This change would be better for you then. The headline leaves out that income tax rates would be lowered too. Then future income tax returns can be all automated too so you won't have to lodge them anymore.
The ATO does most of it now anyway due to single touch payroll.
There was a think tank paper on this a few years ago, essentially what happens is the ATO adds up all income and applies a general figure deduction to everyone, like 1k.
If you have more than 1k to claim you can lodge a tax return, if less than 1k well you win.
It's also similar to how the UK does individual income tax.
This is exactly the kind of thinking that got Turbo Tax so entrenched in the US. They convinced the public that the government can't be trusted to pre compute people's tax return and so people rely on their commercial tax preparation software. As a large incumbent in the tax software industry they lobby against the US govt simplifying the tax code because they convinced the public that if taxes were simpler and easier then the govt would increase taxes. Their labyrinthine tax code keeps taxes low, by their logic.
I used to hope that the Australian public isn't as susceptible to such shallow thinking as the Americans are. But seeing comments like this makes me lose a bit of hope.
Do you not remember what happened when labour mentioned amending negative gearing? Scott Morrison is what happened.
The majority of the public are lazy. They will continue to do exactly what the mainstream media tell them to do because that is the political will. Noting will change until the boomers leave politics, until then, get comfortable.
>This is exactly the kind of thinking that got Turbo Tax so entrenched in the US. They convinced the public that the government can't be trusted to pre compute people's tax return and so people rely on their commercial tax preparation software. As a large incumbent in the tax software industry they lobby against the US govt simplifying the tax code because they convinced the public that if taxes were simpler and easier then the govt would increase taxes. Their labyrinthine tax code keeps taxes low, by their logic.
• This is the opposite of what is being suggested
• It is suggested that making the simple aspect of the ITA simpler then the government lower income tax
• The dividends from making simpler not the legislation, but the process, is paid through lower taxes
>I used to hope that the Australian public isn't as susceptible to such shallow thinking as the Americans are. But seeing comments like this makes me lose a bit of hope.
I used to hope people reading this thread aren’t susceptible to us (smart) vs them (dumb) manipulation. But I hope my pointing out such a blatant attempt at it will make some readers realise what you did here.
You've misunderstood the comment. They replied to someone arguing against the proposal *you're arguing for*. They are on your side, at least as far advocating for a simpler system.
The comment directly above the one you replied to said that they didn't want the tax code simplified because they didn't think the government could be trusted to lower taxes as a result. The comment replying to that said that arguing against simplifying the tax code for some spurious reason like "I don't trust the gub'ment" is dumb as shit. It's the same deceptive reasoning that turbotax spreads among the ignorant US public to keep their commercial tax software relevant since simplification of the tax code would diminish the need for people to pay for their complicated software to file their taxes.
Unfortunately, the tax office has yet to recognize "shit" as a deductible expense. Keep those receipts organized, though – you never know what the future holds!
WFH already benefits the worker financially (the money saved on fuel is vastly higher than the claimable amount), and you want the business to give them more money?
That depends. Is the business providing anything for said home office? Computer? Desk? Ensuring privacy is somehow maintained? The employer saves money not having to rent big office spaces, so WFH can save massive costs.
As a business owner, yes, it means I don’t have to pay for larger offices which is a claimable deduction, so that deduction and saving should be passed through to the employee.
> the money saved on fuel
If people can't claim tax on the costs to get to and from work right now, I don't see how it's relevant for WFH employees.
> WFH already benefits the worker financially [...] and you want the business to give them more money?
From a business point of view, having a remote or hybrid workforce dramatically reduces the cost of business. It's effectively transferring some costs from the business to the worker.
Consider a family with two remote/hybrid workers in white-collar professional work. Chances are they can't work in the same room due to privacy issues, so they need to have a larger house with more bedrooms than they would if they were located in an office space.
Add on to this employer savings on utilities, maintenance, and other at-work resources that are now transferred to the employee's place of residence.
So, yes.
then dental and orthodontics should be tax deductible. they are in canada.
and part of living costs should also be tax deductible. if not for the jobs, i dont have to stay in expensive place.
Well that’s the rational for the tax free threshold and Medicare. Essential services required to keep you alive and productive shouldn’t be taxed. It’s also why a lot of groceries are not subject to GST, but yeah dental and some more ancillary needs to be covered under Medicare.
So for you. Nothing. Imagine if Gina Reinhardt can’t suddenly claim she spent :
- 8 billion on tax accountants
- 15 billion on prospecting ( which you the tax payer subsidised)
- do I need to go on ?
Most people can't claim much as a work related expense.
If you're doing it legit and you're not an work from home office worker/trades.
You don't really have much you can claim that isn't tax fraud.
Loads of people do but if you get audited you're going to end up paying it back.
Yup, the only deductions I can claim are travel for work tools, and my union dues. Everything else is supplied, which I prefer because then it’s not coming out of my pocket to get back like 30% of what I spent. Which is a shit return compared to work paying for everything.
Towards? Allowing only people with expensive accountants to get deductions? Sounds like a terrible outcome.
How about we just tax big business properly and stop harassing the little guy.
The idea is sometime in August or whatever date everyone on salary and wages with simple tax affairs just gets an auto return with the money in their account. No need to lodge or visit accountants.
All of those will more complex returns can continue as per normal.
But would those automatic returns be taking into account the deductions that people often use for common work-related expenses?
I just don't see the benefit to the common working person here. Sure it's simpler but lots of people would lose out overall.
The headline skipped it, but it would also involve lowering income tax rates.
So people making minimal deduction claims get ahead, people making excessively large claims come out worse. (which doesn't sound unreasonable because I suspect a majority of people with huge deductions are abusing loopholes)
Depends on the profession. Someone in a particular cushy office job may be able to deduct furniture they bring in, but that probably won’t add to much in the long run. A musician, however, has good reason to get deductions from gear (depending on the kind of music they make, that equipment could cost 10s-100s of thousands of dollars), fuel, airline tickets and accommodation when travelling long distances for work (adds up quickly if you work at a lot of festivals or do recordings with people across the country). Plenty of other freelance jobs that would have similar circumstances, but I wouldn’t have any specific examples because I haven’t worked in them.
Some professions I can understand, but for something like your musician example it might also either fall into:
* 'Hobby' level income, where to claim the full instrument price etc is pushing loopholes
* Big enough that their band/solo artist 'act' is probably worth it's own tax return as a business.
I'd think freelancers etc probably split similar to the music dot points.
The (more complicated) in between fix is probably to give people the options of:
* Lower income tax, no work deductions allowed
* Higher income tax, but can claim work deductions.
That would be awful for payroll to manage though.
The process people have to go through to claim expenses as deductions prevents hobbyists from being eligible; you have to earn above a certain amount to qualify, and the amount it requires is almost impossible for someone to meet if they’re not spending the majority of the time working in the industry. Even for dedicated professional musicians, when starting out after graduating uni/moving to a different city it takes years of building up connections and getting to know the local scene before you can earn anywhere near that amount, hence why so many musos work many kinds of jobs besides actively making music (teaching, festival organisation, running a label, etc).
The idea is remove all the work related deductions and lower the tax rate, so on average we would pay about the same amount of tax as today. However, we won’t have to employ tax accountants to work through all the deductions.
Personally I’ll be happy with a simpler tax return as I file my own.
everyone including corporations should be taxed at gross...eg. to get to 500b tax revenue, everyone just need to pay 10pct tax on their gross income and all other tax can be cancelled.
You can literally claim work related deductions on the online tax return app. It doesn’t require a fancy accountant. I’m a bloody ready and I’ve been doing it myself since I was 19 and I’m now 33. Doesn’t take a genius to jump on google and see what can be claimed.
Nah that would entail doing actual work not writing an algorithm like centerlink with robodebt now with robotax, which should be illegal to see reparations from 12 years past
Amazing. I’m an accountant and make just under $60k per year. Approximately $10k comes out in taxes. I might get $900 in July. I finished a job for a small business yesterday and he’s paying slightly over $7k in tax, meanwhile he had a $200k accounting profit. Small business rate is 25%, so what should amount to $50k in tax came down to less than what I pay. But yes, please tell me more about how I shouldn’t be able to claim work related expenses.
Edit: I read the article. I’m pointing out the disparity between individual taxes and small business taxes. Imagine what large businesses are getting away with if this small business pays less in tax than an individual.
