, tools and services to support your business.

• Tax time support for your business.
• Free webinars to improve your skills and knowledge to be successful in your business venture.
• Calculators and tools to help you run your business.
• A small business newsroom – subscribe and get the latest tax and super news delivered to your inbox.
• ATO app – to access and manage your tax and super on the go.
• Join the discussion online – follow us on social media for tips and updates or check out our ATO Community forumExternal Link to ask questions about tax and super.
• National Relay Service External Link – if you have difficulty hearing or speaking to people on the phone, you can contact us through the National Relay Service.
• National tax clinic program – if you’re experiencing difficulties and can’t access or afford professional advice or representation with your tax affairs, the tax clinic program may be able to help.
• Registered tax or BAS agents External Link– contact a registered agent to help manage your tax and super.
• Contact us – if you need more help.

Aboriginal and Torres Strait Islander peoples and other languages

In addition to our range of tools and services, we have information:

• on Tax for businesses for Aboriginal and Torres Strait Islander peoples
• in languages other than English (including Arabic, Chinese, Hindi, Korean, Punjabi and Vietnamese) to help people from culturally and linguistically diverse backgrounds understand tax and super in Australia.

If you would like to speak to us, you can also:

• phone our Indigenous Helpline on 13 10 30
• phone the Translating and Interpreting Service (TIS) on 13 14 50 if you would like to talk to us in your language.

Source: ATO

The post Before You Start a Business appeared first on Mark Accountants.

Holiday Home – Not Rented Out

If you own a holiday home and don’t rent out the property, you don’t include anything in your tax return until you sell it.

When you sell the property, you will need to calculate your capital gain or loss.

Keep all records from the time you purchase the property until the time you sell it to be able to work out the capital gain or loss when you sell.

Holiday Home – Rented Out

If your holiday home is rented out, you need to include the rental income you receive as income in your tax return.

You can claim expenses for the property based on the extent that they are incurred for the purpose of producing rental income.

You will need to apportion your expenses if:

• your property is genuinely available for rent for only part of the year
• your property is used for private purposes for part of the year
• only part of your property is used to earn rent
• you charge less than market rent to family or friends to use the property.

It may not be appropriate to apportion all expenses on the same basis. For example, expenses that relate solely to the renting of your property are fully deductible and you would not need apportion them based on the time the property was rented out. Such expenses include:

• real estate commissions
• costs of advertising for tenants
• phone calls you make to a tradesperson to fix damage caused by a tenant
• the cost of removing rubbish left by tenants.

On the other hand, no deduction can be claimed for expenses that relate solely to periods when the property is not genuinely available for rent, used for a private purpose or relates to the part of the property that is not rented out. This would include the cost of cleaning your holiday home after you, your family or friends have used the property for a holiday or a repair for damage you have caused while staying there.

For information on how to apportion expenses, see the examples in Holiday home – part year rental.

Holiday Home – Not Genuinely Available for Rent

Expenses may be deductible for periods when the property is not rented out if the property is genuinely available for rent.

Factors that may indicate a property isn’t genuinely available for rent include:

• it’s advertised in ways that limit its exposure to potential tenants – for example, the property is only advertised
  • at your workplace
  • by word of mouth
  • on restricted social media groups
  • outside annual holiday periods when the likelihood of it being rented out is very low
• the location, condition of the property, or accessibility of the property mean that it’s unlikely tenants will seek to rent it
• you place unreasonable or stringent conditions on renting out the property that restrict the likelihood of renting out the property, such as
  • setting the rent above the rate of comparable properties in the area
  • placing a combination of restrictions on renting out the property – for example, requiring prospective tenants to give references for short holiday stays and conditions like ‘no children’ and ‘no pets’
• you refuse to rent out the property to interested people without adequate reasons.

These factors generally indicate the owner doesn’t have a genuine intention to earn rental income from the property and may have other purposes, such as using it or reserving it for private use.

Example – property advertised for rent but rent is excessive

Viraji owns a holiday home and has a real estate agent who advertises the property for rent. The market rent of comparable properties in the same location as Viraji’s holiday home is $2,000 a week. Viraji arranges for her property to be advertised at $4,000 a week or $570 a night.

