Frequently forgotten revenue streams such as tips and patent royalties need to be included in the assessable income of a business, the ATO warned in an update.
Commissions, investment earnings, gratuities and compensation payments are all part of assessable income this tax time as well as other more obscure income sources.
Royalties such as payments when other entities use the business’ patent as well as incentives such as cash payments to lease business premises are also included.
Interest on business investments along with interest on overpayment or early payment of tax as well as dividends and franking credits on business investments should also be on the assessable income list.
Rental income from property owned by businesses as well as lease payments and hire charges accrued by hiring out assets also need to find their way to a business’ assessable income.
According to the ATO the tip jar isn’t exempt from being listed either, with tips and gratuities – whether cash or electronic payments – also needing to be listed.
Income that is not necessarily a part of the business’ main function or everyday activities also needs to be included in a business’ assessable income.
Examples of these include disposal of non-trading stock assets, taking some trading stock for your own use and increase in trading stock value.
Businesses that undertake barter transactions such as selling goods and services to receive something other than money in return also need to include the market value of what has been received as payment under assessable income.
Prizes and awards as well as insurance payouts also don’t escape the watchful eye of the ATO with both required to be listed under assessable income.
The pandemic meant the government increased payments and support to a greater number of businesses and individuals.
The payments that are required to be listed under a business’ assessable income include:
However, some government grants and payments are not required to be included such as cash flow boost payments, and other grants, payments and stimulus provided during COVID-19.
Josh Needs
8 July 2022
accountantsdaily.com.au
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