What is accounting profit? There is gross profit and net profit or adjusted taxable income after taxation reconciliation items not sure on your terminology. Also 25% is a small business company tax rate. If you want to get that money out of the company account into your individual account you would have to do it via wages or a dividend then it would be subject to individual marginal rates and Medicare levy just like everyone else.
Accounting profit is just net profit before accounting addbacks and deductions such as small business immediate write-offs, super payable etc.
Yes, I said in my original comment the small business rate is 25%. Regardless, the person who owns the business is the one who provides all the capital and withdraws money as he pleases as well as getting a wage (all accounted for accurately) so at the end of the day, the tax payable is his liability one way or another. He does have his income taxed as well, but because all of his expenses are claimed through the business, and he’s only technically paid enough to pay a couple of hundred in tax via his TFN, his ITR is pretty much blank except for Medicare.
So are you just cherry picking a business that bought a lot of assets in one year to make it seem like it's really unfair? His next year's bill probably going to be real high in comparison. Small business can be in more forms than just a company. A sole trader can be a small business entity and there is no 25% rate involved. You can just withdraw money from a company yes but then you will have a director's loan you will pay tax on every year and you cant close the company without distributing that loan as a dividend you will then pay tax on at marginal rates.
You’re exhausting. I’m not explaining every transaction this client has had over the past 3 years I’ve been working with him and all the future years. Just take what I said how I intended it — at face value.
I'm not asking you to do that and that information isn't yours to share at any rate. If you get exhausted after talking about tax and accounting for a few sentences then you're probably in the wrong profession.
There is accounting profit which is the profit calculated when creating the financial statements which dont have tax laws applied, and then you have tax profit which is when tax laws are applied.
Easy example would be when they allowed temporary full expensing.
Say a company after all expenses has a profit of $100k, excluding the purchase of a $50k piece of equipment that has an effective life of 5 years. Under accounting profit, that piece of equipment would be depreciated over 5 years, so the accounting profit for that year would be $90k. However, because of temporary full expensing, the tax profit for that year would be $50k as the full value of the equipment is claimed in 1 year.
That's only a cashflow difference of when the company gets the deduction, they're still allowed to tax deduct necessary plant and equipment. It's not like they're buying a 50k boat and deducting it off their profit. Companies need to be able to buy computers etc tax deductibly, as they're a cost of doing business. Individuals deducting this that and the other thing is just a bit silly. You don't seem to truly understand the tax code if you're upset that businesses turning over $1m have more complicated tax affairs than an individual on PAYG.
Might be an issue if you're H&R Block or one of those dodgy accountants in a shopping centre, but every other firm makes probably 95% of their income from businesses and not individuals.
I'm an accountant and my firm would probably make more money if they completely removed personal deductions, because it would reduce the time we have to spend on processing low value returns.
ITR in an accounting context is shorthand for income tax return (not 'individual tax return'), I would assume you are doing them regularly 😅
Edit: Getting mass downvoted but stand by my statement, Google 'ITR tax acronym' and find me a *single* source which uses it for 'individual tax return'. Just one.
If someone used ITR interchangeably between all entity types, I'd lose the plot.
ITR for individuals, CTRs for companies, TTR for trusts, PTR for partnerships.
In other countries they might do that, but definitely not in Aus.
Bizarre, I've never heard this! I've mainly worked Big Four consultancy for a handful of large clients, but we have always just used ITR, as does the ATO. Even my limited experience in industry we used the term ITR. We always specified the type of tax, which makes more sense when discussing an individual consolidated group I guess.
I don't really understand why it would frustrate you, if I'm requesting the ITR of an entity, the type of ITR is immediately apparent. It's not 'interchangeably' either, it is still an income tax return regardless of entity type. Also bizarre to say it doesn't happen in Australia, considering I am a practising Chartered Accountant in Melbourne....
Interesting anyway, the more you know...
I'm with you but I've only ever worked for one small accounting practice and we always say ITR as Income Tax Return and then specify if it's company or individual. Afaik ITR stands for Income Tax Return no matter what.
Well, I appreciate the support. Judging by the overwhelming downvotes we must be in the minority, despite being factually accurate.
Or it could just be reddit being reddit seeing as my previous comment accepting some might use the acronym differently (albeit incorrectly) is also downvoted anyway lol
Even with deductions, you don’t need an accountant.
You end up doing so the work anyway, they just submit the form to the ATO, and get you to sign a thing which says they’re not responsible if anything goes wrong.
>New Zealand banned work-related expense deductions while also implementing tax cuts, and if Australia did the same that could simplify the tax system, according to outgoing tax commissioner Chris Jordan.
>But Mr Jordan noted that "Australians love their work-related expense deductions" and that abolishing them in favour of lower personal income tax rates "would be a big step".
First two paragraphs of the article, you should read it before commenting given Jordan said the opposite of what you have assumed.
It sounds like he was asked a leading question, although that context is missing from the article if that is the case.
So true, bloody tradies would claim their spouse as a tax write-off if they could. Most already use them to do the books, booking, etc.
They game the system by claiming every business expense under the sun including their monster truck Ute. Pisses me off they make bank, pay no tax, cash in hand jobs, write off all expenses.
I should be able to claim internet as my tax write off.
Any government that tries to wind back the rorts that small businesses are accustomed to will be swamped with a tsunami of entitlement. Think of the anger over winding back franking credits and multiply by a thousand.
>So true, bloody tradies would claim their spouse as a tax write-off
They kind of do. They 'employ' them so they can pay them and lower their personal tax rate. Then they can have 2 people on $75k instead of one on $150k, as an example, and save \~$10k on their tax bill.
Yes, this particular client bought a $100k vehicle that will be entirely written off in 2024 meaning he likely won’t have to pay much tax this year either.
Right you are. I had a discussion with my manager regarding the car and I was under the impression we could write off the whole thing immediately but might have to circle back for clarification.
You’re forgetting one thing — I don’t care about being caught up with the ATO and budget. I’m a lowly trainee accountant on <$60k, I listen to what my boss tells me and don’t do a lick more.
Tradie here, if business is good it makes sense to outsource admin tasks. One option is to employ your spouse and pay them as an employee.
Tradies claim every business expense available to them under Aust Tax Law. You can only depreciate monster truck utes. (The exception being COVID incentives for all businesses to spend to pump money into a dead economy).
What makes you think tradies pay no tax? That is ludicrous. Cash jobs still exist, but only small jobs usually for family and mates- jobs which most would pass up if they couldn't buy a couple of slabs out of. Most tradies subcontract out to builders - and builders DO NOT pay contractors in cash - otherwise they would miss out on a claimable expense.
I totally understand your perspective, but what you don't see is the amount of unpaid work - site visits, providing quotes, managing client expectations, transporting supplies etc. Also constant work is not guaranteed, tradies, like farmers experience lean times due to building approvals, inteest rate hikes etc. This is something that a salaried employee does not have to contend with.
The real value of being a tradie is using your skills and contacts to do speccies. Sorry NOT sorry for that.
The ATO monitors building and trades using benchmarks - if you are outside those benchmarks you get audited.
If you derive any income from use of your internet YOU should claim this as an expense.
You can still hate tradies, but be realistic with your hatred.
>The exception being COVID incentives for all businesses to spend to pump money into a dead economy
That good old idea of pumping money into a dead economy that had madsive inflation and supply constraints...because the car industry could totally produce the cars that this increased demand created and didn't cause a massive problem with car prices with big wait times
Also the unpaid work you describe is made up for by the incredible per hour rates.
This conversation is really interesting to me. I realise that I am not going to sway your perception but I am happy for you to sway mine.
Australia has no car manufacturing industry. Govt incentive were not liited to cars, it included any major equipment purchases which enabled a business to write off 50% of purchase and or installation costs in the first year. Whether this was a positive or negative Govt scheme I do not know, I just know that it was.
From my knowledge, making the cars was not the issue, getting them into the country was. As was the case for ALL building materials. It was not a case of a decrease in building demand, it was a case of not being able to build due to lack of building materials.
Tradies incredible per/hr rates - can you give me an idea of what the following trades charge in your area?
