Bray and Associates

April, 2018

Work Related Car Expenses

You may be able to claim an income tax deduction for work related car expenses if you use your own car in the course of performing your job as an employee (e.g. carrying bulky tools and equipment, attending conferences, collecting supplies etc.).

The methods available to use in calculating this deduction are as follows:

• Cents per kilometre method – using this method, your claim is based on a rate of 66 cents per kilometre travelled for business (up to a maximum of 5,000 business kilometres). You don't need written evidence of your business kilometres (such as a logbook) however you need to be able to demonstrate how you have calculated the number of business kilometres travelled. For example, producing diary records of work-related trips.


• Logbook method – using this method, your claim is based on the business-use percentage of the expenses for the car. Expenses include running costs (fuel, servicing, insurance & registration) and the decline in value of your car. In order to work out your business-use percentage, you need a logbook and the odometer readings for the logbook period (a minimum of 12 consecutive weeks).

You are allowed to choose whichever method gives you the best result and can change between methods each financial year – however, we are only able to assess which method is best for you with the appropriate records/information. If your work-related travel is substantial and your private use of the vehicle is limited, it may be beneficial to establish your business-use percentage via the use of a logbook so that we can ascertain which method is best for you come tax time.

For more information on maintaining a logbook specific to your circumstances, please call your usual contact at our Bowral and Sydney offices.

March, 2018

What is an "Exempt Vehicle" for Fringe Benefits Tax (FBT) Purposes?

A liability for Fringe Benefits Tax (FBT) arises where a motor vehicle is provided by an employer to an employee for private use OR is available for the private use of an employee.

For example; where the vehicle is garaged at or near the employee's place of residence overnight and on weekends and the vehicle is in the employee's custody or control.

There are however, exemptions for commercial vehicles (taxis, panel vans, utilities or other commercial vehicles not principally designed to carry passengers) provided the employee uses the vehicle for work purposes, for travel between home and work and back again, and any other private use is minor, irregular and infrequent.

The ATO have released a general guideline of what they consider to be acceptable private use of a vehicle by an employee for this purpose.

Private use will be seen as minor, infrequent and irregular where the employee uses the vehicle to travel:

• Between their home and work, and any diversion adds no more than two kilometres to the ordinary length of that trip;
• No more than 750km in total for each FBT year for multiple journeys taken for a wholly private purpose; and
• No single, return journey for a wholly private purpose exceeds 200km.

The above information is general in nature. If you would like advice specific to your circumstances, please discuss this matter with your usual contact at our Bowral or Sydney offices.

October, 2016

Renting out a room is income / the sharing economy and tax

Money your clients earn from renting out a room in their house is rental income. This applies to rooms rented by traditional means or through a sharing economy website or app.

Your client can only claim expenses related to the part of the house they rent out and you need to apportion the expenses accordingly. However, they can claim 100% of any fees or commissions charged by the rental facilitator or administrator.

You can show your clients our examples to help them understand how claiming deductions works when renting rooms, or their main residence on an occasional basis.

Capital gains tax may also apply if they sell property used to generate rental income.

Also see:
* The sharing economy and tax
* Residential rental properties

September, 2016

Changes to Claiming Your Car Expenses

Do you use your car for work or business purposes?

Do you travel more than 5,000 kilometres per year for a work or business related purpose?

If so, we would recommend that you keep a 12 week log book of how you use your car (in the approved from – contact us if you need details) and also keep all the records of your car expenses.

This will give you two options when it comes to claiming tax deductions for your car - cents per kilometres method or the log book method – and you can choose the one that gives you the best deduction.

The previously available methods of estimating your deductible car expenses (one-third of you car expenses and 12% of the cost of your car) are no longer available.

August, 2016

Get Ready For SuperStream

The ATO is advising that, if you make super contributions for employees, you need to get ready for SuperStream.

"SuperStream is an easier and faster way for all employers to make contributions online. Super gets into your employees' accounts faster too."

Businesses with 20 or more employees should already be using SuperStream.

Businesses with 19 or fewer employees have been allowed until 28 October 2016 to get SuperStream ready.

If you require further information regarding SuperStream please contact us or check out the publications available on the ATOassist website.

August, 2016

Tax time is prime time for scams

The ATO is reminding Australians to be on the lookout for tax-related scams during tax time.

From January to May this year, the ATO has received over 40,500 phone scam reports. Of these, 226 Australians handed over $1.2 million to fraudsters and over 1,900 gave out some form of personal information, including tax file numbers.

