Ownership of cryptocurrency has been on the increase in Australia for a number of years now. But many people are confused about what impact this has from a tax perspective. The tax implications of digital currencies can be complex so we’re going to take a look at crypto tax in Australia if you’re an investor, not a trader. If you’ve considered investing in it, we’ll also explore under what circumstances Capital Gains Tax (CGT) is payable along with other potential tax consequences of owning cryptocurrency. Do you have to pay tax on cryptocurrency in Australia? Let’s take a look…

What Is Cryptocurrency?

Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. It operates on a technology called blockchain, which is a decentralised and distributed ledger that records all transactions across a network of computers. Unlike traditional currencies issued by governments (such as the Australian Dollar), cryptocurrencies are typically not controlled by any central authority, like a central bank. Bitcoin, Ethereum, and Ripple are some well-known examples of cryptocurrencies.

In Australia, cryptocurrency regulation has evolved over the years, and it’s important to note that regulations can change, so it’s essential to stay updated with the latest developments.

How Is Crypto Taxed In Australia?

The Australian Taxation Office (ATO) treats cryptocurrency as property for tax purposes. This means that individuals and businesses are required to pay capital gains tax on cryptocurrency transactions, depending on the profits they make.

When you sell a cryptocurrency asset you need to work out whether you made a capital gain (i.e. you made a profit) or a capital loss (i.e. you lost money) to determine how much capital gains tax (CGT) you’re required to pay. You need to report your gains and losses in your Income Tax Return and pay income tax on net gains.

Crypto disposal is considered a ‘CGT Event’ by the ATO however ‘disposal’ doesn’t simply mean sale of your cryptocurrency. It also includes:

• gifting a crypto asset
• trading, exchanging or swapping one crypto asset for another
• converting a crypto asset to Australian or foreign currency
• buying goods or services with a crypto asset.

Cryptocurrency transactions are also subject to goods and services tax (GST) in some cases.

If you receive cryptocurrency as payment for goods or services, it’s considered part of your taxable income and should be declared on your tax return at its Australian dollar value at the time you receive it.

Crypto-to-crypto trades are also taxable events. It’s important to understand that when you trade one cryptocurrency for another, it is considered a disposal for tax purposes, and any capital gain or loss needs to be reported.

Mining cryptocurrency is also considered a taxable activity, and the mined coins are subject to taxation.

However, the ATO views cryptocurrency used for personal use (e.g. buying a product), sometimes referred to as Personal Use Assets differently than cryptocurrency kept as an investment. These distinctions can greatly affect tax obligations. We cover this in more detail below.

Can The ATO Track Crypto Trades or Exchanges?

The ATO now has sophisticated data matching techniques in place for Cryptocurrency trades or exchanges. It’s likely that they already have your information if you have an account with an Australian Designated Service Provider (DSP) as they have access to the Know Your Customer information supplied when you signed up for an Australian exchange or wallet.

In addition, the ATO has specific guidance and tools for cryptocurrency tax reporting, including the use of cryptocurrency tax software.

It’s vital to understand that attempting to avoid or evade cryptocurrency taxes in Australia is illegal and can lead to penalties and fines.

How To Avoid Tax On Cryptocurrency in Australia

It’s important to recognise that you cannot avoid paying tax on crypto currency in Australia however there are some measures that you can take to reduce the tax payable. You have to declare crypto in your tax return if you have sold, traded or earned it in the past financial year.

However, one of the ways to potentially reduce your CGT tax liability is to hold on to your investments for more than 12 months before selling. You may then be eligible for a 50% discount on the CGT tax payable.

In addition there is the Personal Use Asset exemption. Cryptocurrency is considered a personal use asset if you keep or use it mainly for personal use and it was purchased for less than $10,000. The most common situation of personal use of crypto assets is to buy items for personal use or consumption. If the crypto is considered a personal use asset, a capital gain / loss can be avoided.

One of the key considerations for determining whether your cryptocurrency is a personal use asset is the length of time you keep hold of it before using it to buy something. The longer you keep hold of it, the less likely it is to be considered a personal use asset. While the guidance is a little vague, some examples provided by the ATO indicate that if transactions take place within a 2 week period then they may be considered as personal use assets.

However, crypto assets are not personal use assets when you keep or use them:

• as an investment
• in a profit-making scheme
• in carrying on a business.

Finally, donating crypto to a registered charity is also one of the few times that it is not taxable.