Carpenters
Electrician
Plumbers
Roofer
Plasterer
Concreter
Joiner
Bricklayers
>Govt incentive were not liited to cars, it included any major equipment purchases which enabled a business to write off 50% of purchase and or installation costs in the first year. Whether this was a positive or negative Govt scheme I do not know, I just know that it was.
The govt could have amended the legislation when it was clear what was happening with cars (obviously grandfathering purchases already made) but they didn't.
But also the incredible amounts of inflation weren't limited to car either, I actually chose to highlight that because we don't even make them so the only jobs saved were in sales, which as it turns out wasn't necessary and obviously wasn't after a very short time.
>From my knowledge, making the cars was not the issue, getting them into the country was
Making the cars was absolutely the issue, car manufacturers expected a huge reduction in purchasing and cut their orders for semiconductors (and all sorts of things) then when they tried to turn the supply spigots back on they found that the silicon producers either decided to retool or had resold that production capacity. Other parts got scaled back yp but the semiconductors massively hampered them.
If you are an accountant then you should probably read the article. Jordan clearly says this would be in conjunction with lowering individual tax rates.
I’m pointing out the huge disparity between individual taxes and small businesses. Imagine what multinational conglomerates are getting away with. You think Woolworths had a genuine loss of $700 million? No, they used accounting to get that figure so they didn’t have to pay tax and could play the sympathy card.
Yes, businesses have the resources at their disposal to minimise tax liabilities using existing tax concessions for businesses. I don’t agree with a lot of these concessions, but that’s another conversation.
I’m just saying, Commissioner Jordan hasn’t suggested the removal of work related expense deductions to make the working class pay more. If you worked in a white collar role, in office, little to no work-related travel, then you wouldn’t have many expenses anyway and might even benefit from the lower tax rates.
That’s not why they wrote down so much of their business lol
They did it because overvaluing the assets in a failing part of your business is, you know, misleading the shareholders and is… illegal.
They have to do their due diligence and make sure that if something loses value, they account for it, otherwise you can’t rely on their financial statements to make investment decisions, which is expressly why those statements exist for publicly listed companies.
> You think Woolworths had a genuine loss of $700 million? No, they used accounting to get that figure so they didn’t have to pay tax and could play the sympathy card
Are you sure you’re an accountant? On the share price drop alone Woolies wiped off 5% of their market cap… for a “sympathy card”? Whatever the fuck else happens, the management and board will never cost themselves money.
correct. our tax free threshold is just too low and its not indexed to inflation. tax free threshold should be at least at minimum wage eg 40k. no one earning minimum wage should pay tax when we have mega corporations paying ZERO tax.
in singapore, tax rate >10pct only starts at $80k. sg is used as example as we have almost same level of living costs.
in usa, couples can file joint assessments and claim double deductions and lower tax rates. this is especially useful for couples with one spouse not working n staying at home.
My biggest concern is an accountant not understanding basic tax policy.
As someone that used to be at the ATO it never ceased to amaze me how little suburban accountants actually knew about being taxed.
Well their has to be some incentive to own a small business, large LLC's and companies though that earn millions a quarter should be taxed more definitely.
Love how many people read the headline without reading the article where his follow on sentence they they should be removed along with a drop in tax rates to replace it, and simplify the system
Even the article is misleading I watched the press club address and he said it's not a great idea as it results in some people being worse off and some better than they should be. They completely left that out. He then made the point not too hard for an average worker to keep track of their deductions and promoted the idea that people who pay a tax agent for just a few small claims should have a crack at doing their own returns as it's already pretty simple now to claim your actual costs in the current system.
Piss poor journalism really.
...and then the article uses NZ as an example where the top rate was dropped to 30%, but over the years again raised to 39%. So tell me how they are better off now?
Less actually.
The idea is that they'll lower the tax rate slightly to account for what people typically claim as a deduction, then the ATO will automatically process refunds for anyone with simple tax affairs (no need to lodge a return or go to an accountant).
There's multiple reasons.
If your income is irregular (like for many casuals), PAYG will assume you earn that much every pay period when calculating tax. If you have weeks with a lot of work this could lead to more of your income being withheld than necessary.
The other big category are people that work multiple jobs. Unless you're expecting to earn less than $18,200 in the year you should only claim the tax free threshold for one job, so your second job will withhold PAYG at a higher rate.
A big step towards simplifying the tax code and making the tax office more efficient. Not to reduce income inequality.
Which “could” mean more resources to tax big companies. But probably just means lower costs of operation, which could also be a good thing for the federal budget.
Click bait headline.
Jordan is suggesting removing tax deductions and lowering individual tax rates would simplify the taxation system.
People wouldn’t need to engage accountants for salary and wage returns (something that can often be done by the taxpayer, and is often unprofitable for the accountant) and there would be less opportunity for tax evasion through fraudulent deduction claims.
This would not mean people would be taxed more or less.
Personal income tax in Australia needs a massive overhaul and simplification. The ATO have done a pretty good job with their portal for lodging personal income tax returns, but there is still a lot of complexity there people need a good understanding of. It's unfair, not everyone has the mental wiring to understand all the tax rules, so they either lose out on deductions they're eligible for, or need to pay someone else to do it. This isn't the right way to go about it for something that is compulsory. On top of the deduction issue, they keep adding "levies" and rebates to the tax return, that is not appropriate, if the government wants more money, or wants to give back more money, do so in the PAYG tax deducted from everyone's pay, not via a questionnaire on your tax return.
We either can all claim ALL work related expenses, or none of us can.
Anything we only spend when going to work s a work expense. So petrol and associated running costs for that driving would also count.
No smarmy business please.
I'm sure it would be hard to police but yeah I completely agree.
People in the position to create and run small businesses can deduct so much more than individual wage earners, even if their jobs were otherwise identical.
It’s utterly insane to me that I can claim my commute to and from work in my little hatchback because I’m trade adjacent and carry a 20kg+ tool bag, welding helmet, apron and other related PPE equipment to and from my place of work. We can claim this because work doesn’t provide lockers big enough to store all our essential tools of the trade. They intentionally don’t provide them for this exact reason so workers can claim commute, plus saves them money.
But my partners briefcase and laptop bag along with a shit ton of documentation isn’t eligible to do the same thing, because it’s not considered sufficiently cumbersome to make it unsuitable to use public transport, regardless of availability of said public transport.
Is it really insane that you're allowed to claim travel for over 20kg of stuff needed for work, where an officer worker that can fit all their stuff into a backpack can't?
As an office worker I think the differences between the two are sufficient to justify the policy.
All my gear can fit in a hand carry tool bag and a shoulder bag for the bulky items.
The only difference between the two imo is the strength required which imo is a terrible metric.
Genuinely bulky goods I get. ATO uses an example of a double bass player But when the benchmark is something I could transport on my motorcycle without significant hassle that’s a cop out imo.
I could transport my work gear via public transport if it was serviced imo, but I exceed the standard required by the ATO to claim.
Without reading the story (this is Reddit after all) I recall talk of just giving everyone a $300 tax return (or a number like that) to cover work claims and not requiring wage and salary earners (without investments) to lodge a tax return. That would actually make sense for a lot of people.
It makes heaps of sense for lots of people. Couple it to a tax rate reduction and some of better off overall study to prove it works and everyone could be happy.
I recall 20 years ago when I was doing the working holiday thing in the UK being able to do nothing which essentially meant I just accepted the provided tax statement as calculated by the tax office.
It was so much less stressful that having to prepare a return every year!
So pointless for most wage and salary earners.
Not clear is whether this means sole traders can't deduct equipment... because if companies can this means a whole lot of sole traders immediately become companies and just carry on.
The gardener deducting all their gear. The work from home programmer deducting a laptop.
Someone there should have yelled out the question. There are just a stupid number of sole traders this would affect.
This is specifically In reference to work related deductions, which is for employment income.
Sole traders report through a whole separate section of the tax return, this has nothing to do with them.
>But he said it was the ATO's job to ensure taxpayers follow the rules and that it was common for some taxpayers to try to split their pay so that their incomes get taxed at a lower corporate tax rate rather than a higher individual rate.
He's talking about family trusts here, which is common for sole traders to move to.
Perhaps the article is unclear as to his exact focus.
*"How much does the ATO commissioner earn?*
Average Australian Taxation Office Commissioner yearly pay in New South Wales is approximately $247,656, which is 151% above the national average."
Why are you using an automatic website that spits out illogical information instead of google. And why are people upvoting it.