At no time during the year does anyone rent the property. Viraji does not reduce the rent at any time and uses the property herself for holidays.

Viraji’s property is not genuinely available for rent. Her intention is not to earn rental income but to reserve it for her own use. Viraji can’t claim any deductions for the property.

Viraji needs to keep records of her expenses. If she makes a capital gain when she sells the property, her property expenses (such as property insurance, interest on the funds borrowed to purchase the property, repair costs, maintenance costs and council rates) are taken into account in working out her capital gain.End of example

Example – unreasonable rental conditions placed on property

Josh and Maria are retired and own a holiday home where they stay periodically. They have a real estate agent advertise the property for short-term holiday rental. Josh and Maria instruct the agent that they must personally approve tenants before they are permitted to stay. Prospective tenants must provide references and have no children or pets.

At no time during the year do Josh and Maria agree to rent out the property even though they receive a number of inquiries. The conditions placed on the renting of the property and Josh and Maria’s refusal to rent it to prospective tenants indicate their intention isn’t to earn rental income from the property, but to reserve it for their own use. Josh and Maria can’t claim any deductions for the property.

Josh and Maria need to keep records of their expenses. If they make a capital gain when they sell the property, their property expenses (such as property insurance, interest on the funds borrowed to purchase the property, repair costs, maintenance costs and council rates) are taken into account in working out their capital gain.End of example

Example – private use by owners during key periods with little or no demand for property at other times

Daniel and Kate have 2 school-aged children and own a holiday house near the beach. The house is located in an area that is popular with summer holiday-makers but is only accessible by four-wheel drive vehicles.

During the year, Daniel and Kate advertise the property for rent through a local real estate agent. However, Daniel and Kate advise the agent that during each school holiday period, the property isn’t to be rented out. They want to reserve the property for their own use.

While there is demand for the property during the summer holiday period, there is no demand outside this period because of the small number of holiday-makers, the location and the limited access to the property. The house isn’t rented out at all during the income year.

In Daniel and Kate’s circumstances, they can’t claim any deductions for the property. They don’t have a genuine intention to earn rental income from the property. It is essentially for private use.

If in the circumstances Daniel and Kate happen to rent out the property for a period, they can claim a deduction for a proportion of their expenses based on the period the property is actually rented out. For example, if the house is rented out for 2 weeks, they can claim a deduction for their expenses for 2 weeks out of the 52 weeks in the year.

Daniel and Kate need to keep records of their expenses. If they make a capital gain when they sell the property, the proportion of expenses (interest, insurance, maintenance costs and council rates) they could not claim as a rental deduction because it relates to their own occupation of the property, are taken into account in working out their capital gain.End of example

Holiday Home – Part Year Rental

If you rent out your holiday home and also use it for private purposes, you must apportion your expenses. You can’t claim deductions for the proportion of expenses that relate to your private use or if it was not genuinely available for rent, such as when used or reserved for yourself, friends or family.

If your holiday home is rented out to family, relatives or friends below market rates, your deductions for that period are limited to the amount of rent received.

Example – investment property made genuinely available for rent, with minor private use

Gail and Craig jointly own a holiday home which they rent out at the market rate to holiday makers. They have a property manager at a local real estate agent advertise it for rent during the year and communicate regularly to ensure the property is being managed. Gail and Craig consider renting out the property on a long-term lease; however determine they can derive more profit from short-term rental.

The property is available for rent during all holiday periods, including weekends, school holidays, Easter and Christmas. Gail and Craig use the property themselves for 4 weeks during the year, in ‘off-peak’ periods when they are unlikely to find tenants.

During the year, Gail and Craig’s expenses for the property are $36,629. This includes $1,828 for agent’s commission and the costs of advertising for tenants. It also includes interest on the funds borrowed to purchase the holiday home, property insurance, maintenance costs, council rates, the decline in value of depreciating assets and deductions for capital works.

Gail and Craig receive $25,650 from renting out the property during the year. They can claim the full amount for agent’s commission and advertising ($1,828) as a deduction. The other expenses incurred by Gail and Craig ($34,801) can be claimed based on the proportion of the income year the property is rented out or is genuinely available for rent. They can’t claim any deductions for the 4 weeks they use the property themselves.

