Welcome to our July newsletter and, with a new financial year underway, it might be a good opportunity to review some of the recent changes to business and investment rules to make sure you’re on the right track.
Small businesses and SMSFs: keep an eye on the rules
As digital tools continually evolve, it is more important than ever to make sure you understand your tax obligations and comply with them. The Australian Taxation Office has been expanding and improving its data matching programs. Data matching compares data from a range of private and government organisations with the information you have provided to the ATO.
Today there are some 26 different data matching programs covering a wealth of transactions including various insurances (health, landlord, income protection); electoral rolls, bank accounts and credit cards, real estate, online sales platforms, international travel and crypto assets. So, if you leave out income from your tax return or inflate deductions, your chances of getting caught are much higher.
We take a look at some of the key areas to be mindful of when preparing your tax return this year.
The ATO says that, while 87 per cent of taxpayers who own rental properties use a registered tax agent to lodge their return, a review has found that nine in ten rental property owners are getting their returns wrong. It is crucial that you provide us the right information to prepare your return correctly because you are responsible for what you include in your tax return, even when using an agent.i
For example, the new landlord insurance data-matching program provides information about any insurance payouts that might have been made during the year. These must be reported as income.
Along with the new landlord insurance data matching program, a review of investment loan data will also get underway. We can guide you to ensure we are capturing all the relevant information to submit a complete tax return.
The ATO is also looking into the income earned from side hustles or the sharing economy.
It is now requiring platforms that provide taxi services and short-term accommodation, such as Uber and Airbnb, to report their data. All other electronic distribution platforms will have to begin reporting their data to the ATO from 1 July 2024.
The ATO says the data will give it a clear picture of the people earning income on the platforms and will be matched against their tax returns and activity statements.
Small business obligations
Businesses are also under growing ATO scrutiny using a combination of sophisticated data matching and a requirement for further reporting.
The Single Touch Payroll (STP) program, first introduced five years ago, underwent some major changes last year, known as STP phase 2. Now, all businesses are required to use STP each time they pay their employees to report salaries, amounts withheld and superannuation guarantee liability information.
The ATO recommends you discuss your current payroll processes with your tax or payroll provider to make sure you are complying with Phase 2 reporting. “If you don’t have a tax or BAS agent, consider engaging one,” the ATO says.ii
And, in a move to ensure employees receive their super on time, the Federal Government will introduce what it calls ‘payday super’.
From 1 July 2024, all employers will be required to pay the superannuation guarantee amount to their workers’ super funds on each payday rather than quarterly as is currently the case.
Self managed super funds
When it comes to self managed superannuation funds, tax and regulatory performance is generally strong, according to the ATO.
Nonetheless it is a massive sector providing more than 1.1 million people with their retirement income. With an estimated total asset value of $868 billion, it is not far behind the industry funds sector, which holds just over $1 trillion in assets.
The SMSF sector’s importance and value to individuals brings it under close attention from the ATO, which is scaling up its compliance activities because it is seeing indicators of “heightened risk” that put retirement savings at risk or take unfair advantage of the favourable tax environment.iii
In particular, the ATO is chasing down fraud and investment scams, illegal early access to super funds by members and failure to lodge annual SMSF returns.
With increasing ATO focus on taxpayers and businesses to comply with their obligations, we are here to guide you through the changing rules and regulations and answer any questions.
Managing the costs of raising children
It is a special feeling to welcome a new child or grandchild into the world and watch them grow. Sharing their joy as they reach new milestones is priceless.
Of course, there is a real cost – raising a child is expensive, particularly now as the cost-of-living spirals higher. Estimates vary widely from the few studies completed but it is fair to say that over a child’s lifetime families can spend hundreds of thousands of dollars on living, medical and schooling expenses for their children.
So, having a financial strategy in place to cover the costs and taking advantage of government support where available can make a big difference.
Taking care of the basics
The first step is to update your Will to nominate guardians for your children in case the worst happens. You may also consider life insurance and income protection to ensure your family is protected.
Next, a savings and investment plan will help you navigate the years ahead with more certainty. Adding small amounts of money regularly to an account for education and other expenses can help to ease financial stress. The MoneySmart savings goals calculator shows what can be achieved. You could consider fee-free high interest savings accounts or your mortgage offset account as a way to save cash for short-term needs.
Meanwhile, some longer-term investments such as shares, exchange traded funds or listed investment companies may provide financial support for later expenses. They can offer the possibility of capital growth and diversification for a relatively low cost.
Keeping an eye on the future also means thinking about your superannuation. If one partner is staying at home to care for the children, the other partner can split their super contributions with them. You will need to check if your fund allows it, whether they charge a fee and complete some paperwork.
There are also some tax considerations, so it is important to make sure you understand the implications for you.
Take the time to discover the government payments and supports available for families. For example, the Paid Parental Leave Scheme provides support for mothers for up to three months before the birth.
A recent change to Parental Leave Pay and Dad and Partner Pay sees these two payments combine into one payment that is available to both parents for up to two years after the child’s birth.
You will need to meet income and work tests and claim within certain timelines.
Even if you are not eligible for parental leave pay, you may still be able to apply for both the Newborn Upfront Payment and the Newborn Supplement.
