Taxpayer not carrying on a GST enterprise
The AAT has ruled that a taxpayer who claimed over $400,000 in GST input credits in relation to sales of some $25,000 in one BAS quarter was not carrying on an “enterprise” as there was no corroborating evidence to support his claim that he was carrying on a construction business. As a result, his BAS statements were revised to “nil” and his ABN and GST registration were cancelled. The taxpayer claimed that the corroborating evidence, such as business records, were lost in floods. However, in finding that the taxpayer had not satisfied the onus of showing that he was carrying on an enterprise, the AAT noted that there was no independent evidence that a business was being carried on and that he had not tried to reconstruct his records as required under s 900-205 of the ITAA 1997. (Chami and FCT [2022] AATA 3797, 11 November 2022.)
APRA discussion paper: Strengthening Financial Resilience in Super
APRA has announced that it is proposing changes to improve how superannuation trustees manage financial resources to protect fund members from poor operational risk event outcomes. In a recently released discussion paper, APRA proposes to replace the existing Prudential Standard SPS 114 Operational Risk Financial Requirement (SPS 114) with enhanced obligations for trustees. The enhancements include widening the scope of permitted use of financial resources held to manage operational risks, reducing barriers to efficient use of these resources, and requiring trustees to adopt a more sophisticated risk-based approach to determining how much to hold. A copy of the discussion paper is available on the APRA website, here.
SMSFs: Changes to annual lodgments of TBAR
The ATO has advised that from 1 July 2023, all SMSFs with members in retirement phase must report transfer balance account events by lodging a transfer balance account report quarterly. Currently, some SMSFs can lodge their TBAR with the SMSF annual return when all members have a total superannuation balance of less than $1m. The change will remove complexity for SMSFs around when they need to lodge. It will also provide members with more timely and accurate information to allow them to better manage their transfer balance cap and avoid excess transfer balance tax.
