Category - Articles

JobKeeper Update In welcome news, the ATO is extending the due date for lodgement of the December JobKeeper business monthly declaration to Thursday 28 January 2021 (instead of 14 January 2021).  The key dates are as follows : Between 4 January 2021 and 28 January 2021 – complete the December business monthly declaration (this is an extension...

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Tax cuts pass Parliament The Government announced various tax measures in the 2020 Budget on 6 October 2020, and it was able to secure passage of legislation containing some of the important measures very shortly afterwards, as summarised below. Tax relief for individuals The Government brought forward ‘Stage two’ of their Personal Income Tax Plan...

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Superannuation guarantee rate increase update Recently, arguments both for and against increasing the rate of compulsory superannuation guarantee (‘SG’) have continued to be tossed around! The SG is the compulsory amount of superannuation an employer must pay into an eligible employee’s chosen super fund. The rate of SG has been frozen at 9.5% of an...

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JOBKEEPER UPDATE On 21 July 2020, the Government announced that the JobKeeper Payment (‘JKP’) would be extended until 28 March 2021 (i.e., for a further six months beyond its original end date of 27 September 2020). As a result, JKPs would now be made over two separate extension periods, being: Extension period 1 – which covers the...

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COVID19 Update and 2020 Tax Returns We are running our next webinar exclusive for Hughes O’Dea Corredig clients on 16th July at midday via Zoom. The webinar will discuss the 2020 tax preparation, how our office will be operating this year due to COVID-19, what information you will need to provide prior to appointments, and...

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JobKeeper declaration due 14 June Businesses that have enrolled in the JobKeeper Scheme and identified their eligible employees are reminded that they will need to make a monthly declaration to the ATO to ensure they continue to receive JobKeeper payments. The monthly declaration must be made by the 14th day of each month to claim...

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Coronavirus: Government’s JobKeeper Payment A major part of the Government’s response to the Coronavirus (or ‘COVID-19’) pandemic is the ‘JobKeeper Payment’ Scheme. The JobKeeper Payment is a wage subsidy that will be paid through the tax system (i.e., it will be administered by the ATO) to eligible businesses impacted by COVID-19. Under the scheme, eligible...

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Coronavirus: Government announces new tax measures The Government has announced a number of economic responses to the Coronavirus (or ‘COVID-19’) pandemic, including economic stimulus packages worth billions of dollars. Some of the key tax measures include: From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an...

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Employer’s requirements and the deductibility of WREs Some employees may wonder whether a work-related expense (or ‘WRE’) becomes deductible merely because their employer specifically requires the employee to incur the expense. Importantly, the ATO’s recent draft ruling on the deductibility of work-related expenses reiterates that an employer’s requirements do not determine the question of deductibility....

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Lifestyle assets continue to be an ATO audit target The ATO has revealed it will request a further five years’ worth of policy information from over 30 insurance companies about taxpayers who own marine vessels, thoroughbred horses, fine art, high-value motor vehicles and aircraft.  The ATO expects to receive information about assets owned by around...

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Year-end (and other) staff Christmas parties Editor:  With the well earned December/January holiday season on the way, many employers will be planning to reward staff with a celebratory party or event.  However, there are important issues to consider, including  the possible FBT and income tax implications of providing ‘entertainment’ (including Christmas parties) to staff and...

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Super guarantee opt-out for high income earners now law From 1 January 2020, eligible individuals with multiple employers can apply to opt out of receiving super guarantee (‘SG’) from some of their employers, to help them avoid unintentionally going over the concessional contributions cap. If appropriate for them, they should submit the relevant ATO form...

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Superannuation is changing again, but this time it’s for everyone’s benefit. The ATO is inching closer to real-time reporting, and SMSF trustees need to adapt to this latest move in the ATO’s regulatory duties. Real time reporting, similar in concept to single touch payroll, is the push for integrity and accuracy throughout the superannuation system....

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$30,000 instant asset write-off The ATO is reminding businesses that are looking to expand or improve their business and thinking of buying new or second hand assets, that medium sized businesses with a turnover up to $50 million (but at least $10 million) are eligible for the instant asset write-off. This now applies to assets...