Then there is the Family Tax Benefit, a two-part payment to help with the cost of raising children. To receive the benefit, you must have a dependent child or a full-time secondary student aged 16 to 19 who is not receiving any other payment or benefit such as a youth allowance, care for the child at least 35 per cent of the time and meet an income test.
Grandparents who are keen to help out their families financially can gift money to their children or grandchildren. Be aware that Centrelink has gifting rules for those receiving an age pension. You can give $10,000 in one year or up to $30,000 over five years without your pension being affected. If you give more, the amount will be treated as though you had retained it in your own accounts.
However, gifts and inheritances are generally not considered as income for tax purposes. The ATO says neither the donor nor the receiver will pay tax on a gift if:
- it is a transfer of money or property.
- the transfer is made voluntarily.
- the donor does not expect anything in return.
- the donor does not materially benefit.
Tax may apply in some cases where property or shares are gifted.
The joys of raising a little one are many, and having a plan to manage the financial implications can let you enjoy the journey. Get in touch with us to create a plan to secure your family’s future.
What to do if you’ve been scammed
Think you have been scammed? These steps will help you take action quickly to stop the scammers and limit the damage.
Know that you are not alone and you can recover from this. There is support available, if and when you need it.
Act fast if you’ve been scammed
If you’ve been scammed, follow these steps to take action.
- Don’t send any more money. Block all contact from the scammer.
- Contact your bank or financial institution immediately to report the scam. Ask them to stop any transactions.
- Warn your family and friends about the scam, so they can watch out for potential follow up scams.
If you’ve paid a scammer
If you’ve paid a scammer in any of these ways, here’s what to do:
- Credit/debit card – Contact your bank or card provider immediately to report the scam. Ask them to stop any transactions.
- Gift card – Report it to the company who issued the card.
- Wire transfer – Report it to the wire transfer company or bank that you used.
- Money transfer app – Report it to the app provider (the seller or developer, not the app store).
- Crypto – Report it to the platform or company you used to send the money. Cryptocurrency may not be recoverable.
- Cash – If you sent by mail or delivery service, contact Australia Post or the delivery service used to see if they can intercept the package.
- Unauthorised transfer – If a scammer has transferred money without your approval, report it to your bank straight away. Ask them to freeze your accounts and transactions.
If a scammer has your personal information
For example, if your personal details (like name, phone, email, address, identity documents) have been leaked in a data breach. Here’s what to do:
- Report the data breach to your financial institutions – Let your bank, super fund and any other financial services know.
- Contact IDCARE – Call 1800 595 160 (Monday to Friday, 8am–5pm). They can help you make a plan (for free) to limit the damage.
- Create a new, stronger password – Make sure you haven’t used it before. If you’ve used the leaked password anywhere else, update it there too.
- Watch out for suspicious contact – Look for suspicious emails, phone calls, texts or messages through social media. Block or don’t answer anyone you don’t know. Don’t click on any links.
- Monitor your bank account – Keep a close watch on your bank account for any unauthorised transactions.
- Monitor your credit report – Request a temporary ban on your credit report to ensure no unauthorised loans or credit applications can be made.
For more tips, see identity theft.
If a scammer has accessed your computer or phone
A scammer pretends to be from your internet or phone provider. They say you have a technical problem and ask for access to your device. Then they infect it with a virus, to steal your passwords and financial information. Here’s what to do:
- If they accessed your computer – Update your security software and run a scan for viruses. Delete anything identified as a problem and reset your passwords.
- If they accessed your phone or phone account – Report it to your phone provider. Update your security software and run a scan for viruses. Change your passwords or pins, block scam calls and consider changing your phone number.
You could also get an IT professional to check your devices in-person.
Watch out for follow up scams
If you’ve been caught up in a scam, you may be targeted in a follow-up scam. Hang up the call, or block emails or text messages, if someone:
- offers to swap your investment for another one to recover your losses
- tells you to ‘hang in there’ as your investment will increase in value soon
- offers to buy your shares at a premium but asks you to pay a fee to have ‘restrictions’ on the shares lifted
- asks you to pay a fee for a fake share certificate
- claims they can recover your losses for a percentage of the recovered losses or for a fee they say is a ‘tax’, ‘deposit’, ‘retainer’ or ‘refundable insurance bond’
- asks you to pay for travel and accommodation costs to find the scammer who has taken your money
These are all tricks scammers use to get more money from you.
Help to stop the scam
Report any scams to your bank or financial institution straight away to avoid losing any more money. You may not be able to get your money back once it’s been paid to a scammer. But reporting it will help stop them scamming someone else.
Agencies use the information you give to build cases against scammers. They also educate the public and share data about what’s happening.
If you’ve been targeted by a scammer, report it to:
Banking and credit card scams
Fraud and theft
Financial and investment scams
Including those involving superannuation, managed funds, financial advice, financial products and insurance
Tax related scams
Social media scams
Get support after being scammed
If a scam is causing you problems with debt, talk to a financial counsellor. This is a free and confidential service to help you get your finances back on track, or you can speak to us.
Being scammed is a horrible experience. If you need someone to talk to (24 hours a day, 7 days a week) contact:
- Lifeline — 13 11 14 or the online Crisis Support Chat
- Beyond Blue — 1300 22 4636 or Beyond Blue website
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/investment-warnings/what-to-do-if-you-ve-been-scammed
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