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The government’s new tax agent laws, which are due to begin early next year will make tax agents more accountable and boost protection for consumers, according to Australia’s peak accounting bodies – the Institute of Chartered Accountants in Australia (ICAA), CPA Australia and the National Institute of Accountants.
 
Assistant treasurer Nick Sherry will today brief members of Australia’s tax profession on the implications of the new regime at an event hosted at the ICAA’s head office in Sydney.

The joint accounting bodies said the tax agent reform has been 15 years in the making and that consumers of tax agent services would finally have a better safety net under the new laws.

All three bodies have supported the government’s initiative of putting in place a national regulatory regime that encompasses a uniform code of conduct for all practitioners.

One of the benefits of the new regime will be to deliver to consumers a better ’safety net’ in respect of their dealings with tax practitioners.

As treasury secretary Dr Ken Henry will no doubt point to in the recommendations he makes as part of his current tax review, simplification of the tax system for all taxpayers – especially those that rely on tax agent services - is one of his key priorities. The joint accounting bodies believe that the introduction of the new tax agent services regime heralds the first significant step on the path towards reform of Australia’s tax system.

The joint accounting bodies will work closely with the soon-to-be-announced Tax Practitioner’s Board in order to support them in getting on with the task of educating and transitioning the tax profession into this new regulatory framework from around 1 January 2010.

NUMBER CRUNCHING

 125 the number of taxes in Australia

6000 the estimated number of pages in the Tax Act

16 the percentage of taxpayers using e-tax

9,429,732 taxpayers, almost 80 per cent, get a refund

$1998 the average refund

1,093,348 taxpayers negatively gear, costing $10 billion

7.6 million the number of people who claimed an average $1920 in deductions for work-related expenses last year

About three-quarters of individual taxpayers are estimated to use a tax agent

National Australia Bank’s recent fee cuts have received much positive media attention yet the moves mask a deeper strategy by the bank to access cheaper funding lines.
The media has generally portrayed the move as having the aim of keeping existing customers happy whereas it was more likely done as a move to attract new deposit customers.
NAB has performed the worst of the Big Four in attracting retail deposits throughout the rush into deposits sparked by the financial crisis. Even though NAB increased retail deposits by $13 billion to $56 billion from mid-2007 to August 2009 this was well below the  performance of its peers.

NAB’s banking rivals attracted somewhere in the range of $11 billion and $22 billion more of cheaper funding during the recent crisis, leaving NAB now scrambling for market share.It is easly to conclude that NAB’s latest round of fee cuts appear more like a desperate attempt to claw back some of the ground it has lost recently.

The move by NAB is set to cost the bank over $100 million a year.

But if it succeeds in boosting deposit levels, it will prove a cunning move.

If NAB can increase deposits quickly, it will provide a funding source for a potential spike in residential lending, as the newly acquired mortgage broker army from Challenger begins writing the bank’s loans.

The strategy at NAB seems to be a case of giving with one hand and while taking back with the other.

Thanks to www.burning-pants.com/ for the bringing this to our attention

The ongoing fight over the Australian tax Office’s decision to refuse tax deductions for fees paid by sportsperson to their managers was finally decided by the Australian High Court  in June and now the ATO his issued its response. 
 
For the background to this see our earlier articles at tax-office-loses-2-court-cases-on-sportsperson-fees-appeals and sportsperson-management-fees-tax-deduction .

The Courts decision was that the taxpayers’ appeals were allowed. The fees were deductible. Now the ATO has release a Decision Impact Statement .

The tax office had argued that the footballers were employees and that the fees paid for the negotiation of the playing contracts were incurred only to obtain new employment contracts and had no connection with the course of the taxpayers earning income from their non-playing businesses.
However The High Court unanimously held in both cases that the fees were deductible as being incurred by the taxpayers in the course of gaining or producing assessable income from carrying on a business of commercially exploiting their sporting prowess and associated celebrity.

The Tax Office will now amend Taxation Ruling TR 2000/5 to clarify that it does not apply to employees whose employment activities form part of the carrying on of a business. That is, it accepts the fees are deductible, but only for those whose activities extend beyond mere employment and can be regarded as carrying on a business.

