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Discussion Starter · #1 ·
Well I got a call from ATO on Friday as they looking into my farm business, problem is I only report a small profit for one quarter, the rest are them paying me for GST and the fuel credits, I explain the wet weather and the difficulty of starting a farm business from scratch and also the ongoing investment needed, they also question my diesel usage so I explain that as well, I send them my spreadsheet I use for BAS and I have receipts for every cent claimed.

They said they will call Monday and let me know if they let me keep trading or they will suspend my ABN until I turn a profit, which is devastating to say the least, I don't know how else to start this business, it's needs alot of money for a few years yet to get it up and going. I also asked what happens when I sell the crop in the ground, they said I need to pay them the GST and they will let me claim expenses for that quarter....I have tried not to think about it but this does keep me up at night.

I don't know what this government expects, so the alternative is that I keep my mining money in the bank and go on overseas holidays, or invest else where, so then the businesses I spend my money at have smaller profit and don't send as much tax in...I don't understand...this is how you shrink an economy...

Ant.....
 

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Ant I'd be contacting your accountant something about that sounds a bit fishy to me.
I've had 3 encounters with the ATO in the time I've been farming not a big deal just justifying there jobs.
Make sure you involve you accountant and write down all your conversations time of calls and what the call was about.
But I'd say it could be a fishing call the ATO are pretty good at doing every thing in writing.
 

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There are reports of ATO scams
Hope you didn't give them any bank details
An accountant told me years ago if the ATO contact me to refer it the accountant, all meetings in their office etc.
Best of luck
 

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Beat me to it blanch,
involve accountant and document everything.
At the very least ask for receipt numbers for every call and who you were speaking to-they love to lose people in their telephone tree or stop you talking to the same person twice. Having all the details (call times, person, topic) can adjust their attitude a little.

I'm trying to work out how it could be someone scamming, but haven't cracked it yet. :(:confused:

I'd definitely be requesting written documentation from them for everything that they're saying for your own records at the very least.
 

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Could be a scam, if its keeping you up at night why don't you call enquiries to at ATO to see if your file is being investigated. That way you can at least deal with reality.

I do know they understand if you file a few losses that's ok. But a business is there to make a profit. If after a while it doesn't they will wonder why you are keeping it.

It is possible they have flagged you because you have the mining job as well and they think you are using the farm just to get rid of tax.
 

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Discussion Starter · #7 ·
Don't thinks it's a scam guys, he requested my work sheet and was sent to ATO email address? It's because I keep getting GST back and Fuel credits and have only reported profit in one quarter out of probably 6-8 quarters...he had all the figures...I will record details and of course I never give bank details, I did get an audit when I first started, the guy was really good, fully understood farming,noted down I needed to purchase a harvester and wished me luck! It is within the rights to suspend ABN's if too much loss making occurs, which of course helps put some nails in your coffin.

See how I go, I have spent 400k plus between land and gear, and I have at least another 6-800k to go involving land and gear before this is a business that's rolling along and not a hobby. So the ATO won't see much action for a while, how else do you start a farm from scratch? I don't have any parents giving me anything, it's all 100% self funded, I don't have anything I borrow etc...it's just me...if I need it I buy or hire...only options I have at the moment...it's not ideal but that's the way it is....

If they think Australia is going to be rich from the food boom, personally I doubt it, it will be like the mining boom, they blew it, I sat and watched it happened.

Ant....
 

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hmmmm. Not sure what to make of all this Ant. Its pissing me off that they are giving you a hard time because you are having a crack. Hopefully it works out.
 

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Ant, if you are drawing a decent salary from your mining job and claiming losses in your ag business, you are well and truly in the crosshairs of the ATO. Plenty of well paid people have a few acres, run a few head and try to claim all the expenses to reduce their taxable income - they've been awake to that one for a while. You could farm in a separate entity, and cap your tax rate, but ultimately you will have to show a profit. As said above, talk to your accountant - and come up with some "creative" bookkeeping.
 

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Discussion Starter · #10 ·
No I don't use the farm to reduce my income, the farm is in it's own right...so it gets GST back and fuel credits...haven't had to pay partnership tax etc because farm lost money for the financial year....