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“Outrageous” deductions rejected The ATO has published some of the most unusual claims that they disallowed last financial year. Nearly 700,000 taxpayers claimed almost $2 billion of ‘other’ expenses, but the ATO’s systematic review of claims had found, and disallowed, some very unusual expenses, including: claims for Lego sets bought as gifts for children, and...

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Tax cuts become law The Government has announced that more than 10 million Australians will receive immediate tax relief following the passage of legislation through the Parliament, which increases the top threshold for the 19% tax rate from $41,000 to $45,000 and increases the low income tax offset from $645 to $700 in 2022/23. In...

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‘Cash in hand’ payments to workers no longer tax deductible The ATO has reminded employers that any ‘cash in hand’ payments made to workers from 1 July 2019 will not be tax deductible. ‘Cash in hand’ refers to cash payments to employees that do not comply with pay as you go (‘PAYG’) withholding obligations. Payments...

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In February this year, the Government passed legislation which prevents trustees of APRA-regulated funds from providing insurance to members with inactive superannuation accounts, unless a member has directed otherwise. It is a common practice for many individuals with an SMSF to also have a secondary APRA-regulated fund which provides them with insurance. This may be...

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Single Touch Payroll Update Employers with 19 or fewer employees are required to start reporting through Single Touch Payroll (‘STP’) from 1 July 2019. The ATO will be working with employers to support them as they transition to STP, including allowing small employers to start reporting any time from 1 July to 30 September (and...

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End of the financial year is an important time for small businesses, completing bookkeeping, tax returns and planning for the new financial year. Putting the hard work in each financial year can help you get your business organised and work smarter in the year ahead. Also consider planning for the end of year as well....

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2019/20 Budget Update The Government handed down the 2019/20 Federal Budget on Tuesday 2 April 2019. Some of the important proposals include: Increasing and expanding access to the instant asset write-off from 7:30 pm (AEDT) on 2 April 2019 (i.e., ‘Budget night’) until 30 June 2020, as follows: – Increasing the instant asset write-off threshold...

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Continued focus on the cash economy ATO Assistant Commissioner Peter Holt has announced that, in the 2019/20 financial year, the ATO will be visiting a further 10,000 small businesses across the country, including up to 500 small businesses in Tasmania. He further said that businesses that advertise as ‘cash only’ and businesses that are operating...

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Changes to the small business instant asset write-off On 29 January 2019, the Prime Minister announced that legislation will be introduced to: extend the small business instant asset write-off by 12 months to 30 June 2020; and increase the write-off threshold from less than $20,000 to less than $25,000 (effective immediately). The current threshold of...

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Understanding STP obligations Single Touch Payroll (‘STP’) is a Government initiative aimed at cutting red tape for employers and improving visibility of compliance with business obligations such as: salary and wages and similar payments; Pay As You Go (‘PAYG’) withholding; and certain superannuation related information; by requiring ‘real time’ reporting of payroll information directly to...

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Division 293 assessments The ATO has been issuing ‘Additional tax on concessional contributions (Division 293) assessments’ with respect to liabilities relating to the 2018 income year. Division 293 imposes an additional 15% tax on certain concessional (i.e., taxable) superannuation contributions. It applies to individuals with income and concessional superannuation contributions exceeding the relevant annual threshold....

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Fast-tracking tax cuts for small and medium businesses The Government has fast-tracked the already legislated tax cuts to small and medium businesses by bringing them forward five years. Companies with an aggregated turnover of less than $50 million will have a tax rate of 25% in the 2022 income year (instead of the 2027 income...

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Increased scrutiny of home office expense claims Last year, 6.7 million taxpayers claimed a record $7.9 billion in deductions for ‘other work-related expenses’, which includes home office expenses. Reportedly, due to a high number of mistakes, errors and questionable claims for home office expenses, the ATO has recently advised that it will be increasing attention,...

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SG Amnesty still pending The proposed superannuation guarantee (‘SG’) amnesty is a one-off, 12-month opportunity to self-correct past non-compliance (i.e., from 24 May 2018 to 23 May 2019). It will apply to previously undeclared SG shortfalls for any period from 1 July 1992 up to 31 March 2018. The ‘carrot’ currently on the table is...