Can You Claim Crypto Losses on Taxes In Australia?

You can claim capital losses on cryptocurrency investments to offset capital gains. If you sell cryptocurrency at a loss, you can use this loss to reduce your overall tax liability. Capital losses can’t, however, be used to offset income.

It’s fair to say that crypto tax in Australia is complex. That’s why it pays to get advice from accounting experts. It’s crucial to maintain accurate records of all your cryptocurrency transactions, including purchase/sale dates, amounts, and the parties involved. This information is necessary for tax reporting. It’s advisable to report all cryptocurrency transactions accurately and seek professional tax advice to ensure compliance with tax laws.

What is the Small Business Technology Investment Boost?

The Small Business Technology Investment Boost by the ATO, is a tax incentive program designed to provide financial support to small businesses seeking to invest in technology to improve their operations and productivity. The scheme allows eligible businesses to claim an additional 20% tax deduction for technology-based expenses up to a threshold.

Eligibility For The Technology Investment Boost

For an entity to be eligible for the boost it must be “carrying on a business” with an aggregated annual turnover of less than $50 million. The boost can apply to sole traders, partnerships, companies, and trusts.

Business expenses that have a close connection with the entity’s digital operations or digitising its operations are eligible for the bonus deduction. As the legislation is very broad in its definition a large variety of expenses may be eligible.

Eligible Period

• Eligible Expenditure must be incurred between 7:30pm AEDT 29 March 2022 and 30 June 2023.
• If the expenditure is on a depreciating asset, the asset must be first used or installed ready for use for taxable purpose by 30 June 2023.

Eligible Expenditure

• Digital Enabling Items – computer and telecommunications hardware and equipment, software (such as Xero or MYOB subscriptions), internet costs, systems and services that form and facilitate the use of computer networks.
• Digital Media & Marketing – audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design.
• E-Commerce – goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth.
• Cyber Security – cyber security systems, backup management and monitoring services.

Depreciating Assets

• Expenses eligible for the boost can also apply to depreciation on assets that relate to digital operations, such as computer equipment.
• Many small businesses have been utilising Temporary Full Expensing depreciation rules over the last few years, allowing them to immediately claim full depreciation on assets. As such, many of the assets purchased before the boost started (29 March 2022) will not be eligible for the bonus deduction as they have already been fully depreciated. However, Temporary Full Expensing will also allow for eligible new assets purchased and “ready for use” during the boost’s eligible period to be immediately depreciated and the bonus boost deduction to be calculated on the full depreciable value.

What You Can’t Claim As Part of the Technology Investment Boost

• Salary & Wages
• Phone Expenses
• Capital Works Costs
• Financing Costs
• Training or Education Costs (they may be eligible for the Small Business Skills and Training Boost)
• Expenses that form part of your trading stock costs

How to Claim The Tax Deduction

The bonus deduction for the boost will be taken up by us as a tax adjustment when we prepare the 2023 Income Tax Returns. The 2023 Income Tax Returns will include the tax adjustment for eligible expenses incurred during the 2023 financial year, as well as eligible expenses incurred during the eligible period within the 2022 financial year (29 March 2022 to 30 June 2022).

The boost is capped at $100,000 of expenditure per income year, resulting in a bonus deduction of $20,000. Therefore, since the eligible period covers one full financial year (2023) and part of another financial year (2022), the total bonus deduction claimable is $40,000.

What You Need to Do

• If we have already prepared your 2023 Tax Return, we have already included the boost in your returns if you are eligible.
• Ensure expense information provided to us has sufficient details so we can identify what they relate to. Where possible also attach tax invoices in your bookkeeping software.
• Ensure single payments for multiple goods and services that include eligible and non-eligible expenses are recorded as separate amounts.
• Separate out internet costs from phone costs so the internet can be included in the boost.
• Separate out any private portion of expenditure, in particular technology expenses.
• Email or call your MGI contact if you have any questions.

FAQ’s about the Small Business Technology Investment Boost

• Does the boost only apply to new technologies, or also existing technologies?
  Although the scheme is focused on incentivising businesses to adopt new technologies, the legislation does not exclude existing technologies.
• Are social media advertising expenses eligible?
  While ATO guidance isn’t particularly clear on this area, we believe this expenditure falls under the grouping of Digital Media & Marketing and would be eligible for the boost assuming the advertising has a direct link to the business’ digital operations.
• What if I started digitalising my business before the boosts eligible period?
  The boost exclusively looks at the date the expenditure has been incurred. Therefore, on-going monthly digital expenses paid during the eligible period would qualify, but any prior expenditure would not. However, if the prior expenditure related to depreciable assets the expenditure may still be eligible depending on the depreciation method.

