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Do You Use Company Money Or Assets
Alan Law • March 16, 2021
Your company is a separate legal entity from you as a director or shareholder. The money your business earns and its assets belong to the company.
It’s important to keep appropriate records and correctly report transactions if you use company money or assets. Fox example:
• take money out of your company for yourself or your family
• receive money from it (for example, as a director, shareholder or an associate)
• use your company’s assets for private purposes
You may do it through, for example:
• salary, wages or director’s fees
• repayments of a loan you have previously made to the company
• a fringe benefit, such an employee using a company car
• dividends
• a loan from the company
Not correctly reporting and keeping appropriate records for transactions can result in an unfranked deemed dividend being included in your assessable income.
If you realize that you’re not correctly reporting these transactions or keeping appropriate records, talk to a registered tax professional and make sure that you correctly report the use of company money or assets in your next tax return.
If you have made a mistake or left something out of your previous tax returns, you can lodge an amendment.
Contact ACP Accountants today, your Sydney business accountants.
With the holiday season kicking off, you may be planning a celebration with your staff. Consider if fringe benefits tax (FBT) may apply or you could end up with an unexpected FBT liability. Before you hire a restaurant or book an event, make sure you work out if the benefits you provide your employees are considered entertainment related and if they’ll attract fringe benefits tax (FBT). This will depend on: the amount you spend on each employee when and where your celebration is held who attends - is it just employees? Or are partners, clients and suppliers also invited? the value and type of gifts you provide If you do provide entertainment-related fringe benefits, keep the right records to support this so you can calculate their taxable value. It's important to get on top of how FBT works before you provide perks and extras. Otherwise, you may end up with an unexpected FBT liability. For more information, please contact your Sydney business accountants – ACP Accountants on 02-80467621, or simply get in touch and email us at info@acpaccountants.net.au.
One of the many responsibilities SMSF trustees have every income year is valuing your fund's asset at market value. Each year you need to value your SMSFs assets and provide supporting evidence to your auditor. The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing your fund's accounts, statements and SMSF annual return (SAR). Your asset valuations will be reviewed by your approved SMSF auditor as part of the annual audit prior to lodgment of your SAR. Your auditor will check that assets have been valued correctly, assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets. Make sure you get your valuations done before going to your auditor. It's your responsibility to provide objective and supportable evidence to your auditor for the valuation of the fund's assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgment of your annual return or a contravention if mistakes have been made. Start researching now to find what type of evidence your need to support the valuation as this can take time. For some asset types the law requires valuations to be undertaken by a qualified independent valuer. For further information, please contact Sydney Business Accountants – ACP Accountants on 02-80467621, or simply email us at info@acpaccountants.net.au.
Two Western Australian directors were recently convicted for failing to have a director ID. Both directors were fined $5,000 in the Perth Magistrates Court on 3 May 2024, for failing to comply with director identification requirements. The maximum penalty for failure to comply is currently a fine of $18,780. The Magistrate stated the director ID service had been enacted for a proper public purpose and considerable efforts had been made by government agencies to bring the accused’s attention to the service and comply. All directors are required to verify their identity with the Australian Business Registry Services (ABRS) and apply for their director ID prior to being appointed as a director. Please note that directors must apply for their director ID themselves. The fastest way is to apply online at ABRS.gov.au. If a director is unable to apply online, you can phone ABRS on 13 62 50. For more information about who needs a director ID and how to apply, visit ABRS.gov.au. If you have any questions, please contact your accountant/tax professionals, or contact us today on 02-8046 7621, your local Sydney business accountants.
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With the holiday season kicking off, you may be planning a celebration with your staff. Consider if fringe benefits tax (FBT) may apply or you could end up with an unexpected FBT liability. Before you hire a restaurant or book an event, make sure you work out if the benefits you provide your employees are considered entertainment related and if they’ll attract fringe benefits tax (FBT). This will depend on: the amount you spend on each employee when and where your celebration is held who attends - is it just employees? Or are partners, clients and suppliers also invited? the value and type of gifts you provide If you do provide entertainment-related fringe benefits, keep the right records to support this so you can calculate their taxable value. It's important to get on top of how FBT works before you provide perks and extras. Otherwise, you may end up with an unexpected FBT liability. For more information, please contact your Sydney business accountants – ACP Accountants on 02-80467621, or simply get in touch and email us at info@acpaccountants.net.au.
One of the many responsibilities SMSF trustees have every income year is valuing your fund's asset at market value. Each year you need to value your SMSFs assets and provide supporting evidence to your auditor. The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing your fund's accounts, statements and SMSF annual return (SAR). Your asset valuations will be reviewed by your approved SMSF auditor as part of the annual audit prior to lodgment of your SAR. Your auditor will check that assets have been valued correctly, assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets. Make sure you get your valuations done before going to your auditor. It's your responsibility to provide objective and supportable evidence to your auditor for the valuation of the fund's assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgment of your annual return or a contravention if mistakes have been made. Start researching now to find what type of evidence your need to support the valuation as this can take time. For some asset types the law requires valuations to be undertaken by a qualified independent valuer. For further information, please contact Sydney Business Accountants – ACP Accountants on 02-80467621, or simply email us at info@acpaccountants.net.au.