Gail and Craig’s rental income and deductions for the year are as follows:

• rent received = $25,650
• rental expenses ((48 ÷ 52) × $34,801) + $1,828) = $33,952
• rental loss is $25,650 − $33,952 = ($8,302).

As they are joint owners, Gail and Craig claim a rental loss of $4,151 each in their tax returns.

Gail and Craig need to keep records of their expenses. If they make a capital gain when they sell the property, the expenses (interest, insurance, maintenance costs and council rates) they couldn’t claim as a rental deduction relating to their own occupation of the property are taken into account in working out their capital gain.End of example

Example – rented out for part of the year at market rates

Akshay and Jesminda have a holiday home. They rent it out between 20 December and 17 January because they can make a significant amount of money, This helps offset the costs of owning the property for the year. They reserve the property for their own use for the rest of the peak holiday period, and a number of other weekends during the year.

Akshay and Jesminda receive $3,000 a week from renting the property out during the 4 weeks over the Christmas-New Year period. The property is not rented out any other time during the year.

Akshay and Jesminda’s expenses for the holiday home for the year are $32,300. This includes $1,100 for agent’s commission and the cost of advertising for tenants. It also includes interest on the funds borrowed to purchase the property, property insurance, repair costs, maintenance costs and council rates.

Akshay and Jesminda can claim a deduction for the fully amount of the agent’s commission and advertising ($1,100) but they can only claim the other expenses they incurred a for the proportion of the year they rent out the property (4 weeks). They declare net rental income in their tax returns as follows:

• rent received = $12,000
• rental deductions ((4 ÷ 52 weeks) × $31,200) + $1,100 = $3,500
• net rental income $12,000 − $3,500 = $8,500.

As they are joint owners, Akshay and Jesminda declare net rental income of $4,250 each in their tax returns.

Akshay and Jesminda need to keep records of their expenses. If they make a capital gain when they sell the property, the expenses (interest, insurance, maintenance costs and council rates) they can’t claim as a rental deduction relating to their own occupation of the property are taken into account in working out their capital gain.End of example

Example – not available for rent for part of the year

Bindi and Ash own a holiday home in a regional town located close to several bushwalking tracks. The most popular times for tourists to visit the town is over the warmer summer months up until the end of the Easter school holidays. The state and local government requires the owners of properties let on a short-term basis to register their accommodation and limits the number of days during the year it can be let on a short-term basis to 180 days.

To keep within the 180-day limit, Bindi and Ash don’t advertise or let the property on a short-term basis from the end of April to the end of October each year. During this period, they use the property themselves or allow family and friends to use it.

During the period from November to April, Bindi and Ash receive $18,500 from renting their holiday home. They incur expenses of $32,250 in respect of the property over the whole income year. This amount includes agent’s commission and advertising costs of $2,535.

The property is not rented or genuinely available for rent during the period from 1 July to 31 October or from 29 April and 30 June (186 days). Bindi and Ash can’t claim a deduction for expenses incurred during this period. They can claim expenses for the period the property when the property is rented or genuinely available for rent (179 days) and for the full amount of the agent’s commission and advertising as that relates solely to the period it was rented.

Bindi and Ash calculate their deduction for the property as:

• ((179 days ÷ 365 days) × $29,715) + $2,535 = $17,108

The net rental income from the property is $1,392 ($18,500 − $17,108). Bindi and Ash jointly own the property so they each declare net rental income of $696 in their returns.End of example

Example – rented out for part of the year at market rates

Marie purchases a property in a seaside holiday town so that her family can holiday there over the December to January school holidays and Easter period each year. For the remainder of the year, Marie rents the property out via an accommodation sharing platform so that she can claim some of the costs of holding the property against the rental income.

On the platform, Marie ‘blocks out’ the school holiday and Easter periods for her family’s use. The town’s busiest times for tourists are during the school holidays; particularly the December/January period when the weather is warmest.

Marie uses the property personally for 20 days per year over December to January holiday period and a total of another 20 days during school holidays and Easter. Marie rents out the property to other holiday-makers for 25 days per year at times outside school holidays and Easter.

