The ATO are changing GST collection on 1 July for some property transactions

The ATO are changing the way they collect goods and services tax (GST) on some property transactions during the settlement process.

From 1 July 2018, buyers who purchase new residential premises or potential residential land need to withhold an amount from the purchase price and pay it directly to the ATO on or before settlement.

There are transitional rules that apply to some contracts.

How the change may affect you!

If you are a property developer, you must let the buyer know when they sell residential premises or potential residential land if the the buyer needs to withhold an amount. You can include this information in the sale contract or in a separate document.

If the buyer needs to withhold an amount, you must also include the details listed below:

  • your name and Australian Business Number,   
  • the amount the buyer needs to withhold and pay to the ATO,
  • when the buyer needs to make the payment   
  • if the purchase includes a non-cash payment (such as land swaps), the GST-inclusive market value of that part of the payment   
  • other information as stated in the regulations.
  • You don’t need to tell the buyer if they are selling:
  • commercial residential premises   
  • potential residential land where the buyer is a GST – registered business purchasing the property for a creditable purpose.

Once the buyer has paid the amount, the ATO we will make a credit available to the seller in a GST property credit account and send you an email to confirm this. The ATO will apply this credit against your activity statement account once you lodge your business activity statement (BAS).

There are no changes to the GST rate or the way you lodge your BAS.

Do you import goods worth A$1,000 or less? – 12 June 2018

From 1 July 2018, overseas businesses that meet the GST registration threshold of A$75,000 will need to charge GST on goods that are:

  • less than A$1,000 (low value)
  • imported into Australia
  • not GST-free (such as most basic food, alcohol, tobacco, or tobacco products).

How will this affect you?

You will be charged GST on low value goods that you import if you are:

  • not registered for GST, or
  • are GST registered but importing goods for personal use.
  • You should not be charged GST if you:
  • are registered for GST
  • import the low value goods for business use in Australia, and
  • provide your ABN to the supplier and a statement that you are registered for GST.

If you’re charged GST incorrectly you should contact the supplier to let them know that you’re registered for GST, and request a refund.

Note that not all receipts that have GST applied will be tax invoices. They will need to contain an ABN to be considered a tax invoice. Overseas suppliers may be registered in the simplified GST system and have an ARN instead of an ABN.

What is the Business Portal?

ATO – 7 June 2018

The Business Portal is a secure ATO website where you can manage your business tax affairs easily online, when it’s convenient to you. It is designed to help you run your business more efficiently.

You can use the portal to access a range of services such as:

  • registering for GST or PAYG witholding
  • lodging, revising or viewing activity statements
  • requesting refunds or transfers between accounts
  • updating your business details
  • tracking the progress of refunds or transfer requests
  • communicating with us through a secure mailbox.

To access the Business Portal you will need an ABN connected to your myGov account or a compatible AUSkey.

You can access the portal 24 hours a day, seven days a week.

Remember, registered tax and BAS agents can also help you with your tax.

Tips for getting your activity statement right

We are noticing lately a lot of client questions around the completion of their activity statements & even errors in completing them.

These five activity statement lodgment tips may help you save time and get things right the first time:

  1. Lodge all your outstanding activity statements. We can’t process tax refunds until your lodgments are up-to-date.
  2. Even if you have nothing to report you still need to lodge a Nil statement.
  3. You can only claim GST credits for purchases related to your business, not purchases for private use.
  4. If your PAYG instalment amount or rate doesn’t reflect your current financial circumstances, you can vary it on your activity statement. The new amount or rate will be applied for the rest of the financial year.
  5. Make sure the ATO have your current bank account details. They can’t issue your refunds without this information.

You can update your details online or phone us on 13 28 66.

If you lodge your activity statement quarterly and online you may be eligible for an extra two weeks to lodge and pay.

Remember, Financially Sorted being a registered tax and BAS agents, can help you with your tax or BAS obligations.

ATO Audit Microscope

As with the commencement of any new financial year, comes the warnings from the ATO.

The following are the areas of concern that have been highlighted by the ATO:

Courier & Cleaning businesses – the ATO have become concerned about the level of compliance in cash-based industries, and have now extended the taxable payments reporting regime to include payments being made by courier & cleaning businesses to contractors.

Trust distributions – the ATO has also expressed concerns surrounding circumstances in which trust distributions remain unpaid, especially to individuals and bucket companies.

SMSF & property – the ATO is focusing on property held within SMSF’s and the commerciality of such investments. They will also be looking closely at the possibility of related parties being involved.

SMSF – the ATO is also focusing on the reviews/audits and to ensure that everything is above board with the appropriate paperwork on file.

For Your Calendar…

  • 14 July PAYG withholding Payers must issue PAYG withholding payment summaries to payees
  • 21 July June monthly activity statements – final date for lodgment and payment.
  • 28 July Quarter 4 (April–June) activity statements – final date for lodgment and payment.
    Quarter 4 (April–June) instalment notices (forms R and T) – final date for payment and, if varying the instalment amount, lodgment.
    Due date for payment of super guarantee contributions for quarter 4 (1 April – 30 June) in the previous financial year – contributions to be made to the fund by this date.