ATO (tax office) payments by credit card

[scheps]

so what is the way around the 250k ato problem? just have to credit to another ff program?

And 250k, is earned per year, or redemption per year?

 

[wafliron]

Also, I read on the ATO that you can only claim the credit card transaction fee as a tax deduction if you don't borrow the money from your financial institution, ie put on a credit card.

IIRC, the rules differ depending upon the nature of the tax (income tax/BAS/FBT/etc) and also who is paying them (individual/sole trader/company/etc) - what are the specifics in your situation?

So it would seem that it is best to overload a credit card, then pay, so you can legitimately claim the transaction fee as a tax deduction. Is that right? So would it be better to get a card you can overload rather than the WWEDRCC?

Possibly - it depends what else you could be doing with the money. Again, IIRC, when I did the sums it was better to borrow the money, not claim the CPF a a deduction, and leave the cash in my mortgage offset account for another 25+ days (I say 25+ as I think that was the break-even point - will depend upon your mortgage rate and tax bracket though).

I guess that explains why the Citibusiness card has an annual 250k points cap... thank you.

Interesting point, I'd never considered that. Could be a coincidence as well though.

 

[jeremydta]

IIRC, the rules differ depending upon the nature of the tax (income tax/BAS/FBT/etc) and also who is paying them (individual/sole trader/company/etc) - what are the specifics in your situation?




Possibly - it depends what else you could be doing with the money. Again, IIRC, when I did the sums it was better to borrow the money, not claim the CPF a a deduction, and leave the cash in my mortgage offset account for another 25+ days (I say 25+ as I think that was the break-even point - will depend upon your mortgage rate and tax bracket though).



Interesting point, I'd never considered that. Could be a coincidence as well though.

amount is well into the 5 figures

it's a PAYG Instalment activity statement

 

[Origin]

so what is the way around the 250k ato problem? just have to credit to another ff program?

And 250k, is earned per year, or redemption per year?

It is not per ff program or just Qantas. It means a few people in this thread could have a different view to the ATO whether thay should be taxed (or their employer being subject to FBT) on this "game" or not.

Per the ATO Practice Statement it is on "earnerd" per year not redemption. 250,000 or more points earned per year from business expenses is just one of the ATO considerations. Other criteria include whether there is a commercial puposse to pay by credit card or whether it is a substitute for income.

It is just the ATO view. Probably waiting for a big test case as the administrive costs of enforcement are large.
But having said that this Practice Statement was released in August 2004

Just be aware this "game" is not without risk.

 

[cove]

Will your WooliesCC cover it or will you need to re_load it once or more??
You could make the first instalment today so you dont run out of time as it has to be done by a particular date.
Once it is all done read "I hate paying taxes thread" to get you thinking SQ looks pretty good from a Citibank card of your choice.

 

[Stephen65]

so what is the way around the 250k ato problem? just have to credit to another ff program?

And 250k, is earned per year, or redemption per year?

THIS IS NOT TAX ADVICE

I am yet to hear of the ATO attempting to enforce that view. I have put more than 250K through a year with no issues.

THAT WAS NOT TAX ADVICE

 

[Origin]

THIS IS NOT TAX ADVICE

I am yet to hear of the ATO attempting to enforce that view. I have put more than 250K through a year with no issues.

THAT WAS NOT TAX ADVICE

Perhaps that is because we have self assessment in Australia.
There is never a problem until the tax auditor knocks on the door.

 

[wafliron]

amount is well into the 5 figures

it's a PAYG Instalment activity statement

I'll refer you back to my post here: http://www.australianfrequentflyer....fice-payments-credit-17109-45.html#post597449. I think that the CPF will be deductible for your business, even if you personally "borrow" money on your CC to pay the bill, as long as the business reimburses you for the cost of the CPF.

Note that this is not tax advice however, and was only a summary of my layperson understanding of CPF deductibility at that point in time. I'll also specifically point out that only a few posts later other posters were stating that some of my info may be incorrect, so please do take it with a grain of salt.

 

[Peter2]

Warning: Citibank Security called today and indicated that ATO payments may not earn points anymore (at least on Citibank Select Cards):!::!::!:.

I have a rather large firm BAS tomorrow to pay which I normally try to clear with security in the first place. I asked them for information on where they had changed their terms and conditions.

Looks like I am going to have to review all Cove's emails to start the hunt for another card. But I will also review to see if the caller was right. I am assuming this hasn't already been identified on this forum... I didn't review the whole post trail on this. Looks like the harvest is almost finished on this one....