Marie receives $3,000 from renting her property and incurs expenses of $60,000 in relation to the property which includes $450 commission paid to the accommodation sharing platform when the property is rented.

Marie can’t claim any deductions for:

• the time she uses the property herself
• the period the property is not in use.

Marie can claim deductions for the period the property is actually rented (25 days). Marie would calculate her deductions as:

• rent received = $3,000
• rental expenses ((25 ÷ 365) × $59,550) + $450 = $4,529
• net rental loss = $3,000 − $4,529 = ($1,529).

Marie can claim a net rental loss of $1,529 in her income tax return.End of example

Example – private use by owner and rented to relatives/friends at a discounted rate

Kelly and Dean jointly own a holiday home. During holiday periods, the market rent is $840 a week. They have a real estate agent advertise it for rent during the year and communicate regularly to ensure the property is being managed.

Kelly and Dean arrange with the agent for their friend Kimarny to stay at the property for 3 weeks at a nominal rent of $200 a week. They also use the property themselves for 4 weeks during the year.

During the year, Kelly and Dean’s expenses for the property are $40,000. This includes interest on the funds borrowed to purchase the holiday home, property insurance, the agent’s commission, maintenance costs, council rates, the decline in value of depreciating assets and deductions for capital works.

Kelly and Dean receive $600 from renting out the property to Kimarny during the year. They can’t claim any deductions for the 4 weeks they use the property themselves or the period that the property is not rented out.

Kelly and Dean can claim a deduction for their expenses based on the proportion of the income year the property is rented out or is genuinely available for rent at market rates:

• (45 ÷ 52 weeks) × $40,000 = $34,615.

Kelly and Dean can claim deductions for the 3 weeks Kimarny rented the property but they can only claim deductions equal to the amount of rent during that period ($600). This is because the rent they receive from Kimarny is less than market rate and their expenses are more than the rent received during that period ((3 ÷ 52) × $40,000 = $2,308).

Kelly and Dean’s rental income and deductions for the year are as follows:

• rent received = $34,200
• rental expenses = $34,615 + $600 = $35,215
• net rental loss = $34,200 − $35,215 = ($1,015)

As they are joint owners, Kelly and Dean declare net rental loss of $508 each in their tax returns.End of example

Example – rented to relatives/friends at a discounted rate where expenses are less than the rent received for the period

Shahani and Marvin jointly own a holiday home. They advertise it for rent at a market rate of up to $1,040 a week. They have a real estate agent advertise it for rent during the year and communicate regularly to ensure the property is being managed.

Shahani and Marvin arrange with the agent for their friends, Katrina and Greg, to stay at the property for one week at a nominal rent of $600, and for a cousin, Gerard, to stay for another week for $600. They also use the property themselves for 4 weeks during the year.

During the year, Shahani and Marvin’s expenses for the property are $29,184. This includes agent commission and advertising of $1,755. It also includes interest on the funds borrowed to purchase the holiday home, property insurance, maintenance costs, council rates, the decline in value of depreciating assets and capital works deductions.

Shahani and Marvin receive $46,960 from renting out the property during the year. This includes the $1,200 they receive from Katrina, Greg and Gerard.

Shahani and Marvin can’t claim a deduction for the 4 weeks they use the property themselves.

Shahani and Marvin can claim a deduction for their expenses based on the proportion of the income year the property is rented out or is genuinely available for rent at market rates:

• (46 ÷ 52 weeks) × $29,184 + $1,755 = $27,572.

Shahani and Marvin’s deductions for the 2 weeks Katrina, Greg and Gerard rented their property are not affected because the rent received ($1,200) is more than their expenses for that period of $1,122 ((2 ÷ 52) × $29,184).

Shahani and Marvin’s rental income and deductions for the year are as follows:

• rent received = $46,960
• rental expenses $27,572 + $1,122 = $28,694
• net rental income $46,960 − $28,694 = $18,266.

As they are joint owners, Shahani and Marvin declare net rental income of $9,133 each in their tax returns.

Shahani and Marvin need to keep records of their expenses. If they make a capital gain when they sell the property, the expenses (interest, insurance, maintenance costs and council rates) they can’t claim as a rental deduction relating to their own occupation of the property are taken into account in working out their capital gain.