For further details on the Small Business Technology Investment Boost please click on this Australian Tax Office link.

Please contact the team at MGI if you have any questions or require further information.

With it being tax time, be wary of fraudsters

The Australian Taxation Office (ATO) has estimated more than $800 million of fraudulent refund claims have been made, with fraudsters relying on the self-assessment process in the BAS lodgement system to claim and be paid for false GST refunds, all before the fraudulent return is picked up by the ATO.

The attempted fraud involves an individual, often with stolen ID:

• inventing a fake business
• lodging a fraudulent Australian business number (ABN) application, and
• submitting fictitious business activity statements (BAS) to attempt to gain a false GST refund

As part of this increased scrutiny and investigation, the ATO has introduced protocols to closely review all GST refund claims, both legitimate and false, and are putting extra controls in place, such as reviewing bank accounts and requesting further information on specific BAS statement items, to ensure the legitimacy of the claims being made.

For businesses that may rely on the GST refund claim coming in to purchase goods, pay other bills or otherwise be reliant on the cash flow for business purposes, this fraud activity is understandably causing some concern.

If you are concerned about a potential impact on your cashflow or see anything suspicious that may indicate GST refund fraud, please reach out to the MGI team.

The ATO has recently indicated its intention to more closely focus on those involved in the sharing economy. The introduction of the Sharing Economy Reporting Regime from July 1st, means that digital platforms involved in short term accommodation or taxi travel are required to provide the ATO with details of seller transactions. With so many Australians now involved in these services, it’s vital that you understand sharing economy tax requirements. So if you operate an Airbnb or provide ridesharing services, there are a few key things you should pay attention to.

What Is The Sharing Economy?

The sharing economy refers to a business model where individuals or businesses share their resources, skills, or services with others through digital platforms. Examples of the sharing economy in Australia include:

1. Renting out all or part of your property to guests through platforms such as Airbnb or Stayz.
2. Providing ridesharing services to passengers using your own vehicle through platforms such as Uber, Ola, Didi or Sheba.
3. Offering various services or tasks to other users for a fee, including creative or professional services such as graphic design through platforms such as Airtasker or Fiverr.

Sharing Economy Tax Implications

The platforms through which you provide sharing economy services may ask you for more information to meet their obligations under the Sharing Economy Reporting Regime (SERR) including:

• ABN and business trading name
• your full name
• date of birth
• residential or business address
• email address and telephone numbers
• bank account details.

Tax Implications For Individuals Engaged In The Sharing Economy:

1. Goods and Services Tax (GST): If you are registered or required to be registered for GST and your annual turnover from the sharing economy exceeds the GST threshold (as at August 2023, the threshold is $75,000), you need to account for and remit GST on your services or sales. However, the GST registration threshold may change over time, so it’s essential to check the current threshold with the ATO.

2. Income Tax: Any income earned from sharing economy activities is generally considered assessable income for tax purposes. This means you must report your earnings from platforms like Airbnb, Uber, or Airtasker in your annual income tax return. Keep records of your earnings and expenses related to the sharing economy activities to accurately report your income.

3. Capital Gains Tax: If you rent out all or part of your home, you will no longer be able to claim the full capital gains tax (CGT) main residence exemption. Instead, you’ll pay capital gains tax on the sale proceeds according to the portion of the property that you have rented out.

Potential Tax Deductions For Sharing Economy Participants:

As a participant in the sharing economy, you may be eligible for tax deductions on expenses related to your business activities. Common deductions may include:

1. Vehicle expenses: If you use your vehicle for ride-sharing or delivery services (e.g., Uber), you may be able to claim deductions for fuel, maintenance, registration, insurance, and depreciation.

2. Home expenses: If you rent out part of your home on platforms like Airbnb, you can claim a portion of your home-related expenses, such as utilities, internet, and cleaning.

3. Equipment and tools: If you use specific equipment or tools for your sharing economy activities, you may be able to claim deductions for their costs and maintenance.

4. Service-related expenses: You may also claim deductions for expenses related to providing your services, such as cleaning supplies or materials required for a task on Airtasker.

