Money could be king, however there’s all the time GST

Billy’s a tradie and stated he’d been impressed by a narrative on social media a few man who manages to not pay GST and needed accountant GAIL FREEMAN’s assist to do the identical factor.

THE story Billy had been studying on social media quotes a person as saying he asks individuals to pay money, not put it in his checking account after which he doesn’t must pay GST.

“He was complaining that a few of his prospects had agreed to pay money then deposited the cash into his checking account – and he obtained very cross. Can I try this, too, Gail?” Billy requested.

Whoa there, Billy, I stated. The quick reply was “no!” and to try this can be breaking the regulation. 

“The Tax Acts require you to declare all earnings from all sources whether or not earnings tax or GST,” I stated.

“So not producing a tax bill and remitting the GST to the ATO is unlawful. It’s referred to as tax avoidance/evasion. It doesn’t matter whether or not you financial institution the cash or not, it’s nonetheless tax evasion.”

Billy stated: “I simply thought as a result of it was a ‘cashy’, it didn’t matter.”

I replied: “Let’s take into consideration what occurs to the cash the Tax Workplace collects; it will get used for welfare and Centrelink funds, well being, schooling, defence, roads, railways, parks and playgrounds.  

“So should you don’t pay your tax from ‘cashys’ then another person has to pay on your medical prices and your youngsters’ schooling. I do know individuals suppose it doesn’t matter, it’s simply the tax workplace but when everybody did this then our taxes must improve.

“There’s a web page on the ATO web site referred to as ‘Making a tip off’. There’s an on-line type with tick packing containers you may full anonymously. Certainly one of them says: ‘Demanding or paying for work money in hand to keep away from obligations’. So that is clearly one thing that the ATO is worried about.  You may also ring 1800 060062 or ship in a letter.

“It goes on to say, below the heading of considerations you’ll have, ‘you could be provided a reduction for money, a money deal or a ‘cashy’ with no receipt or a reduction for money or mates’ charges’.  This clarifies the standing of a cashy as being tax avoidance/evasion.”

Billy stated “Gosh, I’ve learnt so much right now.”

I stated the shape is easy to finish if it’s good to full one. Yearly the ATO publishes data on the shadow financial system and reminds taxpayers to declare all their earnings.  

The ATO appears to be like to audit taxpayers who haven’t declared all their earnings. They’ll go to court docket and presumably even jail, so it’s not a wise factor to do.  

“The perfect factor I can advocate to you is that you simply concern tax invoices for all the roles you do, even if you’re paid in money.  

“I’d additionally advocate that you simply financial institution any money that you simply obtain in order that your banking appropriately discloses all of your earnings. That makes our job simpler and likewise makes it simpler for you.”

Billy stated: “Thanks Gail. I’m now clear on cashys… and can take extra care with what I learn on social media.”

If you happen to require assist with something tax associated, contact the pleasant crew at Gail Freeman & Co Pty Ltd on 6295 2844, e-mail [email protected] or go to gailfreeman.com.au

Disclaimer
This column incorporates normal recommendation, please don’t depend on it. If you happen to require particular recommendation on this matter please contact Gail Freeman or your skilled adviser.
Authorised Consultant of Lifespan Monetary Planning Pty Ltd AFS Lic No. 229892.