If you’re behind in your taxes you have something in common with Shakespeare.
If you have been wondering what all the fuss is about with Xero, here is a short video that outlines the story.
The Government recently announced that they intend to give the Commissioner of Taxation up to sixty days to hold activity statement refunds – including GST and other indirect taxes such as luxury car tax, wine equalisation tax, etc. – while verifying the claims made. For many businesses, waiting for up to an extra 60 days for the refund will have a major cash flow impact.
***STOP PRESS – It may be too late to take advantage of these new depreciation rules if you haven’t installed your items, ready for use by 31 December 2013. Legislation from the new government that is waiting to go through the Senate will take away these general depreciation rules, effective 1 January 2014, if the Mining Tax Repeal Bill is passed. If it’s not passed then the new rules we explain below, may still apply. ***
When an employer takes extra tax from your wages for your HELP/HECS debt, it’s not kept separate from your normal PAYG withholding tax, it just increases the amount of PAYG Withholding that has been deducted.
At the end of the financial year, when you lodge your tax return, the ATO will work out if you need to pay off some of your HELP/HECS amount and, if so, will add this to the tax you have to pay for the year.
Usually, the total PAYG withheld from your wages is then enough to pay your normal tax and the HELP/HECS payment amount. Sometimes too much will have been deducted by your employer so you will receive a refund of the extra. Sometimes not enough will have been deducted, generally because your employer didn’t know you had a HELP/HECS debt or because you have more than one job, and then you will have to pay extra tax when your tax return is assessed.
It is important to note that when the ATO work out the amount of your repayment for your HELP/HECS debt, they add things like any fringe benefits you have received, any extra super payments you’ve made through salary sacrifice and any investment losses (including rental properties) that have been used to reduce your taxable income.