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ATO Targets |
The Australian Taxation Office has announced its targets for 2011/12. This summary relates to the Taxation Office's indicated targets for individuals, micro-businesses (turnover up to $2M), small/medium enterprises (turnover $2M to $250M). The key areas that the ATO are closely examining are:
If you have any concerns on any aspects of your taxation affairs, please don't hesitate to contact us.
Cashflow Monitoring is Vital for Success |
When you read about a major American bank losing 20% of its share value overnight, you realise the magnitude of the problem that is facing the world; there is high unemployment in the United States and there are real problems in Europe, particularly with countries such as Spain and Italy, who are now being talked about in the same context as Greece, Ireland and Portugal. All of this could lead to a tightening in the lending position of Australian banks because of the Australian banking systems' reliance on borrowing money from overseas. The Reserve Bank has left the prime bank rate at 4.75% and Dun and Bradstreet has indicated that debtors' days outstanding is now approximately 54 days. Even though this has reduced slightly, it is still well above traditional 30 day payment terms with which many businesses try to operate.
Now is the time to closely monitor the key components of cashflow control. These are:
The analysis of your cashflow position may indicate that you do require additional funding. If this is the case, the quicker you determine whether you're able to introduce additional funding from private resources or need to have a discussion with your bank, the better. We can assist you in these reviews. Please do not hesitate to contact us.
Tax Facts- Pay As You Go (PAYG) |
Pay As You Go (PAYG) Instalments is a system for paying instalments during the income year towards your expected tax liability on your business and investment income. Your actual tax liability is worked out at the end of the income year when your annual income tax return is assessed. Your PAYG instalments for the year are credited against your assessment to determine whether you owe more tax or are owed a refund.
The ATO will contact companies required to pay PAYG instalments, notifying them of their instalment rate. This is calculated according to information in the company's last assessed income tax return.
PAYG instalments are generally paid quarterly, however some taxpayers pay two instalments a year and some have an annual instalment option. The annual instalment is a single, lump sum payment of your PAYG liability for the year. For more information see the PAYG Annual Instalment Fact Sheet. If your company is not eligible to pay an annual instalment, you can pay PAYG instalments quarterly. Each quarter the ATO will send you an activity statement. The due date for lodging this and paying any amounts due will be printed on the statement. This is also the case if you choose the 2-instalment option, which applies to some primary and special professionals (eg sports professionals and authors).
Some companies pay an instalment amount calculated by the ATO, but most companies work out their own instalment amount based on their instalment rate multiplied by their business and investment income. The main advantage of working out your own instalment amount is that your instalments are based on your income as you earn it, instead of a projection based on your previous tax situation.
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