Source: ATO

The post Holiday Homes appeared first on Mark Accountants.

What are mistakes or adjustments

Correcting a mistake made in an earlier business activity statement (BAS) is different to making an adjustment:

• An error or mistake relates to an amount that was incorrect at the time of lodgment.
• An adjustment relates to a reported sale or purchase that was correct at the time of lodgment, but something occurred later that changed the amount of reported GST.

When to fix a mistake

Examples of mistakes you may have made in a previously lodged BAS include:

• clerical or transposition errors
• classifying a GST-free sale or purchase as taxable
• classifying a taxable sale or purchase as GST-free
• double counting some of your purchases.

How to fix a mistake

You can fix a mistake in your next BAS or revise the original BAS. Conditions apply depending on whether it’s a credit error or debit error.

Many mistakes relating to GST and fuel tax credits can be corrected in your next BAS. If you can’t correct your mistake in your next BAS, you will need to lodge a revision.

Corrections that impact PAYG withholding

If you are an employer and you need to fix your STP reporting, you may also identify that the PAYG withholding you reported to us for a previous tax period was too high or too low. To correct this, you can either:

• Revise an earlier activity statement for the earlier tax period to show the correct amount. For large withholders, follow the existing process for notifying us of changes to your PAYG withholding liability in an earlier tax period.
• Carry forward the correction to your reported PAYG withholding for the current tax period, subject to some limits. See Correcting information reported through STP.

When to make an adjustment

When you become aware of the need for an adjustment, you generally report it in the activity statement for your current reporting period.

Examples of when to make an adjustment include where:

• the price of a sale or purchase changes
• goods are returned and the sale is cancelled.

For fuel tax credits, see Making adjustments and correcting errors.

How to lodge your changes

You can lodge your changes online or by paper form:

• Businesses can use
  • Online services for business
  • Standard Business Reporting (SBR)-enabled software
• Sole traders can use
  • Online services for business
  • Standard Business Reporting (SBR)-enabled software
  • Online services for individuals (you will need a myGov account linked to the ATO).
• If you lodge by paper and need a revision form, you can phone us on 13 28 66.

Your registered tax or BAS agent can assist via Online services for agents.

Source: ATO

The post Fixing BAS Mistakes or Making Adjustments appeared first on Mark Accountants.

About client-to-agent linking steps

Businesses can use the ATO’s online services to nominate an agent. These steps are for clients who need to nominate an agent.

You only need to do this when you:

• engage a new tax or BAS agent, or payroll service provider to represent you
• provide extra authorisation to your existing authorised agent (for example, they start representing you for a new obligation, such as income tax or a new entity in your group.)

Contact the ATO or your registered agent if you need guidance. Your agent can assist you, but they cannot complete the process for you.

Print these instructions

You can print these instructions directly from your web browser. Use the print icon on the top right of your screen and select Print this page.

You can also download this guide: Client agent linking steps (PDF, 203KB)

Do you have access to Online services for business?

• Yes – Go to step 3.
• No – Go to step 1.

Before you start Step 1 & 2

To complete step 1-2 you must be the principal authority.

This is the person responsible for the business and must be the first person to set up access to Online services for business. If you’re not sure what role you have, see Get started.

Step 1: Set up your Digital ID (myGovID)

Download the myGovID app, available from the App Store or Google and follow these instructions on how to set up your myGovID.

Choose your identity strength:

• A Strong myGovID – by verifying your Australian passport and either birth certificate, citizenship certificate, driver licence or Medicare card.
• A Standard myGovID – by verifying 2 Australian identity documents. With a Standard myGovID you will need to contact the ATO to complete Step 2.

Note: myGovID is unique to you, using your personal information – you cannot share it with others.

Step 2: Link your myGovID to your ABN

You’ll need to link your myGovID to your Australian business number (ABN) using Relationship Authorisation Manager (RAM).

If you have a Strong myGovID go to RAM and log in. Select Link your business and follow the prompts.

You’ll need to contact the ATO to complete this step if you: 

• have a Standard myGovID
• are a primary person – this is a type of principal authority who’s not listed as an individual associate in the Australian Business Register. For example, the authorised contact of a government entity.