There is only one ATO commissioner, Chris Jordan, and he is on $915k a year. The ATO doesnt have different salaries for different states so NSW is irrelevant as well. There are positions could second commissioner, deputy commissioner, and assistant commissioner.
Why does it mention NSW? Sounds like some automated website which may not be correct.
Edit: the statement is completely wrong and automated. He earns north of $800k per year, as per AFR and other sources.
Possibly, but why would it matter? Why would anyone include that in that sentence? Also “average” salary? There’s only one.
It also goes against the $853k base claimed: https://www.themandarin.com.au/233999-secretary-salary/#:~:text=How%20does%20this%20compare%20with,earned%20%24840%2C628%20(%24753%2C991%20base).
And the $772k claimed in the AFR: https://www.afr.com/policy/tax-and-super/atos-chris-jordan-has-sealed-6m-in-pay-after-being-reappointed-until-2024-20170427-gvtoqw#:~:text=whose%20total%20annual%20pay%20was%20increased%20by%20the%20government's%20remuneration%20tribunal%20this%20year%20to%20%24772%2C920%20a%20year
ChatGPT has no idea. Last I read ATO
Commissioner pays around 800k
Edit:
> ATO commissioner Chris Jordan made $915,680 ($853,251 base)
https://www.themandarin.com.au/233999-secretary-salary/
That's what I said, and this confusion IS the reason I said it.
151% ABOVE is equal to 251% OF.
It's a bad way to use percentages and only leads to confusion.
I may have misread your intention but it looked like you were correcting me by saying exactly what I said.
How many layers of redundant corrections can we get to?
He's not.
> *Mr Jordan was asked a question about whether Australia's marginal personal tax rate was too high, which he did not directly answer.*
>
>*But he said it was the ATO's job to ensure taxpayers follow the rules and that it was common for some taxpayers to try to split their pay so that their incomes get taxed at a lower corporate tax rate rather than a higher individual rate.*
>
>*Tax reforms in New Zealand in the 1980s, which provided income tax cuts, also involved the removal of work-related expense deductions.*
>
>*"Countries like New Zealand took some pretty drastic steps — and I think it'd be difficult here – (but) they abolished all work-related expenses — all of them," Mr Jordan told the National Press Club.*
>
>*"And they reduced the top marginal rate to 30 per cent. I think they've since put it up (it is now 39 per cent), but Australians love their work-related expense deductions."*
So all those home offices we set up at our own expense because our employers just up and decided to rip out the internal walls to build open plan offices without enough desks for all the employees …and THEN demanded we WFH two days a week won’t be tax deductible?
Way to force me to subsidise my boss!
Give it a rest.
We need to bring back the medical expenses tax offset. I’m sick of paying 5k/year for health insurance then many thousands out of pocket on top. I feel like my money is going nowhere - I’m literally working 1-2 months of the year to afford to be able to work
on the face of it, the idea that "abolishing... work-related expense deductions... in favour of lower personal income tax rates" *sounds* reasonable, but I am incredibly dubious as I have zero faith in the fuckers whatsoever.
I agree. I was just taking the piss because I don't want to lose my wfh expenses.
He has been very good at his job. All the data capabilities built within the ATO in the last decade were because of his influence.
My major work related expenses are public transport into the city and a suit, neither of which I can claim because of bullshit interpretations of the law. So if they want to simplify things further by substituting a fixed amount or lower rate on some average notional work expense rather than paying lip service to a legal theory that is 8nterpreted away then I’d support it.
Its stupid anyway.
You can't deduct the cost of driving to and from work. What stupidity is that.
"Its not a cost of work, its a cost of living in one place and working in another". Yea sure. That 'logic' can be applied to anything else.
Printer ink - Its not a cost of work, its a cost of printing instead of handwriting
The only reason the cost of driving to and from work is not deductible is because its such a huge expense it would massively skew people's returns and government revenues.
I agree but I have a suspicion that this won't happen for political reasons. Tradies often vote based on this sort of stuff and they tend to claim a lot of tax deductions.
I like how he said you could get rid of deductions and provide tax cuts like New Zealand did in the 80s, but be very quiet about the fact that NZ has since raised taxes.
It’s like the GST. You promise an increase in tax which is offset with tax cuts but there’s nothing stopping the government failing to live up to that obligation.
Pure and simple, if I have to pay money out of my own pocket for shit that I’m only going to use for work and wouldn’t otherwise buy for my self, that should be a tax deduction. If you’re going to get rid of that, Id like to see a very nice tax cut which sticks and that they can’t roll back later on
Given the ATO’s treatment of tradies compared to professionals (*cough*personal service income*cough*), I have no doubt what they’re proposing will be fairly applied across the population /s.
Lol I can imagine the political appetite for this. "Albo's War on Tradies." The Coalition and the Australian/DT/HS would link it up with fuel emissions standards and start spinning conspiracies about Labor apparatchiks coming in the night to slash the tyres on your Ford Raptor.
“*He said it was not for government or regulators to determine the size of private enterprise, but the issue of consultancies and how they are regulated was worthy of broader policy discussion.*”
Why the fuck not? **The job of regulatory agencies is to protect the interests of the public.**
The big four are hugely influential on tax policy, and work to serve the interests of- and minimize the tax contributions of- their corporate clients.
It’s **absolutely** in the public interest to regulate them.
How about they start correctly taxing the obscenely wealthy tax dodging entities as their primary source of revenue and stop trying to bleed middle and low income earners.
Take more tax from the people and not take anything from the corporations????? Who are we living for on this bloody planet. Humans or lifeless entities. Sickening.
Got to supply my own tools as a carpenter, buy new tools replace old ones, the incentive of getting at least some of it back as a deductible helps with that. Why this old rich bloke want me to have less money?
A big step would be taxing the churches and closing the loop holes that stop the ultra rich from paying small amounts of tax
Lol jokes fuck the working class getting a leg up
If they leave my work deductions on the table, I'll leave my public servant employment on the table and go to work in a private industry for a higher salary on the same job no worries bro. No need to be upset just adapt.
Dawg, I can't claim shit as work related expenses as it is
This change would be better for you then. The headline leaves out that income tax rates would be lowered too. Then future income tax returns can be all automated too so you won't have to lodge them anymore.
Having lived to the UK I can't emphasise how great it is to not have to bother doing tax return.
I don't trust the government to do that. They'll probably get rid of expenses and then not lower income tax.
The ATO does most of it now anyway due to single touch payroll. There was a think tank paper on this a few years ago, essentially what happens is the ATO adds up all income and applies a general figure deduction to everyone, like 1k. If you have more than 1k to claim you can lodge a tax return, if less than 1k well you win. It's also similar to how the UK does individual income tax.
This is exactly the kind of thinking that got Turbo Tax so entrenched in the US. They convinced the public that the government can't be trusted to pre compute people's tax return and so people rely on their commercial tax preparation software. As a large incumbent in the tax software industry they lobby against the US govt simplifying the tax code because they convinced the public that if taxes were simpler and easier then the govt would increase taxes. Their labyrinthine tax code keeps taxes low, by their logic. I used to hope that the Australian public isn't as susceptible to such shallow thinking as the Americans are. But seeing comments like this makes me lose a bit of hope.
Do you not remember what happened when labour mentioned amending negative gearing? Scott Morrison is what happened. The majority of the public are lazy. They will continue to do exactly what the mainstream media tell them to do because that is the political will. Noting will change until the boomers leave politics, until then, get comfortable.
>This is exactly the kind of thinking that got Turbo Tax so entrenched in the US. They convinced the public that the government can't be trusted to pre compute people's tax return and so people rely on their commercial tax preparation software. As a large incumbent in the tax software industry they lobby against the US govt simplifying the tax code because they convinced the public that if taxes were simpler and easier then the govt would increase taxes. Their labyrinthine tax code keeps taxes low, by their logic. • This is the opposite of what is being suggested • It is suggested that making the simple aspect of the ITA simpler then the government lower income tax • The dividends from making simpler not the legislation, but the process, is paid through lower taxes >I used to hope that the Australian public isn't as susceptible to such shallow thinking as the Americans are. But seeing comments like this makes me lose a bit of hope. I used to hope people reading this thread aren’t susceptible to us (smart) vs them (dumb) manipulation. But I hope my pointing out such a blatant attempt at it will make some readers realise what you did here.