It’s crucial to keep accurate records of all your income and expenses to substantiate your claims during tax time. Additionally, the tax implications and deductions may differ for businesses or individuals with unique circumstances, so it’s always best to seek advice from a qualified tax professional.

The tax accountants and business advisors at MGI South Queensland can help you understand what your tax obligations are and if you are entitled to any deductions. Contact us now on 07 3002 4800 to get the latest advice.

Fraud is a serious threat to businesses of all sizes, causing significant financial losses and damaging the reputation of the affected company. Corporate fraud costs Australian businesses hundreds of thousands of dollars each year – and these are just the instances we know about. Fraudsters use various tactics to deceive businesses, including embezzlement, identity theft, financial statement fraud, and billing scams. As a business owner or manager, it is crucial to be aware of the risks to your business and take proactive steps to prevent them. In this post, we will discuss the most common types of fraud in the workplace and provide actionable tips to reduce the risks of fraud.

Types of Frauds In Business

Payroll Fraud

Payroll fraud, as the name suggests, involves the theft of funds from an employer via the payroll system. There are several ways that employees can commit payroll fraud in the workplace, including but not limited to, creating fake employees, stealing employee data, and manipulating time sheets or pay rates. While the payroll manager / team may have the easiest access to commit this type of business fraud, it is also possible for your payroll system to be hacked. Common types of payroll fraud include timesheet fraud, ghost employee fraud, and employee misclassification. Payroll fraud is a serious offense that can result in significant financial losses for the business.

Asset Misappropriation

Asset misappropriation is a type of business fraud where an employee steals or misuses company assets for personal gain. This can include theft of cash, inventory, or other company resources. Asset misappropriation is the most common type of fraud and can occur in any type of organization, from small businesses to large corporations. This type of workplace fraud can have a significant financial impact on a business, leading to losses and damage to the company’s reputation.

An example of asset misappropriation is an employee who steals cash from the company’s cash register and uses it for personal expenses. Another example is an employee who takes inventory from the company and sells it for personal profit. Asset misappropriation can be difficult to detect, as the perpetrator may cover their tracks by altering records or falsifying documents.

Businesses can prevent asset misappropriation by implementing internal controls, such as segregation of duties and regular audits, to detect and prevent fraudulent activities. Conducting background checks on employees and training them on fraud prevention can also help reduce the risk of asset misappropriation.

Identity Theft

Identity theft is a complex type of fraud where a criminal steals an individual’s personal information, such as their name, address, driver’s license number, or credit card information, to commit fraudulent activities. In the context of businesses, identity theft can occur when a fraudster uses an employee’s or customer’s personal information to access confidential data or make unauthorized transactions.

Financial Statement Fraud

Financial statement fraud is a type of fraud where a company misrepresents its financial performance or condition to investors, creditors, or other stakeholders. This type of fraud can involve manipulating financial records, inflating revenues, understating expenses or hiding losses. Financial statement fraud can have severe consequences for a company, including legal penalties, loss of credibility, and financial losses.

Billing Scams

Billing scams are a type of fraud in the workplace where a company receives a fraudulent invoice or bill for goods or services that they did not order or receive. Billing scams can be perpetrated by scammers posing as legitimate vendors or suppliers, or by employees who collude with outside parties to generate false invoices.

Preventing Business Fraud

Preventing business fraud in the workplace requires a combination of proactive measures, including implementing internal controls, conducting background checks and training employees on fraud prevention.

Implement Internal Controls

Internal controls are policies and procedures designed to prevent and detect fraud. These controls can include segregation of duties, regular audits, and oversight by management or a board of directors. By implementing internal controls, businesses can reduce the risk of fraud and ensure that fraudulent activities are detected and addressed promptly.

Conduct Background Checks

Conducting background checks on employees, vendors, and suppliers can help businesses identify potential red flags, such as criminal records or financial problems. Background checks can be conducted through third-party providers or by using online tools to verify credentials, employment history, and other relevant information.

Train Employees on Fraud Prevention

Training employees on fraud prevention can help them recognize potential fraud schemes and take appropriate actions to prevent them. This training can include topics such as identifying phishing scams, safeguarding confidential information, and reporting suspicious activities to management or law enforcement.

So what is your best form of protection against becoming one of the business fraud statistics?

