Taxation Services

Jonathan Gore & Associates is a full service tax and accounting firm with the resources to assist our clients meet their obligations in a comprehensive and efficient manner.

Individual Taxation

The complexity of our Australian income tax system has resulted in an increasing number of individuals seeking the services of a registered tax agent to assist in completing their annual return. With a raft of offsets (rebates) and other questions, preparing a tax return is not an easy exercise for most of us. We ensure all legitimate deductions are maximised , and assist you in ensuring you are aware of your record keeping requirements.

Some occupations have particular deductions relevant to the job, and our team is always up to date with the latest tax office determinations in this area. They’ll also be aware of what the Australian Taxation Office (ATO) is targeting – be it property investors, share market participants or a particular occupation.

Often, whilst assisting with even the simpler returns, our trained staff will identify and highlight opportunities to assist you. This could be a suggestion on the ownership structure of investments; making the most of differential tax rates within the family group; or timing opportunities for both income and deductions. We’ll also help by identifying possible gaps in your personal financial position, which might benefit from a complimentary introduction to a financial planner.

Business Taxation

Business income tax is the core of our Taxation and Accounting Services practice. For many businesses, taxation is a key outgoing and needs to be managed, like all areas of the business, carefully and proactively. However, as many of our clients say – they’re very happy to be paying tax because it means the business is traveling in the right direction. And that’s the right perspective, from Bartons’ point of view.

Key areas we focus on include:

Business Structure

We can guide you in the process of deciding which business structure will suit your particular circumstances. At the simplest they include the following:

  • sole proprietor
  • partnership
  • company
  • unit or discretionary trust

Many small to medium business groups are structured as a combination of such entities, to achieve the desired outcomes.

Of course tax is far from the only consideration in buying or starting a business, but it does need to be factored into an integrated approach to ensure the optimal outcome is achieved. Some of the key criteria a structure will be assessed against include:

  • taxation and flexibility of profit distributions
  • minimizing the legal risks of being in business, including asset protection
  • employment and superannuation arrangements for the principals
  • ease of entry and exit of equity participants
  • outcomes on sale of the business, including critically, access to the Small Business Capital Gains Tax concessions, and distributions

We work closely with your commercial lawyers, or can refer you to people we work with, to get this right.

Business Tax Compliance

The minefield that is daily tax compliance is our forte. Your designated service team will be available by email, phone or in person to promptly answer those tricky questions. It’s often best to ask at the time rather than wait (and perhaps forget) until later.

We’ll also keep you up to date with changes you need to be aware of.
Preparation of your business group tax returns is completed within an agreed time frame, and if done in conjunction with effective tax planning (see below), shouldn’t throw up any surprises.

Our comprehensive documentation process ensures we ask the right questions, and assist you to properly meet your obligations. Particular areas we find we can add value include:

  • application of Simplified Tax System (STS) incentives
  • maximizing depreciation allowances for plant & equipment
  • assisting with tax classification of items on revenue and capital account
  • stock valuation processes
  • management of loan accounts in companies and unpaid trust distributions
  • maximizing tax deductibility of borrowings including tax effective refinancing

Tax Planning

We like to meet up with our business clients at least twice a year for taxation purposes – once to plan and secondly to present the final results.

Tax planning typically occurs in the April to June quarter, when at least 9 months trading results are to hand, and a reasonable full year profit forecast can be generated. This in turn allows us to prepare a pro-forma taxation estimate, and in turn consider strategies to take advantage of legitimate minimization opportunities that might exist eg:

  • principals’ superannuation contributions
  • planning of trust beneficiary income distributions (eg children turning 18 and eligible for taxation at adult rates)
  • planning of capital transactions to facilitate matching of capital gains and losses
  • reviewing the group structure to check for potential beneficial changes prior to the end of the financial year
  • consideration of income deferral and expenditure prepayment opportunities

The key point here is that it’s too late to plan your taxes after the end of the financial year.

Goods and Services Tax (GST)

The Australian Government introduced a comprehensive value added tax with effect from 1 July 2000.

Most goods and services are subject to a 10% GST which is collected by the business supplier. There are however a number of important exemptions from the tax:

  • food ingredients
  • health goods and services
  • exports
  • residential rentals
  • banking and financial charges
  • most other government rates and charges

A business enterprise with annual turnover exceeding $75,000 is required to register for GST. The definition of ‘enterprise’ is very wide and includes most undertakings.

A registered enterprise is required to charge GST on any taxable supplies it makes, and is entitled to claim a refund (called an input credit) for any GST it has paid on expenses incurred in the business.

