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  • #993175
    stevek53
    Member
    • Total posts: 3

    I have a commercial investment property (an office) & have recently had a Tax Depreciation Schedule produced.
    I have been looking through the annual company tax return document & cannot figure out where (in what sections) the various annual amounts should be placed ie.

    Decline in Value Deductions on Plant – Immediate Deduction & Prime Cost
    Capital Work Deductions – Building & Infrastructure
    Total Annual Deductions

    Other than this, it is a very simple tax return with the only income being rent & the only expense being interest.

    Thanks in advance for any help offered.

    #1190091
    Taxopia
    Member
    • Total posts: 301

    Hi Steve.

    Advice pertaining to completion of company and trust income tax returns is probably beyond the scope of what most qualified members will share here. There are simply too many variables and too many things that can be missed. Whilst it may seem simple to you, unless you are well versed in the requirements of the various Tax Acts and Corporations Act then I would strongly encourage you to engage an accountant to handle this for you. There are affordable solutions out there (like Mr Tax) that a tailored to your requirements.

    Just a heads up for you as well. In most cases now, when an individual applies for a loan of any type (or even the company) the banks will run an ASIC search on that individual to see if they are currently listed as a director of any companies (its a quick search). So if you apply for a home loan and they run a search on you then your company will come up and the bank will ask for accountant prepared financial statements and an accountant prepared (and lodged) company income tax return. In absence of that being available they will generally ask you to get a letter from an accountant confirming that your company is solvent and is not in financial distress (even though the company is not party to the loan). I can tell you then very few accountants will prepare and sign these letters without knowledge of the client because the risk is too high (the bank is shifting liability to the accountant). So generally what ends up happening is the individual has to get an accountant to reconstruct some financial reports from limited data (not easy) on an urgent basis. This tends to happen at an inopportune time and is not cheap. We see this issue quite regularly. Something to be aware of if you are considering self lodging.

    Regards
    Alex

    #1190092
    stevek53
    Member
    • Total posts: 3
    MrTax, post: 223346, member: 68601 wrote:
    Hi Steve.

    Advice pertaining to completion of company and trust income tax returns is probably beyond the scope of what most qualified members will share here. There are simply too many variables and too many things that can be missed. Whilst it may seem simple to you, unless you are well versed in the requirements of the various Tax Acts and Corporations Act then I would strongly encourage you to engage an accountant to handle this for you. There are affordable solutions out there (like Mr Tax) that a tailored to your requirements.

    Just a heads up for you as well. In most cases now, when an individual applies for a loan of any type (or even the company) the banks will run an ASIC search on that individual to see if they are currently listed as a director of any companies (its a quick search). So if you apply for a home loan and they run a search on you then your company will come up and the bank will ask for accountant prepared financial statements and an accountant prepared (and lodged) company income tax return. In absence of that being available they will generally ask you to get a letter from an accountant confirming that your company is solvent and is not in financial distress (even though the company is not party to the loan). I can tell you then very few accountants will prepare and sign these letters without knowledge of the client because the risk is too high (the bank is shifting liability to the accountant). So generally what ends up happening is the individual has to get an accountant to reconstruct some financial reports from limited data (not easy) on an urgent basis. This tends to happen at an inopportune time and is not cheap. We see this issue quite regularly. Something to be aware of if you are considering self lodging.

    Regards
    Alex

    Thank you for your advice & insights.
    I have had a couple of quotes from accountants but for processing 12 deposits, 12 payments & 12 bank fee transactions per year, a $700 to $1,200pa fee seems a little bit rich.
    No offence to the accounting profession, but it seems that by having unduly complex returns, the ATO is simply guaranteeing work for the profession.
    In this case, pretty well all annual profit (non-capital gain) would simply be expended on a tax return.
    As an aside, I called the ATO for advice & was pleasantly surprised by the great service.
    Unfortunately, one of my questions resulted in the service person having to go off & check & even then the advice was not emphatic.
    The point is, that surely with the amount of funds flowing through the ATO they could invest in an ‘expert system’ for their phone staff to use & then why not make it available on-line for everyone to use.
    These days there are YouTube clips on just about anything you can imagine …. except (apparently) how to fill out a tax return !
    I think I read somewhere about the incredible % of businesses that are delinquent in their returns.
    I feel certain that the cost, complexity & lack of “how to” help is a significant contributor to the ATO’s delinquency rate.
    Anyway …… I will check out the Mr Tax website.

    Many thanks
    Steve

    #1190093
    Taxopia
    Member
    • Total posts: 301

    Hi Steve.

    It’s probably best to point the blame for our complex tax system on the lawmakers (politicians) rather than the law administrators (ATO). Our tax regime contains a vast (endless) minefield of every changing tax legislation and associated cases and decisions. I take your point above but I can assure you that, as the saying goes “you don’t know what you don’t know”. Qualified accountants spend many years at university and post grad (then intensive CPA or CA certification) BEFORE they even start their career and lifelong learning process. Add the expertise that allows us to consider the nuances of each subtly different situation and you get a fairly labour intensive highly skilled requirement. There are many other industries where the same applies.
    So I think it’s a case with the ATO that they are deliberately not creating a platform for online preparation and lodgement of company and trust tax returns because of the implications. In particular the standard of compliance would be significant impaired. It would be like allowing people to build a home without a building surveyor (and or engineer) checking that everything has been built in accordance with our expansive building code. The safety of buildings would generally suffer. In the case of tax returns the Government purse would likely suffer.

    Anyway I hear your pain and we have certainly endeavoured to create some professional company tax return and trust tax return solutions at Mr Tax that reduce the handholding and reduce the cost. We have a CPA / CA team and office based in Melbourne. Unlike some of our competitors we don’t outsource – primarily because of supervision and security concerns.

    Regards
    Alex

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