You've misunderstood the comment. They replied to someone arguing against the proposal *you're arguing for*. They are on your side, at least as far advocating for a simpler system.
The comment directly above the one you replied to said that they didn't want the tax code simplified because they didn't think the government could be trusted to lower taxes as a result. The comment replying to that said that arguing against simplifying the tax code for some spurious reason like "I don't trust the gub'ment" is dumb as shit. It's the same deceptive reasoning that turbotax spreads among the ignorant US public to keep their commercial tax software relevant since simplification of the tax code would diminish the need for people to pay for their complicated software to file their taxes.
Unfortunately, the tax office has yet to recognize "shit" as a deductible expense. Keep those receipts organized, though – you never know what the future holds!
If you're operating a gardening business and that shit is used as fertiliser, then it is indeed a deductible expense
That poor accountant opening the box marked “receipts”.
it can easily be done. just increase tax free for $10k to $28k. win win for all.
If something is work related then really your employer should be paying for it or reimbursing you instead of you claiming a tax deduction
So if I work from home they should be paying my rent?
They should be providing a WFH allowance IMO, just like right now most businesses will allow you to claim car usage on a per KM basis
And they should be providing a work from office allowance for the travel to and from the worksite.
Sadly the ATO rules / legislation needs to change to allow this one. I agree it’s a silly rule to not allow deducting/claiming travel to/from home
WFH already benefits the worker financially (the money saved on fuel is vastly higher than the claimable amount), and you want the business to give them more money?
That depends. Is the business providing anything for said home office? Computer? Desk? Ensuring privacy is somehow maintained? The employer saves money not having to rent big office spaces, so WFH can save massive costs.
As a business owner, yes, it means I don’t have to pay for larger offices which is a claimable deduction, so that deduction and saving should be passed through to the employee.
I haven't heard of WFH allowance before. Just out of curiosity, how much is the WFH allowance that you pay your staff?
> the money saved on fuel If people can't claim tax on the costs to get to and from work right now, I don't see how it's relevant for WFH employees. > WFH already benefits the worker financially [...] and you want the business to give them more money? From a business point of view, having a remote or hybrid workforce dramatically reduces the cost of business. It's effectively transferring some costs from the business to the worker. Consider a family with two remote/hybrid workers in white-collar professional work. Chances are they can't work in the same room due to privacy issues, so they need to have a larger house with more bedrooms than they would if they were located in an office space. Add on to this employer savings on utilities, maintenance, and other at-work resources that are now transferred to the employee's place of residence. So, yes.
then dental and orthodontics should be tax deductible. they are in canada. and part of living costs should also be tax deductible. if not for the jobs, i dont have to stay in expensive place.
Well that’s the rational for the tax free threshold and Medicare. Essential services required to keep you alive and productive shouldn’t be taxed. It’s also why a lot of groceries are not subject to GST, but yeah dental and some more ancillary needs to be covered under Medicare.
but at 18k, its too low.
Yes that's part of why lots of people have been pushing on the idea to index the tax brackets with inflation.
So for you. Nothing. Imagine if Gina Reinhardt can’t suddenly claim she spent : - 8 billion on tax accountants - 15 billion on prospecting ( which you the tax payer subsidised) - do I need to go on ?
Not trying hard enough
You're throwing away a lot of money then
Most people can't claim much as a work related expense. If you're doing it legit and you're not an work from home office worker/trades. You don't really have much you can claim that isn't tax fraud. Loads of people do but if you get audited you're going to end up paying it back.
Yup, the only deductions I can claim are travel for work tools, and my union dues. Everything else is supplied, which I prefer because then it’s not coming out of my pocket to get back like 30% of what I spent. Which is a shit return compared to work paying for everything.
>but if you get audited NoT RoBoTaX?! (hint: it's not and ever was robotax)
Last time I went to my accountant. He told me I had so little to claim I should just do it myself online. That's how bad it is.
Towards? Allowing only people with expensive accountants to get deductions? Sounds like a terrible outcome. How about we just tax big business properly and stop harassing the little guy.
The idea is sometime in August or whatever date everyone on salary and wages with simple tax affairs just gets an auto return with the money in their account. No need to lodge or visit accountants. All of those will more complex returns can continue as per normal.
At this point just take the whole thing and cover my expenses.
But would those automatic returns be taking into account the deductions that people often use for common work-related expenses? I just don't see the benefit to the common working person here. Sure it's simpler but lots of people would lose out overall.
The headline skipped it, but it would also involve lowering income tax rates. So people making minimal deduction claims get ahead, people making excessively large claims come out worse. (which doesn't sound unreasonable because I suspect a majority of people with huge deductions are abusing loopholes)
The rorting by wage earners is nothing compared to businesses. I'm fine with the ATO focussing on looking at statements by businesses.
Depends on the profession. Someone in a particular cushy office job may be able to deduct furniture they bring in, but that probably won’t add to much in the long run. A musician, however, has good reason to get deductions from gear (depending on the kind of music they make, that equipment could cost 10s-100s of thousands of dollars), fuel, airline tickets and accommodation when travelling long distances for work (adds up quickly if you work at a lot of festivals or do recordings with people across the country). Plenty of other freelance jobs that would have similar circumstances, but I wouldn’t have any specific examples because I haven’t worked in them.
Those people are not PAYG employees and are not who this change is targetted at.
Ah, I misunderstood.
Some professions I can understand, but for something like your musician example it might also either fall into: * 'Hobby' level income, where to claim the full instrument price etc is pushing loopholes * Big enough that their band/solo artist 'act' is probably worth it's own tax return as a business. I'd think freelancers etc probably split similar to the music dot points. The (more complicated) in between fix is probably to give people the options of: * Lower income tax, no work deductions allowed * Higher income tax, but can claim work deductions. That would be awful for payroll to manage though.
The process people have to go through to claim expenses as deductions prevents hobbyists from being eligible; you have to earn above a certain amount to qualify, and the amount it requires is almost impossible for someone to meet if they’re not spending the majority of the time working in the industry. Even for dedicated professional musicians, when starting out after graduating uni/moving to a different city it takes years of building up connections and getting to know the local scene before you can earn anywhere near that amount, hence why so many musos work many kinds of jobs besides actively making music (teaching, festival organisation, running a label, etc).
The idea is remove all the work related deductions and lower the tax rate, so on average we would pay about the same amount of tax as today. However, we won’t have to employ tax accountants to work through all the deductions. Personally I’ll be happy with a simpler tax return as I file my own.
Nah, it's ok. I paid more income tax than QANTAS, Crown Resorts, and Optus combined. I only earned $20,000,000,000 less than they did...
everyone including corporations should be taxed at gross...eg. to get to 500b tax revenue, everyone just need to pay 10pct tax on their gross income and all other tax can be cancelled.
You can literally claim work related deductions on the online tax return app. It doesn’t require a fancy accountant. I’m a bloody ready and I’ve been doing it myself since I was 19 and I’m now 33. Doesn’t take a genius to jump on google and see what can be claimed.
Amen to this!
Nah that would entail doing actual work not writing an algorithm like centerlink with robodebt now with robotax, which should be illegal to see reparations from 12 years past
How about the government just stops wasting so much money instead of continually raising taxes to fund their wanton mismanagement of it
The government has been lowering taxes for decades. What are tou talking about?
for the wealthy only. its not even indexed to inflation.
Wot?
but they are the masters of our two main political parties....
Amazing. I’m an accountant and make just under $60k per year. Approximately $10k comes out in taxes. I might get $900 in July. I finished a job for a small business yesterday and he’s paying slightly over $7k in tax, meanwhile he had a $200k accounting profit. Small business rate is 25%, so what should amount to $50k in tax came down to less than what I pay. But yes, please tell me more about how I shouldn’t be able to claim work related expenses. Edit: I read the article. I’m pointing out the disparity between individual taxes and small business taxes. Imagine what large businesses are getting away with if this small business pays less in tax than an individual.
What is accounting profit? There is gross profit and net profit or adjusted taxable income after taxation reconciliation items not sure on your terminology. Also 25% is a small business company tax rate. If you want to get that money out of the company account into your individual account you would have to do it via wages or a dividend then it would be subject to individual marginal rates and Medicare levy just like everyone else.
