ATO LAUNCHES ITS SMALL BUSINESS FOCUS AREAS FOR 2025

As many of us in the local Grampians region and across Australia have faced another challenging summer, the impact of fires, unpredictable weather, and natural disasters has been deeply felt. From devastating bushfires in our own backyard to floods in other areas of the country, these events can turn lives and communities upside down. Being prepared for the unexpected has never been more important. While you’re focused on rebuilding and recovery, tax may be the last thing on your mind, but understanding the implications of assistance payments and insurance payouts can help you make informed decisions.

For financial support for the recent Western Victoria Bushfires or Queensland floods, see Services Australia website for information on the Disaster Recovery Allowance. Those affected have 6 months to make a claim and need to meet eligibility criteria, available at https://www.servicesaustralia.gov.au/who-can-get-bushfires-western-vic-dec-2024-disaster-recovery-allowance?context=80302

When you receive an insurance payout after a disaster, whether it's taxable depends on the type of asset involved:

Business assets: For business owners, insurance payouts for damaged or destroyed business assets (like equipment or inventory) are usually taxable and need to be reported as income.

Personal assets: Payouts for personal items like household goods, furniture and private vehicles are generally not taxable.

Rental properties and income-producing assets: If the insurance payout relates to a property used to produce income, it may have tax implications. For instance, if part of your home was used for a business, such as a home office, the insurance payout might affect your capital gains tax (CGT) calculations.

Your home: If the insurance payout is for your main residence, it's generally not taxable.

If you're planning to repair or rebuild your home, or if you decide to sell your property after a disaster, here’s what you need to know:

Main residence CGT exemption: If you rebuild your home, move back in as soon as practicable and live there for at least three months before selling, the property can remain exempt from CGT. This exemption also applies if you sell the land without rebuilding, provided the destroyed property was your main residence before the disaster.

Engaging contractors: It's important to ensure that any builders or contractors you hire are licensed and genuine. Check their Australian Business Number (ABN) and request written quotes and contracts to protect your rights.

Reminder: it’s important to check with Services Australia or a tax professional to understand how any assistance payments you receive may impact your financial situation. Staying informed about tax implications can help you navigate the recovery process with confidence and ensure you meet any reporting obligations.

And remember, we are here to help! Call us on 03 5571 0111 if you need assistance.

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Superannuation Rate Increase – What Employers Need to Know

By Cogger Gurry • February 13, 2025

A quick reminder for all employers: the Superannuation Guarantee (SG) rate is set to increase. Currently, you’re required to contribute 11.5% of your employees' ordinary time earnings (OTE) to their super. However, from 1 July 2025 , this will rise to 12% . Super contributions must be paid at least quarterly to eligible employees, so now is the time to plan for this change and ensure your payroll systems are updated. Stay ahead of the update and keep your business compliant. Did you know we also offer Bookkeeping and Payroll Support ? Call us today to discuss how we can help 03 5571 0111

HOW TAX WORKS IN AUSTRALIA’S SUPERANNUATION SYSTEM

By Cogger Gurry • February 13, 2025

Staying on top of the ATO’s focus areas for 2025 will help your business stay compliant and avoid unnecessary stress. The ATO has highlighted key areas where businesses often make mistakes, so you can take proactive steps to manage your tax responsibilities. Keep Business and Personal Finances Separate Your business’s money and assets should not be treated as your personal funds. Using company money for personal expenses without proper documentation can lead to issues with the ATO. If you take money from your business, it may be treated as a loan that needs to be properly recorded and repaid with interest. If not managed correctly, this can result in unexpected tax bills or penalties. Claim Deductions and Concessions Correctly Many small businesses make mistakes when claiming tax deductions and concessions. The ATO is paying close attention to how businesses apply for small business capital gains tax (CGT) concessions and report business losses. If you’re claiming a deduction, ensure you meet all the requirements to avoid having to pay back incorrectly claimed amounts or facing penalties. Follow the Tax Rules The ATO is cracking down on businesses that under-report income, over-claim expenses, or use business funds for personal spending. Poor record-keeping and cash flow management can also raise red flags. Good financial habits will help you stay compliant and avoid unnecessary scrutiny. For more information from the ATO, read the full details here

RECOVERING FROM A NATURAL DISASTER: WHAT YOU NEED TO KNOW ABOUT TAX

By Cogger Gurry • February 13, 2025

Scams via email and SMS are on the rise, and what’s more concerning is how convincing they’ve become. In our industry, many of these scams come in the form of messages purporting to be the ATO and seeking additional information from you as a taxpayer. Here are key things to remember if you receive a suspicious email or SMS: Watch out for messages with links that prompt you to log in to government services like myGov/myID. The ATO has recently stopped including hyperlinks in unsolicited SMS messages. So, if you receive a message claiming to be from the ATO but it contains a link, it’s almost certainly a scam. Always access ATO services directly by typing the web address yourself: ato.gov.au or my.gov.au, or via the ATO app. Be cautious of emails asking for personal or financial information , especially if they claim to be urgent. The ATO will never request sensitive information such as passwords, account numbers, or personal details via email, SMS, or unsolicited phone calls. Be wary of downloading attachments or clicking on links in emails, as they may contain malware that can steal your personal information. If you’re ever in doubt, contact our office on 03 5571 0111. As your tax agent, we can verify whether any communication you’ve received from the ATO is legitimate and advise you if you think your security has been compromised.