GST is accounted for on any of monthly, quarterly or annual bases, depending on various qualifying criteria. The process of reporting and remitting GST to the ATO is conducted on a Business Activity Statement (BAS), which also doubles as the reporting mechanism for other business taxation remittances and credits. These include:

  • Pay as You Go Withholding (PAYGW) ie tax deductions from employee wages
  • Fringe Benefits Tax
  • Wine Equalisation Tax
  • Pay as You Go (PAYG) income tax instalments
  • Diesel fuel credit scheme

There are some tricky areas in GST, particularly around property development, and application of the so called margin scheme. This seeks to ensure developers are only subject to GST on the value they have added to property, rather than the gross revenue from the project.
The team at Bartons will ensure you are preparing your BAS in accordance with the law if requested. We also prepare the BAS for many clients who choose to outsource this task.


Capital Gains Tax (CGT)

CGT is not actually a separate tax, it is a set of rules to determine how profits derived on the disposal of capital assets are to be added to normal taxable income for taxing.

In broad terms, any profit made on a capital item is subject to tax. Profits from assets which have been held for more than one year are generally discounted by 50% before tax is applied. An asset for CGT is broadly defined, and includes shares, real estate (except the family home), certain antiques, artworks and collectibles, some legal rights and entitlements, and business interests. Personal items, excluding those mentioned elsewhere are exempt.

Capital losses, where they arise, may be carried forward indefinitely to be offset against capital gains in the future. Capital losses may not be deducted directly against other taxable income.

For business proprietors, there is a suite of concessions that may be available to have the effect of reducing, and in some cases eliminating, CGT that would otherwise be applicable on the sale of a business interest. The policy intention of this is to recognize that such business owners have often not had the opportunity to superannuate themselves, and the sale of the business in part reflects an accumulation of retirement savings. Furthermore the concessions are an implicit recognition of the risks taken by proprietors, and the contribution of small business to the Australian economy.

There are a number of threshold tests a person must pass before being eligible for the concessions:

  • the gains must have been made from the sale of an ‘active’ asset held for at least a year
  • the individual must not have net assets exceeding $6 million immediately before the sale (excluding the family home, superannuation and personal effects)
  • the individual must have an effective interest in the active asset of at least 20%

There are extensive trace-through rules to ensure business owners are neither disadvantaged nor advantaged by the use of traditional structuring, such as companies and trusts.

Having met the basis tests, the gain is generally discounted by the standard ‘general’ 50% discount (except companies, curiously), and then by a further 50% of the balance for the active asset discount. This means that at worst, 25% of the gain will be subject to tax. The taxpayer then has a range of alternatives to choose from:

  • if under the age of 55, to ‘rollover’ up to $500,000 of gains into a complying Australian superannuation fund, tax free. There is no tax on the proceeds in the superannuation fund either.
  • if over the age of 55 , and the sale is in consequence of planning to retire, the gain is tax free and need not be rolled into superannuation
  • where the gain is from a business that has been held for 15 years or more, and the sale is in consequence of retirement, there is no tax nor a requirement to rollover into superannuation, unless under the age of 55.

Employment Taxes

In addition to employee income tax withholding, there are a range of additional tax and oncosts which employers need to be aware of. The main items are as follows:

  • Fringe Benefits Tax (FBT). This is a tax administered by the ATO which seeks to ensure non cash benefits are effectively taxed as if they were paid to and taxed as ordinary income in the hands of the employees. This is a complex area with numerous valuation rules, exemptions and inclusions. We typically advise our clients on their exposure to FBT, and assist them in meeting their documentation and compliance obligations. We would normally prepare the annual FBT return, which pertains to the year ended 31 March each year, rather than the usual June year end for income tax.
  • Superannuation Guarantee Charge (SGC). all employers are required to contribute 9% of ordinary time earnings (OTE) to a complying superannuation, within one month of the end of the quarter in which the remuneration was paid. Contributions are not payable where OTE for the month is less than $450. Employers must offer a limited choice of superannuation funds to employees.
  • Workers Compensation Insurance. Again, each state and territory approach compulsory workers compensation independently, but with common themes. Insurance is generally payable on all wages, superannuation and fringe benefits. The rate of insurance varies according to industry type and claims history.
  • All Australian states and territories impose payroll tax (PRT) on employers with payrolls exceeding certain thresholds (which differ by jurisdiction). Anti avoidance provisions exist to ensure multiple entities of commonly owned groups are subject to PRT. The definitions usually bring employer superannuation contributions and fringe benefits into the PRT net.