We recommend every business undertakes a few vital steps:

1) Stay abreast of actual business fraud cases

The best way to know where the threat lies is to learn from other organisation’s misfortunes. Did you know that 36% of frauds in Australia last year were carried out by an organisation’s own management? Clearly having strong internal controls is critical in your bid to reduce the risk of undetected fraud occurring in your business.

2) Audit your fraud risk and implement strategies to reduce the chance of undetected fraud

The good news is that there are a number of strategies to reduce the risk of fraud occurring and going undetected in your business. Some strategies include having the proper internal controls in place, ensuring segregation of duties and spot checks and strengthening IT security.

MGI’s have developed a quick and easy fraud risk quiz that helps you understand your potential exposure to business frauds.

3) Have a disaster recovery plan

Particularly when it comes to cyber security you need to have a back-up plan to minimise the impact if you do end up the victim of a business fraud attack.

Some of Australia’s largest organisations are now facing fraud attacks as frequently as every four seconds (Sydney Morning Herald). While the threat to SMEs is not at this level, the threat is still very real.

Conclusion

How confident are you that your company or organisation is not exposed to the risk of fraud occurring?

Complete this quick, easy fraud risk assessment to identify the likelihood for fraud to occur and whether your current internal control environment is likely to identify this.

Business fraud is a serious threat that can have significant financial and reputational consequences for businesses. By understanding the most common types of fraud and taking proactive steps to prevent them, businesses can reduce their risk of falling victim to fraudulent activities. Remember to implement internal controls, conduct background checks, and train employees on fraud prevention. If you suspect fraud, report it promptly and seek legal assistance to protect your business and its stakeholders.

MGI South Queensland’s audit and assurance team works with clients to help them stay abreast of current fraud threats and implement controls and safeguards to reduce the risk and impact of fraud. We conduct internal controls reviews, which can provide a summary of areas your organisation may be more prone to fraud attempts. Avoid becoming one of the business fraud statistics and contact us now on 07 3002 4800 to start protecting your business today.

Recently, The Fair Work Commission (FWC) announced the decision to increase the minimum wage and Modern Award pay rates by 5.75% as a result of the Annual Wage Review 2022-23.

The new Modern Award pay rates are to be paid from the first full pay period on or after 1 July 2023.

There is no obligation to increase the salaries of employees who are already paid more than the new Modern Award. However, no employee covered by a Modern Award should be paid less than the new Modern Award minimum rates.

Enterprise Agreements – Employee

Employers have an obligation to employees to ensure that those covered under an Enterprise Bargaining Agreement are not paid under the base rate of the Modern Award. As a result, some employers may need to increase their base rate to employees to match the base rate in the relevant award. Employers need to ensure they review their EBA’s against the Modern Award Rates to ensure legal requirements are met.

Superannuation Guarantee Charge (SGC) – Employer

From 1 July 2023, employers must increase the minimum employer superannuation contribution for their employees from 10.5% to 11%.

This increase applies to any salary or wages payment made on or after 1 July, including where the salary or wages payment covers the period of work undertaken before 1 July 2023.

Further Information on the Annual Wage Review 2022-23

Visit the website to find out more about the FWC determinations for the Annual Wage Review 2022-23 including updated wages tables for the modern awards.

If employers are unsure about the modern award changes and how to apply them, please contact the team at MGI for assistance.

The ATO is paying increased attention to checking the validity of trust distribution minutes.

Points of interest by the ATO include:

1. Profit distribution is made to beneficiaries that are included beneficiaries under the trust deed.
2. If particular categories of income are allocated to different beneficiaries, this streaming of the different categories of income is allowable under the trust deed.
3. Decision is made by the appropriate parties who are actually the trustee/s of the trust or directors of the trustee of the trust.
4. Decision is made in time in accordance with trust law and the trust deed for that particular year. This is normally by 30 June each year unless there is some unusual wording in the trust deed.

To assist us with ensuring that the decision is documented by the trustees and that it is in time, we have this year introduced the drafting of the minutes through the CAS360 software. This software is what we use for maintaining the electronic updating of corporate registers for our client’s companies and trusts.

The CAS360 software also allows us to utilise sending out most of our client’s trust distribution minutes for electronic signing via FuseSign. FuseSign is an electronic method of signing of documents based on each signing parties’ unique email address or mobile. Essentially it means that the trustees will each receive a message with a link to review the documents and if they are in agreement to the distribution minute, it can be approved on the screen with a few clicks.