For more information, see How to link your business online.

Step 3: Log in to Online services for business

Use your myGovID to log in to Online services for business.

Step 4: Nominate your authorised agent in Online services for business

To complete this step you’ll need your agent’s (or payroll service provider’s) registered agent number.

From the Online services for business home page:

• select Profile, then Agent details
• at the Agent nominations feature, select Add
• on the Nominate agent screen, go to Search for agent
• type your agent’s (or payroll service provider’s) registered agent number and select Search
• select the agent you want to nominate
• check that the agent’s details are correct
• complete the Declaration
• select Submit.

You’ll now see your agent’s details listed under Agent nominations.

For more information, go to Agent nomination.

Step 5: Let your agent know you have nominated them

The agent you nominate won’t receive an automated system notification. It’s important to let them know when you’ve completed the nomination step.

Your agent has 28 days to action the nomination before it expires.

Extending a nomination

If the agent you’ve nominated needs more time to add you as a client, you can use the Extend feature. This will add another 28 days to your nomination from the day you extend.

The Extend feature will become available the day after submitting a nomination. It will remain available to select anytime during the 28 calendar days of the original nomination period.

To extend a nomination:

• from the Agent nomination screen in Online Services for Business, select Extend. Tip: You can find this next to your agent’s name.
• at the Extend agent nomination screen, check the details of the agent are correct. If they are not correct, you can delete an agent nomination by selecting Delete.
• complete the declaration and select Submit
• let your agent know when you have completed the extension.

If a nomination has expired, you won’t be able to extend it. You’ll need to submit a new nomination.

Source: ATO

The post Client-to-Agent Linking Steps appeared first on Mark Accountants.

There are people promoting early access schemes which are illegal and could cost you more than your retirement savings. Be on the lookout for dodgy advice, don’t take up any offers without first checking if they are legal and learn how to spot the warning signs.

If you have been approached by anyone telling you that you can withdraw your super early (without meeting a condition of release) you need to: 

• stop any involvement with the scheme, organisation or the person who approached you 
• not sign any documents 
• not provide them with any of your personal details. 

You should also report any interaction you may have had with a promoter to us as soon as possible.

If you illegally access your super early, you can lose your retirement savings, pay extra tax, penalties and interest, and be disqualified from being an SMSF trustee. Disqualified trustees names are published online.

If you have been involved in a scheme, contact us immediately. We will take your voluntary disclosure and circumstances into account when determining any penalties.

Source: ATO

The post Beware of SMSF Promoter Schemes appeared first on Mark Accountants.

Claiming an exemption

You can claim a full exemption for any period that you:

• have a Medicare Entitlement statement showing you were not entitled to Medicare benefits because you were a temporary resident for Medicare purposes, and either
  • you did not have any dependants for that period
  • all your dependants (including your spouse) were also in a Medicare levy exemption category for that period
• are a member of a diplomatic mission or consular post in Australia and meet other conditions.

If you qualify for an exemption, you claim the exemption through your tax return. This exemption is known as exemption category 3 on your tax return when you complete the Medicare levy section.

Medicare Entitlement Statement

A Medicare Entitlement Statement (MES) from Services Australia shows the period in an income year that you were not entitled to Medicare benefits. If you have an MES, it doesn’t automatically mean you are exempt from the Medicare levy. All your dependants are also required to be in a Medicare levy exemption category.

2023 MES processing delay

Services Australia is experiencing processing delays for all 2023 MES applications. If you have applied, it may not be processed before the due date to lodge your tax return – which is 31 October 2023 for self-preparers.

We are unable to advise when your MES application will be processed.

To ensure you are not disadvantaged by the delay, make sure you have applied for your MES and lodge your tax return by the due date.

If you apply for a 2023 MES before 17 March 2024 but have not received it at the time you’re lodging your tax return, you can still complete the Medicare levy exemption question as though you have your statement.

Once you receive a response from Services Australia, if:

• the statement matches what you lodged in your tax return, there is nothing more you need to do
• your application is not successful or is different to what you lodged in your return, you must amend your tax return as soon as possible.

If you apply for a 2023 MES on or after 17 March 2024, you will need to have received your statement before you can lodge your tax return.