I claim flights and some other crap but bugger all off the mining wage...I pay 60k give or take a year....

No last on the back for pumping my mining wage into local economy...I could be going on overseas holidays or ordering everything from overseas like most of my work mates...I spend 100% of my money here....every f**king dollar. I'm debating if I can get to Darwin for 4 days at end of August...thats my holiday...still spent in AUS....

Ant....
 

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Fair enough Ant, if your farming business isn't there to offset your personal income then I don't see a problem. If they are coming after everyone who made a loss last year they're gunna be busy. Pretty sure if you showed them some sort of a business plan you'll be right. Just tell them when you do start paying tax, you will request a meeting to discuss how they are going to spend it. All the best.
 

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You need to ask other farmers that are cropping like you to get an idea of which accountants know what you're about. A couple of questions at the local pub I went from paying $10-12000 to getting a couple of grand back. I have since changed accounts again and am married to my currant CPA. I don't recommend doing that though because I sure I'm going to end up in jail. My mrs says most of the workers at the ATO don't understand the stuff they're trying to enforce. So I'd be asking around
 

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Discussion Starter · #13 ·
Cheers, I do my own BAS statements and fuel credits it's pretty easy, I have a very good accountant for the rest, I have an appointment Monday week with accountant...see what they say Monday, my accountant did tell me they reserve the right to suspend and in some cases ask you to pay back as you business is not viable, so if they suspend my ABN I have two options, close up shop, or keep going while paying gst and fuel, then when I harvest I have to apply to have ABN deactivated as I need to pay them there GST, then hopefully I can claim all the previous quarters of expense ? Will clarify on Monday and with accountant, problem is I will be in this same cash flow scenario for some years....

Ant....
 

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I claim flights and some other crap but bugger all off the mining wage...I pay 60k give or take a year....

Ant....
How do you clam flights? My accountant would never touch claiming travel costs as he believed it not deductible due to choice of work location.
 

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You need to ask other farmers that are cropping like you to get an idea of which accountants know what you're about. A couple of questions at the local pub I went from paying $10-12000 to getting a couple of grand back. I have since changed accounts again and am married to my currant CPA. I don't recommend doing that though because I sure I'm going to end up in jail. My mrs says most of the workers at the ATO don't understand the stuff they're trying to enforce. So I'd be asking around
Jail...what for? Sexual harassment in the workplace? I have the same issues with my wife, when she`s doing the accounts.:D
 

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Discussion Starter · #17 ·
MS, air travel and public transport is deductible between locations, cars is obviously highly regulated, I have a ruling from ATO on that....least of my worries

Ant...
 

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Hi Ant

I had a similar issue when I first started cause I bought equipment and then claimed back about 30k in my first BAS. The ATO sent me a letter saying before they paid me the GST they wanted proof of all purchases. Sent it all thru via the bookkeeper and got paid and never heard back from them.

I pay $100 a quarter to get a registered bookkeeper to do my BAS and I think that takes some attention off you. Anyone doing their BAS themselves and claiming a refund each quarter is going to raise a red flag.

I know your setting ya self up for the long term but I always look at my BAS and put simply if you not paying GST your not making any money. Fine over a quarter but over 2 years getting a refund nearly every time. That will be ring alarm bells to ATO.

Don't stress mate I'm sure a conversation with the account and some documentation will have it all sorted. Good luck.

Hint : don't claim ALL your diesel as farm fuel either cause that is another red flag to ATO. We all drive on the road for some kms. I fill up at servo and don't claim the rebate atleast twice a quarter just to keep them happy.
 

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Jail...what for? Sexual harassment in the workplace? I have the same issues with my wife, when she`s doing the accounts.:D
Tax fraud so she can have some peace and quiet. Don't know what her plan is for the other 6 children:D
 

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Discussion Starter · #20 ·
I had the first audit as well so this is the second go, it's a stress I don't need, but one way or another I will farm, it's just taking what little joy there is in the job away,

Does anyone do self managed super and what do they think? I have enough super to near pay my farm debt...

Ant...
 
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