Question:
Taxpayer wins against Tax Office
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
Revenue laws are deliberately framed to advantage the revenue collector –the Tax Office. In a recent case, Re Rasschta Coatings Pty Ltd as trustee for the Rasschta Coatings Trust and FCT (2015) AATA34 a business that was audited by the Tax Office could not produce financial records and source documents because they were all destroyed in the 2010/11 floods which inundated much of Brisbane.
Did the Tax Office auditors view this situation compassionately? No. The undertook an analysis of deposits into the bank and the taxpayer’s bank account and issued GST assessments and tax assessments, together with penalties on the basis that all deposits represented proceeds of taxable supplies. Shortfall penalties were assessed for “lack of reasonable care and failing to provide documents”. This case went to the Administrative Appeals Tribunal which was satisfied on the evidence that many of the deposits were either loans, repayments of loans or non-taxable deposits and that the income tax and GST returns lodged by the taxpayer reflected the true position. The objections were allowed in full.
The Tribunal remarked that considerable public and private resources might have been saved had the Commissioner undertaken his investigations by reference to the general ledger (which would have provided details of the transactions) rather than require provision of source documents (which had been lost in the floods).
WTB 2015/88
Andrew and Tony Lovett
11 February 2015
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