Peter

 

[diningdecadence]

Citibank Security called today and indicated that ATO payments may not earn points anymore (at least on Citibank Select Cards)

any more details than this?

i processed a transaction yesterday on a citi select and points have posted fine today.

 

[Cynicor]

Warning: Citibank Security called today and indicated that ATO payments may not earn points anymore (at least on Citibank Select Cards):!::!::!:.

I have a rather large firm BAS tomorrow to pay which I normally try to clear with security in the first place. I asked them for information on where they had changed their terms and conditions.

Looks like I am going to have to review all Cove's emails to start the hunt for another card. But I will also review to see if the caller was right. I am assuming this hasn't already been identified on this forum... I didn't review the whole post trail on this. Looks like the harvest is almost finished on this one....

Peter

If there is no clause against tax payments it would be pretty hard for them to change it last minute. I would wonder if it is a bit like the 28 degrees guys who say that putting your account into credit even a few dollars will result in locking, is against T+Cs etc. We all know it is a bluff.

 

[ermen]

There is a clause against business payments not earning points. However not sure it is enforced.
However, they could do what Amex did and change earn rates.

To be honest, there is way too much info on this thread and i would rather the mods just delete it from the public record.

 

[wafliron]

Warning: Citibank Security called today and indicated that ATO payments may not earn points anymore (at least on Citibank Select Cards):!::!::!:.

More info please - did they tell you this in response to you letting them know about some big ATO payments going through, or was it unprompted? And did they say this is a change to the rules, or just that this is the rule?

I've been told by several Citi CSRs over the last 18+ months that ATO payments don't earn points - including one just a few days ago - but it's never been enforced. I think it's very relevant to try and establish whether what you were told is just the standard line being repeated, or whether it actually represents a change to what they're doing.

 

[angusburns]

Coincidentally, I am putting my account into credit via BPay overnight and will be paying a five figure tax bill tomorrow for a family member, not a business expense, with a Citibank Select card so if I have any problems I will let you know.

If being more than $10k in credit is an issue, I guess we can just transfer enough every day to only be, say, $9k in credit and then pay as much as possible (your limit + $9k) and then Bpay more money in the next day to get me back to my limit + $9k. Bit tedious but possible.

It is a legitimate personal expense so i don't expect any issues, although as someone else pointed out, how can any credit card company tell if a payment to the ATO is for a business or personal reasons?

 

[Peter2]

More info please - did they tell you this in response to you letting them know about some big ATO payments going through, or was it unprompted? And did they say this is a change to the rules, or just that this is the rule?

I've been told by several Citi CSRs over the last 18+ months that ATO payments don't earn points - including one just a few days ago - but it's never been enforced. I think it's very relevant to try and establish whether what you were told is just the standard line being repeated, or whether it actually represents a change to what they're doing.

Yes I was processing a six figure amount and normally ring up security as they have put a stop on the card before and I put other work transactions on it. I didn't want to cause a fuss and wanted to fly low on the radar but the Citi girl basically said the ATO payments dont earn the points. I suspected she might be trying it on and so I called her bluff and said the transaction would be coming through anyway.....

Peter

 

[wafliron]

Yes I was processing a six figure amount and normally ring up security as they have put a stop on the card before and I put other work transactions on it. I didn't want to cause a fuss and wanted to fly low on the radar but the Citi girl basically said the ATO payments dont earn the points. I suspected she might be trying it on and so I called her bluff and said the transaction would be coming through anyway.....

Thanks for the extra info - luckily, it sounds like she was just repeating the standard, non-enforced, line.

 

[cove]

Nothing has changed so far for us. I rarely phone Citi for that obvious reason.

 

[cove]

Unless the mining companies credit carded their mining tax to create a day delay it looks like they paid as much as the rest of us.

 

[edman]

How do you guys check your points against transactions that have been processed? I have never been able to find this function on the Citibank website so its just a rough guess from the previous balance that I use as a yardstick.

Will be keen to hear on current payments and points scenarios as my next credit card cycle finishes just before the due date for my next lot of payments at the end of November.

 

[Cruiser Elite]

How do you guys check your points against transactions that have been processed? I have never been able to find this function on the Citibank website

Correct - you cannot find this function on Citi web site cause it does not exist and you cannot check transactions like on AMEX.

Citi did tell me months ago this feature would be added at some point in time - but I wouldn't hold my breath.