" Beware of tax scams. Never pay an alleged tax debt without first talking to us. "

August, 2016

Buying or Selling Real Estate – The Rules Have Changed!

Whether you are the buyer or the seller, if you are a party to a property sale and the sale price is $2 million or more, you need to know about these changes that come into effect on 1 July 2016.

If you are the buyer :

• you need to ask the seller for their clearance certificate from the ATO. If they do not produce this certificate, you must withhold 10% of the purchase price and remit it to the ATO before the date of settlement;
• you will need to ensure that the sale contract allows you to withhold this amount if the clearance certificate is not produced; and
• if you fail to withhold when you should have, the penalty is also 10% of the purchase price (you may or may not be able to recover this from the seller).

If you are the seller :

• you must apply to the ATO for a clearance certificate and provide it to the buyer;
• we would recommend that you apply for the clearance certificate as soon as you decide to sell your property, as the certificate is valid for twelve months, but may take four weeks or more to issue from the ATO;
• if you do not produce the clearance certificate, the purchaser is obliged to withhold 10% of the purchase price. This will not be credited back to you until you lodge your Income Tax Return.

July, 2016

Bray & Associates appointed as a corporate authorised representative of the
SMSF Advisers Network

From 1 July 2016, advice about superannuation must be provided through an Australian Financial Services Licence.

In order to provide licensed advice to our clients, Bray and Associates Pty Ltd has chosen to be authorised through the SMSF Advisers Network Pty Ltd (ABN 64 155 907 681 AFSL No. 430062) – the Australian Financial Services Licence of the National Tax and Accountants' Association Ltd. (NTAA).

The SMSF Advisers Network licence supports our practice in providing advice on:

• Establishment of SMSFs
• Contribution strategies (amounts, types, withdrawal and recontribution)
• Pension strategies (account based and transition to retirement)
• Transfer of business real property into superannuation
• Withdrawals, commutations and death benefit payments
• Limited Recourse Borrowing Arrangements
• Provision of an asset class investment strategy (based on an assessment of your risk profile)
• Winding up of SMSFs

The person at this practice authorised by the SMSF Advisers Network to provide superannuation advice is Fiona Chung.

Authorised Representative – click here to view Financial Services Guide

If you have any questions in relation to your superannuation arrangements, please make an appointment to
speak to Fiona Chung.

The SMSF Advisers Network Pty Ltd is an Australian Financial Services Licensee, licence number 430062, and is a fully owned subsidiary of the NTAA.

The NTAA has been a leading provider of education for accountants for over 20 years, delivering specialist knowledge in taxation issues and Self Managed Superannuation Funds. Our practice is pleased to be a member of this association, and benefits from the education they provide.

July, 2016

ATO Takes Data Matching to the Next Level

The ATO have for a number of years now been using "data matching" as a compliance tool. The ATO receives information about interest earned on accounts, dividends, trust distributions, sales of listed shares etc and uses this information to ensure that taxpayers are reporting the correct amounts of assessable income in their Income Tax Returns.

The ATO have recently announced that they will be taking their data matching activities to the next level – they will be asking insurance companies for details of policies insuring "lifestyle assets" like marine vessels, enthusiast motor vehicles, thoroughbred horses, fine art and aircraft. They will then use the details of these policies to assist with profiling (providing the ATO with a holistic view of a taxpayer's wealth) and to help identify potential tax compliance issues or assets that may be available to meet tax debts.

June, 2016

Did you know you can pay your company's ASIC annual fees ten years in advance?

ASIC annual review fees are going up from 1 July 2016 – from $246 to $249 for Pty Ltd companies and from $46 to $47 for special purpose companies.

Late payment fees will also go up from 1 July 2016 – from $75 to $76 for the first month overdue and from $312 to $316 if payment is received more than one month after the due date.

You can save on your ASIC annual review fees by paying ten years in advance – after 1 July 2016, a ten year prepayment of annual review fees for a Pty Limited company will cost $1,871 (as opposed to ten x $249 = $2,490). Or $352 for a special purpose company (as opposed to ten x $47 = $470).

The other advantage of paying ten years in advance is no risk of late payment penalties and protection from future fee increases (at least for the next ten years).

This option is not available for online payments – it must be paid by cheque with a paper remittance advice. So when it comes time to pay your company's annual review fees, mail your cheque back to us or ask us for the prepayment remittance advice. Please allow enough time for us to mail to the ASIC before the original payment date.