New reporting system for building and construction

From 1 July 2012, businesses in the building and construction industry need to report to us each year, the total payments they make to each contractor for building and construction services.
 
Your clients in the industry are encouraged to check how they keep their records to make sure they have the details required for the new Taxable payments annual report.

The first annual report is due 21 July 2013 for payments made in the 2012-13 financial year. In this first year businesses that lodge their business activity statements quarterly, may lodge by 28 July 2013.

For more information, refer to Taxable payments reporting - building and construction industry.

Extracted from ATO eLink 15/12

NIB holdings limited (nib) - 2011 return of capital (capital return)

This information applies to you if:

• you are an individual, not a company or trust
• you are an Australian resident for tax purposes
• you held shares in nib and received the return of capital in July 2011
• you did not acquire your shares under an employee share scheme, and
• any gain or loss you made on the shares is a capital gain or capital loss - this means that you held your shares as an investment asset, not
  • as trading stock
  • as part of carrying on a business, or
  • to make a short-term or 'one-off' commercial gain.

Background

All shareholders who held nib shares on 13 July 2011 (record date) were entitled to receive the capital return.

The capital return was completed on 21 July 2011.

Components of the capital return

The capital return was $0.1607 per share. This payment was a capital payment. It was not a dividend for any purpose and had no dividend component.

Are there any tax consequences for me?

There are two tax consequences. You need to:

• work out whether you have made a capital gain (you cannot make a capital loss on a capital return)
• adjust the cost base (and reduced cost base) of any nib shares you owned on 21 July 2011.

Last Modified: Monday, 24 October 2011

See ATO Website for more information.

Keydates for registered agents August 2011

August 2011 Date Obligation 14 August Due date for lodging the PAYG withholding payment summary annual report for: large withholders whose annual withholding is greater than $1 million payers who have no tax agent or BAS agent involved in preparing the report. 21 August July 2011 monthly activity statement - due date for lodging and paying. 25 August Quarterly activity statement, quarter 4, 2010-11 - tax agents and BAS agents - due date for lodging and paying if you are lodging via one of the following: electronic lodgment service (ELS) electronic commerce interface (ECI) Tax Agent Portal BAS Agent Portal. 28 August Due date for lodging the Superannuation guarantee charge statement - quarterly and paying the super guarantee charge for quarter 4, 2010-11, if the employer did not pay enough contributions on time. Employers who are lodging a Superannuation guarantee charge statement - quarterly can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They will still have to pay the remaining super guarantee charge to us. Note: Remember, the super guarantee charge is not tax deductible. For help working out the super guarantee charge and preparing the Superannuation guarantee charge statement - quarterly, use our online super guarantee charge statement and calculator tool. 31 August TFN report for closely held trusts. Trustees who have an obligation to lodge a TFN report for the 2011 year have been granted a deferral to lodge this report by 31 August 2011. Note: If you lodge the TFN report electronically, you may lodge it when the trust income tax return is due provided the return is lodged electronically and future trust returns are also lodged electronically. This is a transitional arrangement for the 2011-12 Lodgment Program only. Last Modified: Friday, 1 July 2011

Evading pay as you go withholding obligations

Failing to withhold and report tax from cash payments to employees is illegal. The ATO uses a range of strategies to identify businesses that may not be withholding tax from cash payments to workers.

If employers make cash payments to their workers, they must withhold tax from those payments when required to, and report to the ATO the amounts withheld. If employers are aware of competitors who are using cash payments to evade their withholding obligations, the ATO recommends that they notify the Tax Evasion Referral Centre:

•  phone 1800 060 062

For more information about reporting tax evasion, refer to Is your information about tax evasion?

Extracted from ATO eLink 30/2011

Deductibility of unpaid directors' fees

The ATO has issued Taxpayer Alert TA 2011/4 warning taxpayers of an arrangement where a private company claims a deduction for unpaid directors' fees. The ATO says the arrangement may be considered a sham and Part IVA of the Income Tax Assessment Act 1936 may apply.

The arrangement involves a private company making resolutions before 30 June (the end of the financial year) regarding the amounts payable to directors. The company claims a deduction for the payment, but the actual payment is never made (or a minimal amount is paid the following year) to the directors.

Extracted from CPA Tax News 9 June 2011