Applying for an MES and lodging your tax return

1. Apply for a Medicare Entitlement Statement. Even if you have received the exemption before, it doesn’t mean you’ll get it every year. You need to apply for an MES as soon as possible so that you can lodge your tax return correctly and on time.
2. Wait to receive your MES before lodging your tax return. It can take up to 8 weeks for your application to be processed and for you to receive your MES from Services Australia.
3. Lodge your tax return once you have received your MES. We will work out if you are exempt from paying the Medicare levy when we assess your tax return.

Example: Don’t have to pay the Medicare levy

In 2022–23, Priya was on a Temporary Skill Shortage visa (subclass 482) and had no dependants. Priya wasn’t entitled to Medicare benefits and wants to claim an exemption from paying the Medicare levy.

Priya needs a Medicare Entitlement Statement (MES) to show she wasn’t entitled to Medicare benefits in 2022–23 before completing her 2022–23 tax return.

Priya applies to Services Australia for a MES. It takes up to 8 weeks to receive the MES from Services Australia.

Priya receives the MES stating she was not entitled to Medicare benefits for the full year, from 1 July 2022 to 30 June 2023. Priya keeps a copy of the MES for her records.

Priya can claim a full Medicare levy exemption for the full year as she has a MES for the period 1 July 2022 to 30 June 2023 and she doesn’t have any dependants.

If Priya completes her tax return using myTax, she enters ‘365’ as the number of days she qualified for the Full 2% levy exemption and answers ‘Yes’ to the question ‘Were you a temporary resident for Medicare purposes and have a Medicare entitlement statement from Services Australia?’End of example

Example: Have to pay the Medicare levy

In 2022–23, Jed was on a Temporary Skill Shortage visa (subclass 482) and had a spouse for the full year. Jed wasn’t entitled to Medicare benefits and wants to claim an exemption from paying the Medicare levy. Jed’s spouse was entitled to Medicare benefits in 2022–23.

Jed applied and received a Medicare Entitlement Statement (MES) showing he wasn’t entitled to Medicare benefits for the full year, from 1 July 2022 to 30 June 2023.

Even though Jed has a MES and wasn’t entitled to Medicare benefits, Jed can’t claim the exemption. This is because his spouse was entitled to Medicare benefits and therefore is not in a Medicare levy exemption category. End of example

Member of a diplomatic mission or consular post in Australia

You do not have to pay the Medicare levy if you are a member of a diplomatic mission or consular post in Australia (or a member of such a person’s family and you were living with them) and:

• were not an Australian citizen, and
• do not ordinarily live in Australia, and
  • you did not have any dependants for that period, or
  • all your dependants (including your spouse) were in a Medicare levy exemption category for that period.

Source: ATO

The post Not Entitled to Medicare Benefits appeared first on Mark Accountants.

It’s important to remember SMSF trustees cannot loan money or provide other forms of financial assistance to a member or relative. If they do, they can incur a penalty of up to $18,780. They may also be disqualified as a trustee which means their name is published online and they can no longer operate their fund or another self-managed super fund in the future.

An SMSF trustee also cannot loan money to a related party such as a business where the value of the loan exceeds 5% of the value of the fund’s total assets. This is a prohibited in-house asset investment which is a contravention.

If the SMSF’s in-house assets exceed 5% of the total value of its assets at the end of the financial year, the trustee must prepare a plan to reduce their in-house assets to less than 5%. The plan must be prepared and implemented by the end of the following financial year and failure to do so will result in a contravention.

It is important you understand the rules to avoid making prohibited loans from your SMSF.

If you have made a prohibited loan from your SMSF it must be rectified as soon as possible by ensuring the loan is repaid. You should contact your appointed SMSF professionals to help.

If you can’t rectify the breach, you should use our SMSF early engagement and voluntary disclosure service to engage with us early. If you do this before we start an audit and take compliance action, we take your disclosure into account in determining what other actions we need to take.

How we deal with non-compliance has information on the types of compliance action we might take where we see breaches of the super laws.

You can also visit restrictions on investments to see the different types of contraventions.

Source: ATO

The post Prohibited SMSF Loans appeared first on Mark Accountants.