Home' Grower : May 2013 Contents The South Australian Grower -- May 2013
of your tax
By MAX OPRAY
THE Australian Tax Office's Kamal Hassan
says there are plenty of things horticulturists
can do to make sure they get on top of their
records as tax time looms.
He said they fell under one of three tax cate-
gories -- individuals, small business and large busi-
ness -- with each facing unique rules and regula-
The ATO does not have a risk profile specific to
"Common mistakes made by individuals that
would be most applicable to farmers are not main-
taining accurate records, incorrectly claiming fuel
tax credits, incorrectly accounting for GST, and
incorrect claims for deductions," Mr Hassan said.
He urges anyone with doubts about how to get
taxed at the right rate to check the ATO website
which has plenty of information for primary pro-
Chief among the problems he has identified is
The ATO advises primary producers to maintain
a small librar y of record books, such as a cash
receipts for keeping track of income, a cash pay-
ments journal for supplier payments, and a wages
record for employees.
Farmers are encouraged to maintain a log book
to substantiate motor vehicle expenses.
When it comes to claiming fuel tax credits, there
is more to it than keeping accurate records. Fuel
tax cannot be claimed for private purposes, nor
when travelling on a public road in vehicles that
weigh less than 4.5 tonnes.
Likewise, fuel credits are not applicable to heavy
diesel vehicles bought before 1996 that fail to
meet environmental criteria.
It is important to apply the correct rate, as the
number of cents reimbursed for every litre can
vary dramatically, depending on what the fuel is
used for and the type of fuel.
For example, duty paid LNG for residential use
only nets a rebate of 2.5c/L whereas kerosene
used as a mould release is eligible for a whopping
GST is another area the ATO identifies as prob-
Those registered for GST need to keep source
records and records of all sales and purchases
regardless of whether they were taxable, GST-free
or input-taxed. These documents should be kept
for five years.
Problems with GST frequently come about
because of problems with a computerised account-
People often use the wrong GST defaults or cod-
ings. For example, they have taxable supplies
coded as non-taxable.
Sometimes formulas in spreadsheets can be acci-
dentally changed, or wrong to begin with.
Another major issue is failing to capture transac-
tions processed outside computerised accounts
payable or receivable systems, such as payments
direct from bank accounts for one-off or unusual
Finally, it is important to keep up with new
changes in the tax system. For instance, Federal
Parliament last year voted that the farm manage-
ment deposit tax concession could be claimed by a
primary production trust even when it reported a
loss for the year.
Any chosen beneficiaries of a primary production
trust are eligible.
Primary producers are being urged to plan ahead for tax time.
Maintain record books
GST problem area
Follow tax rule change
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