company tax rates 2018/19

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  • Updated 3 months ago
I am using the practice management product. When I prepared the 2017/18 company tax return for a client, found out that the tax rate is 30%. My client is a small entity that means his company should only pay 27.5%.

I raised this question on July 31st 2018 to the support@reckon and get no reply upto date. I have checked for software update everyday and there is no update required.

Now I am having a check based on 30% calculation and dare not to lodge the wrong company tax return.

Would any one answer my question how to correct that company tax rate or update to the correct version of software. 
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Francis

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Posted 3 months ago

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Matthew, Employee

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Hi Francis,


In the return in the Status of the Company you will see Business Entity Election with Small Business entity & Base rate entity.


Selecting base rate entity will lower the tax rate to the small business tax rate as per screenshot below.


Thanks

Matt


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Peter French

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I had the same problem ... and left the box unticked.
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Francis

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What is the meaning of Small business entity ?
Is it logical to imply they have to pay 30% tax by without ticking the Base rate entity ? 
What is the purpose of asking Small business entity ? 
If it is not a design issue then what ?  
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Matthew, Employee

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Hi Francis,

Its a small change for the 2018 return required by the ATO.

The Small Business Entity is for PAYG instalments and the Base Rate is for the change of Tax Rate.

See detailed explanation below:

F1 - Small business entity

The company will be a small business entity if it is carrying on a business and has an aggregated turnover of less than $10 million. If the company is an eligible small business entity it is important to indicate it at this label as it is used to correctly assess pay as you go instalments. See Small business entity concessions: Eligibility.

F2 Base rate entity

From 2017-18, an entity that is eligible for the lower corporate tax rate of 27.5% for 2017-18 will be referred to as a Base Rate Entity.

A base rate entity is a company that:

  • has an aggregated turnover less than the turnover threshold – which is $25 million for the 2017–18 income year, and

  • is carrying on a business.


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Peter French

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The ATO system doesnt check turnover againt the SBE box as uiu voukd be exckuded because of assets like some primary oriducer companies in 2018. So tick the bix or pay 30%
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Francis

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If it is not used to determine the tax rate then 30% pre-determined rate should not be used in the software to calculate tax.  A separate box should be mandatory to choose the tax rate. Without ticking this box there should be an error message.