Hospitality

There are traps when hiring working holiday maker. There are rules in selling vouchers. 

Under current fiscally constrained environment, the local government fund and set policy to support high performing industry sector just to ensure the productivity and employment prospects of the economy. Hospitality is one of the largest sectors which includes restaurants, cafes, registered clubs, hotels.

A few key reformed to the taxation system which provide greater benefits to business owners within the current industry

  • Simplified Tax System

An annual turnover of less than $2 million that brings the eligibility criteria in line with the ATO’s ruling of a Small Business

  • Concessions for Small Business from Fringe Benefit Tax

Small businesses with annual turnover less than $2 million are entitled to Fringe Benefits Tax concessions. Car parking benefits an employer provides are exempted if the parking lot is not in a commercial car park, the employer is not from a government body, a listed public company or a subsidiary to it, and lastly if the Gross Total Income within the last income year is less than $20 million. From 1st April of 2016 onward, any work-related devices provided to employees within the same Fringe Benefits Tax year are also entitled to the exemption of Fringe Benefit Tax.

It is important to check with professional accountants or financial planners for additional regulations and obligations that may vary according to your situation. The current Benchmark ratio is based on Income Tax Return and Activity Statement of Businesses that operated within the same industries. Depending on the size of the business, not all the benchmark ratios are applicable.

As a business owner, whether commercial premises like a restaurant, a café or a hotel, any rental income should be included in tax return, a claim on income tax deductions can be made against property expenses, and you are liable for capital gains tax on any CG once you sell the premises.

The goods and services tax (GST) is a 10% on goods and services sold in your business, and the scope of GST charges is broadening to fresh food and produce. All food and drinks sold in a restaurant at the place where they are sold are in fact taxable even if they are a GST-free items.

You must charge your customers GST if all food & drinks are sold

  • A restaurant or hotel café
  • A snack bar in restaurant or a mini bar in the hotel
  • Any venue associated with leisure, sport and entertainment

To find out more with respect to detailed features of the Simplified Tax System or simply you would like to have a general report on a pre-budget of a benchmark within the industry, please come and talk to us Tax Ideas Accountants & Adviser and review our online resources flyers.