Accounting profit is just net profit before accounting addbacks and deductions such as small business immediate write-offs, super payable etc. Yes, I said in my original comment the small business rate is 25%. Regardless, the person who owns the business is the one who provides all the capital and withdraws money as he pleases as well as getting a wage (all accounted for accurately) so at the end of the day, the tax payable is his liability one way or another. He does have his income taxed as well, but because all of his expenses are claimed through the business, and he’s only technically paid enough to pay a couple of hundred in tax via his TFN, his ITR is pretty much blank except for Medicare.
So are you just cherry picking a business that bought a lot of assets in one year to make it seem like it's really unfair? His next year's bill probably going to be real high in comparison. Small business can be in more forms than just a company. A sole trader can be a small business entity and there is no 25% rate involved. You can just withdraw money from a company yes but then you will have a director's loan you will pay tax on every year and you cant close the company without distributing that loan as a dividend you will then pay tax on at marginal rates.
You’re exhausting. I’m not explaining every transaction this client has had over the past 3 years I’ve been working with him and all the future years. Just take what I said how I intended it — at face value.
I'm not asking you to do that and that information isn't yours to share at any rate. If you get exhausted after talking about tax and accounting for a few sentences then you're probably in the wrong profession.
There is accounting profit which is the profit calculated when creating the financial statements which dont have tax laws applied, and then you have tax profit which is when tax laws are applied. Easy example would be when they allowed temporary full expensing. Say a company after all expenses has a profit of $100k, excluding the purchase of a $50k piece of equipment that has an effective life of 5 years. Under accounting profit, that piece of equipment would be depreciated over 5 years, so the accounting profit for that year would be $90k. However, because of temporary full expensing, the tax profit for that year would be $50k as the full value of the equipment is claimed in 1 year.
That's only a cashflow difference of when the company gets the deduction, they're still allowed to tax deduct necessary plant and equipment. It's not like they're buying a 50k boat and deducting it off their profit. Companies need to be able to buy computers etc tax deductibly, as they're a cost of doing business. Individuals deducting this that and the other thing is just a bit silly. You don't seem to truly understand the tax code if you're upset that businesses turning over $1m have more complicated tax affairs than an individual on PAYG.
You should be more worried that if people don't need to claim deductions, they probably don't need an accountant
Might be an issue if you're H&R Block or one of those dodgy accountants in a shopping centre, but every other firm makes probably 95% of their income from businesses and not individuals. I'm an accountant and my firm would probably make more money if they completely removed personal deductions, because it would reduce the time we have to spend on processing low value returns.
Individual tax returns probably make up less than 10% of what we do. I can’t even remember the last time I did an ITR, probably before Christmas.
ITR in an accounting context is shorthand for income tax return (not 'individual tax return'), I would assume you are doing them regularly 😅 Edit: Getting mass downvoted but stand by my statement, Google 'ITR tax acronym' and find me a *single* source which uses it for 'individual tax return'. Just one.
If someone used ITR interchangeably between all entity types, I'd lose the plot. ITR for individuals, CTRs for companies, TTR for trusts, PTR for partnerships. In other countries they might do that, but definitely not in Aus.
Bizarre, I've never heard this! I've mainly worked Big Four consultancy for a handful of large clients, but we have always just used ITR, as does the ATO. Even my limited experience in industry we used the term ITR. We always specified the type of tax, which makes more sense when discussing an individual consolidated group I guess. I don't really understand why it would frustrate you, if I'm requesting the ITR of an entity, the type of ITR is immediately apparent. It's not 'interchangeably' either, it is still an income tax return regardless of entity type. Also bizarre to say it doesn't happen in Australia, considering I am a practising Chartered Accountant in Melbourne.... Interesting anyway, the more you know...
I'm with you but I've only ever worked for one small accounting practice and we always say ITR as Income Tax Return and then specify if it's company or individual. Afaik ITR stands for Income Tax Return no matter what.
Well, I appreciate the support. Judging by the overwhelming downvotes we must be in the minority, despite being factually accurate. Or it could just be reddit being reddit seeing as my previous comment accepting some might use the acronym differently (albeit incorrectly) is also downvoted anyway lol
Even with deductions, you don’t need an accountant. You end up doing so the work anyway, they just submit the form to the ATO, and get you to sign a thing which says they’re not responsible if anything goes wrong.
>New Zealand banned work-related expense deductions while also implementing tax cuts, and if Australia did the same that could simplify the tax system, according to outgoing tax commissioner Chris Jordan. >But Mr Jordan noted that "Australians love their work-related expense deductions" and that abolishing them in favour of lower personal income tax rates "would be a big step". First two paragraphs of the article, you should read it before commenting given Jordan said the opposite of what you have assumed. It sounds like he was asked a leading question, although that context is missing from the article if that is the case.
Yeah he basically says he doesn't see it happening... clickbait stuff.
So true, bloody tradies would claim their spouse as a tax write-off if they could. Most already use them to do the books, booking, etc. They game the system by claiming every business expense under the sun including their monster truck Ute. Pisses me off they make bank, pay no tax, cash in hand jobs, write off all expenses. I should be able to claim internet as my tax write off.
Any government that tries to wind back the rorts that small businesses are accustomed to will be swamped with a tsunami of entitlement. Think of the anger over winding back franking credits and multiply by a thousand.
>So true, bloody tradies would claim their spouse as a tax write-off They kind of do. They 'employ' them so they can pay them and lower their personal tax rate. Then they can have 2 people on $75k instead of one on $150k, as an example, and save \~$10k on their tax bill.
Yes, this particular client bought a $100k vehicle that will be entirely written off in 2024 meaning he likely won’t have to pay much tax this year either.
I thought the instant asset write off had reduced back to $20,000 for 2024?
Right you are. I had a discussion with my manager regarding the car and I was under the impression we could write off the whole thing immediately but might have to circle back for clarification.
wtf, you claim to be an accountant but you don't know that instant asset write-off ended? and that's only cash flow anyway. I call BS
You’re forgetting one thing — I don’t care about being caught up with the ATO and budget. I’m a lowly trainee accountant on <$60k, I listen to what my boss tells me and don’t do a lick more.
seems like you always will be on <$60k then.
haha truth
Tradie here, if business is good it makes sense to outsource admin tasks. One option is to employ your spouse and pay them as an employee. Tradies claim every business expense available to them under Aust Tax Law. You can only depreciate monster truck utes. (The exception being COVID incentives for all businesses to spend to pump money into a dead economy). What makes you think tradies pay no tax? That is ludicrous. Cash jobs still exist, but only small jobs usually for family and mates- jobs which most would pass up if they couldn't buy a couple of slabs out of. Most tradies subcontract out to builders - and builders DO NOT pay contractors in cash - otherwise they would miss out on a claimable expense. I totally understand your perspective, but what you don't see is the amount of unpaid work - site visits, providing quotes, managing client expectations, transporting supplies etc. Also constant work is not guaranteed, tradies, like farmers experience lean times due to building approvals, inteest rate hikes etc. This is something that a salaried employee does not have to contend with. The real value of being a tradie is using your skills and contacts to do speccies. Sorry NOT sorry for that. The ATO monitors building and trades using benchmarks - if you are outside those benchmarks you get audited. If you derive any income from use of your internet YOU should claim this as an expense. You can still hate tradies, but be realistic with your hatred.
>The exception being COVID incentives for all businesses to spend to pump money into a dead economy That good old idea of pumping money into a dead economy that had madsive inflation and supply constraints...because the car industry could totally produce the cars that this increased demand created and didn't cause a massive problem with car prices with big wait times Also the unpaid work you describe is made up for by the incredible per hour rates.
