Compliance Matters

Cash economy and businesses

In July and August, the Tax Office sent out letters to businesses in the retail, construction and consumer services industries, which have high volumes of cash transactions.

The Tax Office will send follow-up letters in September and October to selected businesses that it has identified as likely to present risks in connection with cash economy participation.

The Tax Office says it is likely that some of the taxpayers identified under the program will be subject to further review

TIP: Taxpayers should contact us to discuss any potential compliance issues that the Tax Office has identified in the letters.

Excess Superannuation Contributions

According to the Tax Office, it has identified "potential" cases of individuals exceeding the $1 million cap on non-concessional superannuation contributions made during the transitional period from 12 May 2006 to 30 May 2007.

Individuals who exceed the superannuation contributions cap in a financial year are liable for the excess contributions tax.

To identify the actual excess contributions tax assessments to be issued, the Tax Office said that it will conduct a pilot investigation of 200 representative cases.

Minors and tax-free threshold

The maximum "unearned income" that a resident minor can earn for the 2008-09 income year is $2,667.
Effectively, a resident minor can receive up to $2,667 in trust distributions for 2008-09 before incurring a tax liability, unless the minor has other sources of income.

Generally, income derived by a minor is taxed under a separate rate. However, exceptions apply, such as income from full-time employment.

Overpaid income tax instalments

The Tax Office has announced that it has completed a review of credit balances on activity statement accounts of taxpayers.
A taxpayer whose account has a credit balance that arose from overpayments of income tax instalments will have the balance transfer to their income tax account. The credit will then be issued in a taxpayer's next income tax assessment.

Taxpayers who do not want the credit to be issued in their next assessment should contact us to request for a refund from the Tax Office.