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Sky Update – August 2017

In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.

Work-related expense claims under scrutiny

Will you claim work-related expenses on your tax return this year? The ATO now uses real-time data to compare people’s tax returns with others in similar occupations and income brackets.

This year the ATO is focused on identifying higher-than-expected claims for expenses related to vehicles, travel, internet, mobile phones and self-education.

TIP: Ever heard that you can make a standard claim of $300 for work-related expenses even if you don’t have evidence? This isn’t true! The ATO doesn’t ask for receipts up front for claims up to $300, but you must have actually spent what you claim, and be able to show how you worked out your deductions if the ATO asks.

The ATO is also concerned about incorrect claims for work-related clothing and laundry expenses. In 2014–2015, around 6.3 million people made claims for clothing expenses, but work-related deductions are in fact only available for specific uniforms and protective clothing items, not for everyday clothes you buy, launder and wear for work.

Outdoor dining & smoking restrictions

On 1 August changes came into force to further restrict smoking in outdoor dining areas.

If they have not already acted, hospitality industry operators need to act urgently to ensure that they are compliant with the new rules.

Payroll Tax & regional Victorian employers

With the lower 3.65% Payroll Tax rate now in place, regional Victorian employers need to ensure that they are completing their Payroll Tax returns correctly to receive the benefits.

If your business is a regional Victorian employer and you need assistance, get in touch.

Employee travel expense deductions

The ATO has updated their guidance on work-related travel deductions. To claim for transport or other employee travel expenses (like accommodation and meals) in your tax return, you must have incurred the expenses as part of gaining or producing your taxable income. Private and domestic travel expenses, including the costs of your ordinary home-to-work travel, aren’t claimable.

Transport costs for work-related travel may be deductible, but the ATO will consider factors such as:

  • whether the travel is a necessary part of performing your work;
  • whether your employer pays you to undertake the travel; and
  • whether you have to follow your employer’s instructions during the travel period.

Accommodation, meal and other incidental expenses are deductible as work-related only if your work has “special demands” or “co-existing work locations” that mean you have to sleep away from home.

Gaming machine entitlements

In our last Sky Update we included an article on the Victorian Government announcement concerning the allocation of new gaming machine entitlements for 2022 and beyond.

Since the announcement that VCGLR has published indicative pricing for the gaming machine entitlements. Clubs & pubs are encouraged to login to the VCGLR portal to access the indicative pricing for their venue.

For more detail on the changes, check out the Department of Justice & Regulation website.

Hire Education Loan Program (HELP) & Trade Support Loan (TSL) overseas obligations

If you are a non-residents (for tax purposes) who has a HELP debt or TSL, you must report your foreign-sourced income with your 2017 tax return, or notify the ATO that a return is not necessary.

To report your income, you need to complete the non-resident foreign income schedule and lodge it with your tax return.

You will also need to submit an overseas travel notification if you intend to, or already reside overseas for 183 days or more in any 12 months.

If your worldwide income is at or above A$54,869 for the 2017 income year, you must make a repayment of your HELP or TSL liability.

For more information click here.

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