It's that time of the year when we have to financially reflect on what has happened over the past twelve months and then put it on paper for the ATO.
Some business people will be searching for tax deductions to claim against their revenue but be warned, that writing off bad debts can have some pitfalls if you haven't followed the requirements of the ATO. So we have decided to have a look at the tax act in relation to such claims and summarise it briefly for you.
"While individual cases may vary, as a practical guide a debt will be accepted as bad where, depending on the particular facts of the case, a taxpayer has taken the appropriate steps in an attempt to recover the debt and not simply written it off as bad.
Generally speaking such steps would include some or all of the following, although the steps undertaken will vary upon the size of the debt and the resources available to the creditor to pursue the debt:
(i) reminder notices issued and contact is attempted;
(iii) formal demand notice is served;
(iv) issue of, and service of, a summons;
(v) judgment issued against the delinquent debtor;
(vi) execution proceedings to enforce judgment;
(viii) valuation of any security held against the debt;
(ix) sale of any seized or repossessed assets".
Click here >> for the ATO link to 92/18 (S32)
In essence, these are the rules by which we all live by and it may be a good idea that notations should be kept along the way with all debtors who are consistently late with payments and certainly those which you feel may possibly need to be written off at a future time.
As usual, seek your tax professional's advice.
9 June 2017
The end of the year is upon us again
the calculating and charging of interest is ceased and the account is closed
a reasonable period of time has elapsed since the original due date for payment of the debt. This will of necessity vary depending upon the amount of the debt outstanding and the taxpayers' credit arragement (e.g. 90, 120 or 150 days overdue);
Your Credit File - Your Privacy
You may not have seen the news articles on the television in the last few weeks of problems confronting lots of Aussies and their credit files.
Did you know that many people are unable to obtain finance because of the information contained in their credit file and as a result are refused. We have reported cases of individuals having defaults without any knowledge of the alleged offence. Everyone is entitled to check their file once a year for free.
Aussies intending to apply for finance in 2017 or even planning to buy a mobile phone or something else on credit should check their credit file first before doing so. Even if you just want to see what is in your credit file it’s worth taking ten minutes to get a copy of your report for free from a CRB just click on any one of the following :-
You might be surprised at what you find.
See here what Timothy Pilgrim, PSM, Australian Privacy Commissioner had to say about your privacy;