Peter Costello, in one of his last public appearances before retiring from Parliament, has sought to defend his record on the superannuation system. He says that scrapping taxes on super payouts and overhauling contributions taxes were as significant as the introduction of compulsory superannuation.

However he admitted that he regretted introducing, nearly a decade ago, the now defunct super surcharge. The surcharge (which he always denied was a tax) was levied on the super funds of high income earners and sought to introduce equality into the super system but imposed too much regulation.

”I regretted it ever after – the complexity of the system was just awful,” Mr Costello told a Super Ratings conference in Melbourne.

Mr Costello was speaking at the Super Ratings conference in Melbourne

The ATO is contacting taxpayers to advise of lost super that may belong to them.

Lost members register

The ATO maintains a lost members register (LMR) that records super accounts reported by super funds as lost.

You may be a lost member if:

• a super provider has received returned mail for the you and has been unable to contact you, as they do not have current contact details for the you
• their super provider has not received contributions or a rollover for you in the past five years, or
• the your account was transferred to a fund as a lost member.

More information

For more information about the lost members register, refer to Finding your lost super.

You can use the SuperSeeker tool to look for lost super.

the Assistant Treasurer, Senator Nick Sherry, announced that two high-profile tax crackdowns have this past financial year raised more than $313 million in tax liabilities and penalties against tax cheats.

Project Wickenby targets a range of tax avoidance schemes, including the use of offshore tax havens.

“Phoenix” companies are those which deliberately go into liquidation to avoid tax and other responsibilities, such as superannuation payments and service leave entitlements owed to employees. They then re-emerge as another corporate entity, but with largely the same management.

During the year ended 30 June 2009:

• Wickenby raised $230 million in tax liabilities and collected $40 million in cash. In addition Wickenby collected $159 million in tax collected in subsequent years from people who have been subject to Wickenby action.
• Targeting of phoenix practices also raised more than $83 million in tax and penalties within Australia.

Project to date, Wickenby has raised $406 million in tax liabilities and collected $117 million in cash. In addition $235 million in tax has been collected in subsequent years from people who have been subject to Wickenby action. Wickenby agencies have also been responsible for restraining $76 million of assets under proceeds of crime legislation.

The government has allocated  $122 million extra funding for Project Wickenby investigations over the next three years.

The audit results and other key details in the fight against tax crime are contained in a new online magazine published by the ATO Targeting tax crime is available at www.ato.gov.au/targetingtaxcrime

In a recent speech, Dr Ken Henry discussed some progress of the review into the tax system. Some of the points he raised included:
• the review panel needs to seriously consider the merits of a reduction in the company tax rate
• Australia and New Zealand are now the only two countries in the OECD that maintain dividend imputation systems, though most OECD countries provide some form of shareholder relief, such as through a lower tax rate on dividends or a uniform credit. Dr Henry said, however, that he thought the time had not yet come ‘for dividend imputation to be abandoned’
• the trans-Tasman mutual recognition of imputation credits will be considered by the review panel

- Perspectives on company tax

A USA bank now allows customers to deposit cheques online by simply scanning and uploading them. If you have an iPhone, you can even just photograph and submit a cheque via the iPhone app.

We generally only go to the branch to deposit cheques and would love NAB to implement this.

In the 2009 Budget, the government announced changes to the non-commercial losses rules. These changes will further restrict the deductibility of business losses incurred in relation to non-profitable business activities. The measure will ensure excess deductions from unprofitable business activities cannot be used to reduce salary, wage and other income of high income earners.

From 1 July 2009, taxpayers with an adjusted taxable income of over $250,000 will instead have excess deductions quarantined to the business activity. The existing rules will continue to apply to taxpayers with an adjusted taxable income of $250,000 or less.

Taxpayers will still have the ability to apply to the Commissioner of Taxation for relief from the rules if there are exceptional circumstances or because the nature of the activities means that they are temporarily carrying on an uncommercial business but the activities they are undertaking are nonetheless independently assessed as commercially viable.

For more information refer to:

• Treasurer’s press release 067/2009
•  An exposure draft has been released and interested parties are invited to comment. The closing date for submissions is 26 July 2009. Exposure draft – Non-Commercial Losses