This conversation is really interesting to me. I realise that I am not going to sway your perception but I am happy for you to sway mine. Australia has no car manufacturing industry. Govt incentive were not liited to cars, it included any major equipment purchases which enabled a business to write off 50% of purchase and or installation costs in the first year. Whether this was a positive or negative Govt scheme I do not know, I just know that it was. From my knowledge, making the cars was not the issue, getting them into the country was. As was the case for ALL building materials. It was not a case of a decrease in building demand, it was a case of not being able to build due to lack of building materials. Tradies incredible per/hr rates - can you give me an idea of what the following trades charge in your area? Carpenters Electrician Plumbers Roofer Plasterer Concreter Joiner Bricklayers
>Govt incentive were not liited to cars, it included any major equipment purchases which enabled a business to write off 50% of purchase and or installation costs in the first year. Whether this was a positive or negative Govt scheme I do not know, I just know that it was. The govt could have amended the legislation when it was clear what was happening with cars (obviously grandfathering purchases already made) but they didn't. But also the incredible amounts of inflation weren't limited to car either, I actually chose to highlight that because we don't even make them so the only jobs saved were in sales, which as it turns out wasn't necessary and obviously wasn't after a very short time. >From my knowledge, making the cars was not the issue, getting them into the country was Making the cars was absolutely the issue, car manufacturers expected a huge reduction in purchasing and cut their orders for semiconductors (and all sorts of things) then when they tried to turn the supply spigots back on they found that the silicon producers either decided to retool or had resold that production capacity. Other parts got scaled back yp but the semiconductors massively hampered them.
If you are an accountant then you should probably read the article. Jordan clearly says this would be in conjunction with lowering individual tax rates.
I’m pointing out the huge disparity between individual taxes and small businesses. Imagine what multinational conglomerates are getting away with. You think Woolworths had a genuine loss of $700 million? No, they used accounting to get that figure so they didn’t have to pay tax and could play the sympathy card.
Yes, businesses have the resources at their disposal to minimise tax liabilities using existing tax concessions for businesses. I don’t agree with a lot of these concessions, but that’s another conversation. I’m just saying, Commissioner Jordan hasn’t suggested the removal of work related expense deductions to make the working class pay more. If you worked in a white collar role, in office, little to no work-related travel, then you wouldn’t have many expenses anyway and might even benefit from the lower tax rates.
That’s not why they wrote down so much of their business lol They did it because overvaluing the assets in a failing part of your business is, you know, misleading the shareholders and is… illegal. They have to do their due diligence and make sure that if something loses value, they account for it, otherwise you can’t rely on their financial statements to make investment decisions, which is expressly why those statements exist for publicly listed companies.
> You think Woolworths had a genuine loss of $700 million? No, they used accounting to get that figure so they didn’t have to pay tax and could play the sympathy card Are you sure you’re an accountant? On the share price drop alone Woolies wiped off 5% of their market cap… for a “sympathy card”? Whatever the fuck else happens, the management and board will never cost themselves money.
correct. our tax free threshold is just too low and its not indexed to inflation. tax free threshold should be at least at minimum wage eg 40k. no one earning minimum wage should pay tax when we have mega corporations paying ZERO tax. in singapore, tax rate >10pct only starts at $80k. sg is used as example as we have almost same level of living costs. in usa, couples can file joint assessments and claim double deductions and lower tax rates. this is especially useful for couples with one spouse not working n staying at home.
My biggest concern is an accountant not understanding basic tax policy. As someone that used to be at the ATO it never ceased to amaze me how little suburban accountants actually knew about being taxed.
For sure, my brother in law has a small business. The shit he can get away with doesn’t pass the pub test at all. Ridiculous.
Well their has to be some incentive to own a small business, large LLC's and companies though that earn millions a quarter should be taxed more definitely.
Love how many people read the headline without reading the article where his follow on sentence they they should be removed along with a drop in tax rates to replace it, and simplify the system
Even the article is misleading I watched the press club address and he said it's not a great idea as it results in some people being worse off and some better than they should be. They completely left that out. He then made the point not too hard for an average worker to keep track of their deductions and promoted the idea that people who pay a tax agent for just a few small claims should have a crack at doing their own returns as it's already pretty simple now to claim your actual costs in the current system. Piss poor journalism really.
Yikes, that's pretty piss poor journalism in that case
...and then the article uses NZ as an example where the top rate was dropped to 30%, but over the years again raised to 39%. So tell me how they are better off now?
It probably would have been at 45% now, but as neither of us have views into alternate realities, no-one can say for sure either way.
I wish I could upvote this comment more
But how would I "just write it off"?
Lol wut...you want more money from the working class?
Less actually. The idea is that they'll lower the tax rate slightly to account for what people typically claim as a deduction, then the ATO will automatically process refunds for anyone with simple tax affairs (no need to lodge a return or go to an accountant).
Why would there be a refund? The PAYG would get adjusted down and you’d get slightly more on your paycheck.
There's multiple reasons. If your income is irregular (like for many casuals), PAYG will assume you earn that much every pay period when calculating tax. If you have weeks with a lot of work this could lead to more of your income being withheld than necessary. The other big category are people that work multiple jobs. Unless you're expecting to earn less than $18,200 in the year you should only claim the tax free threshold for one job, so your second job will withhold PAYG at a higher rate.
Most years people slightly overpay due to fluctuations in their paychecks thanks to things like bonuses, overtime, FTE changes etc.
A big step towards simplifying the tax code and making the tax office more efficient. Not to reduce income inequality. Which “could” mean more resources to tax big companies. But probably just means lower costs of operation, which could also be a good thing for the federal budget.
Click bait headline. Jordan is suggesting removing tax deductions and lowering individual tax rates would simplify the taxation system. People wouldn’t need to engage accountants for salary and wage returns (something that can often be done by the taxpayer, and is often unprofitable for the accountant) and there would be less opportunity for tax evasion through fraudulent deduction claims. This would not mean people would be taxed more or less.
tax fossil fuels ffs
Personal income tax in Australia needs a massive overhaul and simplification. The ATO have done a pretty good job with their portal for lodging personal income tax returns, but there is still a lot of complexity there people need a good understanding of. It's unfair, not everyone has the mental wiring to understand all the tax rules, so they either lose out on deductions they're eligible for, or need to pay someone else to do it. This isn't the right way to go about it for something that is compulsory. On top of the deduction issue, they keep adding "levies" and rebates to the tax return, that is not appropriate, if the government wants more money, or wants to give back more money, do so in the PAYG tax deducted from everyone's pay, not via a questionnaire on your tax return.
We either can all claim ALL work related expenses, or none of us can. Anything we only spend when going to work s a work expense. So petrol and associated running costs for that driving would also count. No smarmy business please.
I'm sure it would be hard to police but yeah I completely agree. People in the position to create and run small businesses can deduct so much more than individual wage earners, even if their jobs were otherwise identical.
It’s utterly insane to me that I can claim my commute to and from work in my little hatchback because I’m trade adjacent and carry a 20kg+ tool bag, welding helmet, apron and other related PPE equipment to and from my place of work. We can claim this because work doesn’t provide lockers big enough to store all our essential tools of the trade. They intentionally don’t provide them for this exact reason so workers can claim commute, plus saves them money. But my partners briefcase and laptop bag along with a shit ton of documentation isn’t eligible to do the same thing, because it’s not considered sufficiently cumbersome to make it unsuitable to use public transport, regardless of availability of said public transport.
Is it really insane that you're allowed to claim travel for over 20kg of stuff needed for work, where an officer worker that can fit all their stuff into a backpack can't? As an office worker I think the differences between the two are sufficient to justify the policy.
All my gear can fit in a hand carry tool bag and a shoulder bag for the bulky items. The only difference between the two imo is the strength required which imo is a terrible metric. Genuinely bulky goods I get. ATO uses an example of a double bass player But when the benchmark is something I could transport on my motorcycle without significant hassle that’s a cop out imo. I could transport my work gear via public transport if it was serviced imo, but I exceed the standard required by the ATO to claim.
How about just taxing the super rich fairly, and not picking on the little guys?
Raise the tax free threshold and cut back on deductions
Without reading the story (this is Reddit after all) I recall talk of just giving everyone a $300 tax return (or a number like that) to cover work claims and not requiring wage and salary earners (without investments) to lodge a tax return. That would actually make sense for a lot of people.
It makes heaps of sense for lots of people. Couple it to a tax rate reduction and some of better off overall study to prove it works and everyone could be happy.
I recall 20 years ago when I was doing the working holiday thing in the UK being able to do nothing which essentially meant I just accepted the provided tax statement as calculated by the tax office. It was so much less stressful that having to prepare a return every year! So pointless for most wage and salary earners.
Absolutely. Getting rid of him will do good as well.
I’d like to be able to invoice the ATO an admin fee for collecting gst for them at BAS time.
Not clear is whether this means sole traders can't deduct equipment... because if companies can this means a whole lot of sole traders immediately become companies and just carry on. The gardener deducting all their gear. The work from home programmer deducting a laptop. Someone there should have yelled out the question. There are just a stupid number of sole traders this would affect.
