BOK logo

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

Want to know more?

Do you have a question about something you've read in this article? Need more information? Want to book an appointment? Simply let us know below and we'll get back to you ASAP.

Disclaimer

In the preparation of this website every effort has been made to provide accurate and timely information. However, errors can occur and applicable laws and regulations may change.

The information contained in the site is general and is not intended to serve as advice. No warranty is given as to the reliability of any information.

Users are encouraged to consult with professional advisers for advice before making any decisions that affect their own interests.

Bourke O’Brien Kennedy disclaims all and any liability to any person as to the consequences of anything done or omitted to be done by any person in reliance whether wholly or partially, upon any information contained in this website.

Links on this website are to resources managed by other parties over whom Bourke O’Brien Kennedy has no control. As such, Bourke O’Brien Kennedy accepts no responsibility as to the accuracy of any statement, opinion or advice contained in any of the supplied information and readers should rely on their own enquiries before making any decisions affecting their own interests.

Privacy Policy

We will only use the information you provide to us to respond to your requests and provide you with information about Bourke O’Brien Kennedy services.

Whenever you receive information from us electronically, you will always have an opportunity to request not to receive the information again and your wishes will be respected.

If you send us a curriculum vitae (CV) to apply for a position with Bourke O’Brien Kennedy, we will only use that information to consider you for available opportunities.

We do not share personal information with third parties except as necessary to carry out our business or as required by law or other processes. We do not sell personal information. All personnel with access to personal information ensure to maintain its confidentiality.

If you have questions or comments about anything to do with our website, please do not hesitate to contact us at bok@bok.com.au