ATO casts net wide when it comes to taxable business income
Commissions, investment earnings, gratuities and more must be included to be assessed, the office warns.
Frequently forgotten revenue streams such as tips and patent royalties need to be included in the assessable income of a business, the ATO warned in an update.
Commissions, investment earnings, gratuities and compensation payments are all part of assessable income this tax time as well as other more obscure income sources.
Royalties such as payments when other entities use the business’ patent as well as incentives such as cash payments to lease business premises are also included.
Interest on business investments along with interest on overpayment or early payment of tax as well as dividends and franking credits on business investments should also be on the assessable income list.
Rental income from property owned by businesses as well as lease payments and hire charges accrued by hiring out assets also need to find their way to a business’ assessable income.
According to the ATO the tip jar isn’t exempt from being listed either, with tips and gratuities – whether cash or electronic payments – also needing to be listed.
Income that is not necessarily a part of the business’ main function or everyday activities also needs to be included in a business’ assessable income.
Examples of these include disposal of non-trading stock assets, taking some trading stock for your own use and increase in trading stock value.
Businesses that undertake barter transactions such as selling goods and services to receive something other than money in return also need to include the market value of what has been received as payment under assessable income.
Prizes and awards as well as insurance payouts also don’t escape the watchful eye of the ATO with both required to be listed under assessable income.
The pandemic meant the government increased payments and support to a greater number of businesses and individuals.
The payments that are required to be listed under a business’ assessable income include:
- Fuel tax credits or product stewardship (oil) benefit
- Wine equalisation tax producer rebate
- JobKeeper payments (COVID-19)
- Supporting apprentices and trainees wage subsidy (COVID-19)
- Excise refund scheme for alcohol manufacturers
- Grants, such as an amount you receive under the Australian Apprenticeships Incentives Program
- Subsidies for carrying on a business
- Assessable payments you receive from government entities for services you provided or grants you received
However, some government grants and payments are not required to be included such as cash flow boost payments, and other grants, payments and stimulus provided during COVID-19.
Josh Needs
8 July 2022
accountantsdaily.com.au
Hot Issues
- FBT Reminder – Odometer Reading
- ATO’s debts on hold campaign prompts new IGTO guidance
- A comprehensive collection of small business benchmarks
- The 2025 Financial Year tax & super changes you need to know!
- Underperforming employees: When can you terminate?
- A comprehensive list of guides to industry specific tax deductions.
- ‘Renewed concerns’ about economy sees consumer sentiment dip: Westpac
- Oldest Buildings in the World.
- Small businesses may ‘collapse under strain of payday super’, IPA warns
- ATO’s hands tied with scrapping on-hold debts, expert says
- What Drives Your Business Growth and Profits?
- Australian Taxation Office (ATO) shifting to firmer debt collection activity
- Why employee v contractor comes down to fine print
- Sharing economy reporting regime for platform operators
- Countries producing the most solar power by gigawatt hours
- Illegal access nets $637 million
- Accessing superannuation benefits.
- Does your business have a company Power of Attorney?
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- GrantConnect
- 2 in 3 SMEs benefit from instant asset write-off, survey reveals
- Updated guidance on R&D claims
- Do you know how to recover debts?
- Wheat Production by Country
- Types of small business benchmarks
- What is a Commercial Lease?
- ATO warns advisers against suspect R&D tax claims
- The year of workplace law upheaval
- Vimeo test
Article archive
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
What our clients say about us