For our clients whom are receiving trust distribution minutes, please watch out for emails from asic@mgisq.com.au to access these distribution minutes. Please note if you have multiple trusts, you will be receiving a separate email for each trust.

Once all trustees or the sole trustee have signed via FuseSign, we are instantly advised that the trust distribution minutes have been signed for our records.

FuseSign (using the email address noreply@fusesign.com) also sends a signed copy via email to the trustee/s for their records.

Both MGI and the trustee/s will receive a detail report from FuseSign which advises per signing party the exact time and date they confirmed their acceptance to the trust distribution minute. It will mean that we will have these details available if the ATO requests it.

We ask that if you do receive emails from asic@mgisq.com.au that you attend to them promptly to ensure that your trust/s distribution minutes are completed on time.

If you have any questions, please do not hesitate to contact our MGI team at (07) 3002 4800 or asic@mgisq.com.au

As the end of tax year approaches, the Australian Taxation Office (ATO) has announced its 3 key areas of focus for Tax Time 2023. Landlords, those working from home and capital gains tax (CGT) will all be the subject of an ATO crackdown when it comes to tax returns this year. According to ATO Assistant Commissioner Tim Loh, the areas being targeted are due to the high number of common mistakes being made in these areas. With access to the financial information of 1.7 million rental property investors from 17 of the countries largest banks and mortgage lenders, the ATO will be able to use new data matching techniques to crosscheck claims made by landlords in 2023.

The ATO Targets For Tax Time 2023

Rental property deductions

As landlords (and homeowners) feel the pinch from mortgage interest rate hikes, many have been trying to push the boundaries with their claimed deductions. While there are a number of legitimate deductions available on rental properties, it’s vital that you stay within the law and understand what is acceptable and what’s not. As many as 9 out 10 rental property investors made mistakes on their annual tax returns and incorrectly claimed expenses.

The ATO is particularly focused on interest expenses and ensuring owners understand how to correctly apportion loan interest expenses where part of the loan was used for private purposes (or the loan was refinanced with some private purpose).

“You can only claim interest on a loan used to purchase a rental property to earn rental income – don’t forget, if your loan also includes a private expense, such as for a new car or a trip to Bali, you can only claim an interest deduction for the portion relating to producing your rental income,” Mr Loh said.

Work-related expenses

From March 1st taxpayers claiming working from home expenses are required to provide more detailed documentation and calculations. This means you can’t do a copy-paste from last year’s annual return. Previously you could choose from a number of different methods to calculate how much you could claim when working from home. However, as the working landscape changes and more people are working back in the office more frequently, the methods of calculation have changed and there are limits on what you can claim.

The ATO crackdown is particularly focused on ensuring taxpayers understand the changes to the working from home methods and are able to back up their claims.

“Keeping good records will give you flexibility to choose the right method that suits your circumstances and gives you the best deduction this tax time,” Mr Loh said.

Capital gains tax

Do you rent your home out for example on AirBnb or Stayz? Then you may need to pay capital gains tax (CGT). CGT is generally incurred when you dispose of assets such as shares, crypto, managed investments or properties.

The ATO wants to make sure that taxpayers have considered all their assets when calculating capital gains tax as well as apportionment of the main residence exemption if taxpayers have used their property to earn income.

It’s important that you have kept records of the income-producing period and the portion of the property used to produce income to calculate your capital gain.

“Generally, your main residence is exempt from CGT, however if you have used your home to produce income, such as renting out all or part of it through the sharing economy, for example Airbnb or Stayz, or running a business from home, then CGT may apply,” Mr Loh said.

Avoid an ATO Crackdown

By announcing it’s focus areas in advance, the ATO aims to promote fairness, transparency and greater compliance with tax laws through increasing awareness of the issues and providing guidance on how to avoid them.

Outside of these 3 main areas of focus, it has also been reported that income earned from the ‘gig economy’ or side hustles would attract greater scrutiny. This includes ride-share drivers and even social media influencers.

“If you’re running bootcamp sessions in addition to your nine-to-five job, well this is a side hustle and you need to declare this income to the ATO. If you’re an online content creator earning money or receiving gifts, you’re also likely to be running a business and there are tax obligations you need to comply with.” Mr Loh said.

A hobby crosses over to a business when there is an intention to earn a profit and the activity is planned and organised to achieve that goal.

The best way to avoid the issues highlighted as a focus in this ATO crackdown is to work with experienced tax accountants. Please contact the team at MGI if you need any assistance.