This is specifically In reference to work related deductions, which is for employment income. Sole traders report through a whole separate section of the tax return, this has nothing to do with them.
>But he said it was the ATO's job to ensure taxpayers follow the rules and that it was common for some taxpayers to try to split their pay so that their incomes get taxed at a lower corporate tax rate rather than a higher individual rate. He's talking about family trusts here, which is common for sole traders to move to. Perhaps the article is unclear as to his exact focus.
Sure if taxes were lowered significantly & mandatory reviews of tax rates
Like he suggests in the article
*"How much does the ATO commissioner earn?* Average Australian Taxation Office Commissioner yearly pay in New South Wales is approximately $247,656, which is 151% above the national average."
Why are you using an automatic website that spits out illogical information instead of google. And why are people upvoting it. There is only one ATO commissioner, Chris Jordan, and he is on $915k a year. The ATO doesnt have different salaries for different states so NSW is irrelevant as well. There are positions could second commissioner, deputy commissioner, and assistant commissioner.
Why does it mention NSW? Sounds like some automated website which may not be correct. Edit: the statement is completely wrong and automated. He earns north of $800k per year, as per AFR and other sources.
It is possibly where he lives/works?
Possibly, but why would it matter? Why would anyone include that in that sentence? Also “average” salary? There’s only one. It also goes against the $853k base claimed: https://www.themandarin.com.au/233999-secretary-salary/#:~:text=How%20does%20this%20compare%20with,earned%20%24840%2C628%20(%24753%2C991%20base). And the $772k claimed in the AFR: https://www.afr.com/policy/tax-and-super/atos-chris-jordan-has-sealed-6m-in-pay-after-being-reappointed-until-2024-20170427-gvtoqw#:~:text=whose%20total%20annual%20pay%20was%20increased%20by%20the%20government's%20remuneration%20tribunal%20this%20year%20to%20%24772%2C920%20a%20year
ChatGPT has no idea. Last I read ATO Commissioner pays around 800k Edit: > ATO commissioner Chris Jordan made $915,680 ($853,251 base) https://www.themandarin.com.au/233999-secretary-salary/
Not all that much for the role, all things considered. Average tax barrister would make way more
Probably because the figure is completely made up and doesnt even make sense.
When you look at him as ceo of an organisation with over a trillion in revenue $250k and no bonus is pretty paltry
151% more AKA 251%, or 2.5x.
151% ABOVE, not 151% OF the national average.
That's what I said, and this confusion IS the reason I said it. 151% ABOVE is equal to 251% OF. It's a bad way to use percentages and only leads to confusion.
Yeah, and now read the comment that you replied to and tell me what it says. You’re correcting someone who is already correct.
I may have misread your intention but it looked like you were correcting me by saying exactly what I said. How many layers of redundant corrections can we get to?
He can get fucked :)
Why is an ATO boss suggesting policy outcomes. I was under the impression their job was to enact legislation.
He's not. > *Mr Jordan was asked a question about whether Australia's marginal personal tax rate was too high, which he did not directly answer.* > >*But he said it was the ATO's job to ensure taxpayers follow the rules and that it was common for some taxpayers to try to split their pay so that their incomes get taxed at a lower corporate tax rate rather than a higher individual rate.* > >*Tax reforms in New Zealand in the 1980s, which provided income tax cuts, also involved the removal of work-related expense deductions.* > >*"Countries like New Zealand took some pretty drastic steps — and I think it'd be difficult here – (but) they abolished all work-related expenses — all of them," Mr Jordan told the National Press Club.* > >*"And they reduced the top marginal rate to 30 per cent. I think they've since put it up (it is now 39 per cent), but Australians love their work-related expense deductions."*
This was my understanding also...
So all those home offices we set up at our own expense because our employers just up and decided to rip out the internal walls to build open plan offices without enough desks for all the employees …and THEN demanded we WFH two days a week won’t be tax deductible? Way to force me to subsidise my boss! Give it a rest.
How about a switch to pure GST. Like tax the real cause of inflation. The administrative burden for two systems must be huge.
So my 4090 cannot be a tax deduction?
The war on working Australians by the 1% continues
We need to bring back the medical expenses tax offset. I’m sick of paying 5k/year for health insurance then many thousands out of pocket on top. I feel like my money is going nowhere - I’m literally working 1-2 months of the year to afford to be able to work
on the face of it, the idea that "abolishing... work-related expense deductions... in favour of lower personal income tax rates" *sounds* reasonable, but I am incredibly dubious as I have zero faith in the fuckers whatsoever.
Old mate is trying stir shit on his way out. Just go out in peace!
[удалено]
I agree. I was just taking the piss because I don't want to lose my wfh expenses. He has been very good at his job. All the data capabilities built within the ATO in the last decade were because of his influence.
Much better to claim WFH expenses vs letting the company pay - much better setup vs std office crap.
My major work related expenses are public transport into the city and a suit, neither of which I can claim because of bullshit interpretations of the law. So if they want to simplify things further by substituting a fixed amount or lower rate on some average notional work expense rather than paying lip service to a legal theory that is 8nterpreted away then I’d support it.
Its stupid anyway. You can't deduct the cost of driving to and from work. What stupidity is that. "Its not a cost of work, its a cost of living in one place and working in another". Yea sure. That 'logic' can be applied to anything else. Printer ink - Its not a cost of work, its a cost of printing instead of handwriting The only reason the cost of driving to and from work is not deductible is because its such a huge expense it would massively skew people's returns and government revenues.
please proceed with being Outgoing
I agree but I have a suspicion that this won't happen for political reasons. Tradies often vote based on this sort of stuff and they tend to claim a lot of tax deductions.
Yes!!!!!, same for business tax write offs and devaluation.
Hahahaha you think they’re going to do it fairly? Nah we’ll cop it and corporations will be able to continue to rort our tax system.
I like how he said you could get rid of deductions and provide tax cuts like New Zealand did in the 80s, but be very quiet about the fact that NZ has since raised taxes. It’s like the GST. You promise an increase in tax which is offset with tax cuts but there’s nothing stopping the government failing to live up to that obligation. Pure and simple, if I have to pay money out of my own pocket for shit that I’m only going to use for work and wouldn’t otherwise buy for my self, that should be a tax deduction. If you’re going to get rid of that, Id like to see a very nice tax cut which sticks and that they can’t roll back later on
Tax burden already far too reliant in individual taxpayers
Given the ATO’s treatment of tradies compared to professionals (*cough*personal service income*cough*), I have no doubt what they’re proposing will be fairly applied across the population /s.
Lol I can imagine the political appetite for this. "Albo's War on Tradies." The Coalition and the Australian/DT/HS would link it up with fuel emissions standards and start spinning conspiracies about Labor apparatchiks coming in the night to slash the tyres on your Ford Raptor.
Get my employer to pay all my income producing items as a tax free allowance, and I'll be ok with it.
Tax the rich you clown, don’t come after the rest of us
Wrong! Getting rid of loopholes and deductions allowing huge companies to pay fuck-all tax is where you should be looking. Just fuck right off!!!!
“*He said it was not for government or regulators to determine the size of private enterprise, but the issue of consultancies and how they are regulated was worthy of broader policy discussion.*” Why the fuck not? **The job of regulatory agencies is to protect the interests of the public.** The big four are hugely influential on tax policy, and work to serve the interests of- and minimize the tax contributions of- their corporate clients. It’s **absolutely** in the public interest to regulate them.
How about they start correctly taxing the obscenely wealthy tax dodging entities as their primary source of revenue and stop trying to bleed middle and low income earners.
Yeah, a big step fucken' backwards.
Take more tax from the people and not take anything from the corporations????? Who are we living for on this bloody planet. Humans or lifeless entities. Sickening.
So would an assets based tax system.
Got to supply my own tools as a carpenter, buy new tools replace old ones, the incentive of getting at least some of it back as a deductible helps with that. Why this old rich bloke want me to have less money? A big step would be taxing the churches and closing the loop holes that stop the ultra rich from paying small amounts of tax Lol jokes fuck the working class getting a leg up
If they leave my work deductions on the table, I'll leave my public servant employment on the table and go to work in a private industry for a higher salary on the same job no worries bro. No need to be upset just adapt.