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Further company tax cuts deferred (for now . . .) Government has decided not to put the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 to a vote in the Senate … for the present point in time (it had already passed the House of Representatives without amendment). The Bill aims to progressively...

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Personal Income Tax Cuts passed! Parliament has passed the Government’s Personal Income Tax plan, meaning that the first stage of the proposed income tax cuts will start to take effect from 1 July 2018. According to the Prime Minister, taxes “will now be lower, fairer and simpler”. The Government’s plan has three steps: Step 1:...

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2018 Budget Update   The Government handed down the 2018/19 Federal Budget on Tuesday 8th May 2018.  Some of the important proposals include: The introduction of the ‘Low and Middle Income Tax Offset’, a temporary non-refundable tax offset of up to $530 p.a. to Australian resident low and middle income taxpayers for the 2019 to...

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Tax time is fast approaching, but the good news is you still have time to get organised, reduce your tax burden, and make sure you’ve met your compliance obligations. Instead of just a time-consuming mountain of scary paperwork, EOFY is a great chance to set you up for next year’s success. While it might be...

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GST withholding measures now law Legislation has been passed to “clamp down” on GST evasion in the property development sector. From 1 July 2018, purchasers of new residential premises and new residential subdivisions will generally be required to withhold the GST on the purchase price at settlement and pay it directly to the ATO. Property...

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New superannuation rates and thresholds released  The ATO has published the key superannuation rates and thresholds for the 2018/19 income year. The Non-Concessional Contributions cap will remain at $100,000 (although transitional arrangements may apply), and the Concessional Contributions cap will remain at $25,000.  The CGT cap amount will be $1,480,000. The Division 293 tax threshold...

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Work-related tax deductions relating to cars, travel, clothing, internet, mobile phones, and self-education are among the top claims the ATO will be watching at tax time. The move for closer scrutiny follows an announcement which revealed 6.7 million taxpayers claimed a higher-than-expected $7.9 billion in work-related claims last year, with the ATO noting this included...

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Big changes proposed to eligibility for the CGT SBCs The Treasurer has released draft legislation containing new “integrity improvements” to the CGT small business concessions (‘SBCs’) (i.e. including the 15-year exemption, the retirement exemption, the 50% active asset reduction and the small business roll-over). Due to the government’s “continued support for genuine small business taxpayers”, it...

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ARE YOU EMPLOYING 20 OR MORE EMPLOYEES? MAJOR CHANGES TO YOUR REPORTING STARTING FROM 1 JULY 2018   Single Touch Payroll (STP) is a reporting regime whereby your payroll software reports directly to the Australian Taxation Office. Each pay period, the details of each employees gross payments, tax and superannuation will be provided electronically to the...

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The sustained cooling of house price growth has seen first-home buyers flocking back to the market. Prices are no longer rising thanks to a number of factors including improved supply, and clampdowns on investor lending. A significant outcome of overheated property prices has been that a crucial toe-hold in the property market has been elusive...

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Further ‘affordable housing’ measures passed Parliament has passed the legislation allowing first home buyers to save for a deposit inside superannuation through the First Home Super Saver Scheme (FHSSS), and also allowing older Australians to ‘downsize’ and then contribute the proceeds of the sale of their family home into superannuation. From 1 July 2018, a...

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December 2017 – Practice Update Tax legislation passed The Government has passed changes to the tax legislation that will limit, or deny, deductions for travel expenses and depreciation claims for certain residential premises. Legislation to impose vacancy fees on foreign acquisitions of residential land has also been passed. ATO relief for SMSFs reporting ‘transfer balance...

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Property investment is often seen as less risky than other types of investment, but there’s still plenty to consider. A diversified investment portfolio is a good way to maximise returns and balance risk exposure. Once you have a property in mind, consider what income you expect to receive from it, as well as what your...

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SMSFs give you more control over how you manage your super, by allowing you to choose where you invest your super benefit. They can be a great vehicle to take back control of your Super, but may not be right for everyone: SMSFs are best-suited to people with extensive knowledge of financial as well as legal matters....

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