Warning! Tax scams demanding payment of fake debts. Check with us first!
Sophisticated tax scam techniques are being used to defraud Australians.
The scammers use letters, emails or telephone calls pretending to represent the Australian Taxation Office (ATO). Emails can include links to fake websites which look remarkably genuine. The email attachments or links may also contain malware which corrupts your computer system, or 'ransomware' which seeks payment for unlocking access to your computer files.
Typically, the scammers demand payment of fake tax debts, and threaten prosecution or arrest if payment is not made immediately.
Little can be done to stop such scams. The criminals involved are usually based offshore and use techniques which are almost impossible for Australian law enforcement agencies to trace.
As your tax agent, contact from the ATO about your tax affairs should come via our office. Please inform us immediately of any direct contact purporting to be from the ATO and we will seek to verify whether it is genuine. Or you can phone the ATO on 1800 008 540.
Under no circumstances should you pay an alleged tax debt without first talking to us.
Early Stage Innovation Legislation
The Early Stage Innovation legislation was passed by the Australian Senate on Wednesday 4th May 2016 and allows new capital raising opportunities for many businesses.
This legislation will be welcomed by Entrepreneurs wanting to raise capital for their inventions and investors seeking special taxation treatment. Generally, an eligible company would have been formed in the last three years but it could have been formed in the last six years, subject to specific tests on the company's expenditure.
Eligible companies will have:
- expenditure of less than $1M per annum; and
- assessable income of less than $200,000 per annum.
However, any grant funds that have been received from the Accelerating Commercialisation Grant are not included in the assessable income calculation for the company.
Eligible companies must pass a 100 point innovation test relating to one or more of:
- research and development expenditure;
- participant in Accelerating Commercialisation program;
- participant in an approved Accelerator Program;
- has the company raised in-excess of $50,000 in equity capital from arms' length investors;
- has the company registered any patents or plant patents in the previous five years;
- has the company registered any innovation patents or registered designs in the last five years; or
- the company is generally focused on developing for commercialisation one or more new or significantly improved products, processes, services, marketing or organisational methods.
"Retail Investors" (i.e. not a Sophisticated Investor) can invest up to $50,000 per annum per company and there is no restriction on the amount that a "sophisticated investors" can invest ("Sophisticated Investor" can have annual earnings in-excess of $250,000 or net assets worth more than $2.5M).
Investors in an Early Stage Innovation Company will be entitled to a 20% investment rebate up to a maximum of $200,000 rebate per company per annum. They will also be entitled to Capital Gains Tax exemption if they hold the shares in the Early Stage Innovation Company for more than one year and less than ten years.
To be eligible as an Early Stage Innovation Company the companies will also require:
- Business Plans;
- Budgets and Cashflow Forecasts;
- Marketing Plan;
- Intellectual Property Summary;
- Commercialisation Strategy;
- Calculations of share price.
Corporate Governance Is Important
Director's Personal Responsibility
- The Corporation's Act basically applies with equal weight to a director of a major public company as it does to a director of a smaller company. The Parliament has passed legislation for two new types of companies – "crowd funded equity company" and "innovation companies" – which will bring a significant number of new directors into Boards of Directors.
- Directors need to be aware that they need to keep themselves informed as to what's happening in the company. It's very important to read reports prior to meetings, make notes and turn up at the meeting with pre-prepared questions.
- The key recommendation is that the director should be asking questions if they don't understand something. This could include matters such as allocation of liabilities between "current" and "long term liabilities". A couple of years ago, there was a major court case (Centro Group) in which allocation of liabilities (were they long term liabilities or current liabilities?) resulted in significant penalties being awarded by the court against the directors.
- If a director is unsure of the situation, whether it's in a set of financial accounts or in an operating procedure within the company, the director should seek a better explanation from the accountant, auditor, lawyer or other technical experts prior to voting on a motion.
- The director should ensure that, if they're involved directly or indirectly, or any of their immediate family is involved directly or indirectly, on any matter being considered by the Board of Directors, they should declare their interest.
- It's important for directors to respect confidentiality of the director's discussions and in the final analysis if a director is dissatisfied with how the company is operating, or the flow of information to the director, or explanations that have been given, a director should really consider resigning from the Board of Directors because the overall responsibilities of being a director are very onerous.
Regular Monitoring of Financial Performance
Budgets and cashflow forecasts that have been rigorously prepared can be a very valuable tool for a director, when the actual financial accounts are available, because management should be comparing actual financial performance with the financial performance that was projected in the budgets and cashflow forecasts.
Directors should be enquiring as to the reasons for variances as this may indicate that a far too optimistic view was taken in the preparation of the budgets and cashflow forecasts of which directors should be well aware to be mindful of next time the budgets and cashflow forecasts are prepared for the company.