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February 2021 – Practice Update

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February 12, 2021

Staff Update

After 7 years at reception, Kay has decided to leave Hughes O’Dea Corredig, her last day being 25th February 2021.

We wish Kay all the best for the future, words are insufficient to express our gratefulness and appreciation of all that Kay has done at reception and at Hughes O’Dea Corredig during this time.

Shortcut rate for claiming home office expenses extended

The ATO has extended (again) the ability to utilise the “shortcut rate” for claiming home office running expenses to 30 June 2021 (it previously only applied until 31 December 2020).

The ATO’s guideline allows certain taxpayers to claim a fixed rate per hour (80 cents per hour) for most additional running expenses incurred when working from home by keeping a record of the number of hours they have worked from home, rather than needing to calculate specific running expenses.

The expenses included in the shortcut rate include lighting, heating, cooling and cleaning costs, the decline in value and repair of home office items (such as furniture and furnishings in the area used for work, computers and laptops, etc.), and phone and internet expenses.

However, the guideline does not cover “occupancy expenses”, such as rent, mortgage interest, property insurance and land taxes.

ATO data-matching programs

The ATO has announced it will engage in the following data-matching programs:

  • it will acquire motor vehicle registry data from state and territory motor vehicle registry authorities for 2019/20 through to 2021/22, with records relating to approximately 1.5 million individuals to be obtained each financial year; and
  • it will acquire data on Australian sales made through online selling platforms for the 2018/19 through to 2022/23 financial years, collecting 20,000 to 30,000 account records each financial year (with around half of the matched accounts relating to individuals).

These records will be electronically matched with ATO data holdings to identify non-compliance with registration, lodgment, reporting and payment obligations under taxation laws.

JobMaker Hiring Credit scheme: Claims open from 1 February 2021

The JobMaker Hiring Credit is being administered by the ATO and provides a wage subsidy payment directly to employers as an incentive to employ additional job seekers aged 16 to 35 years.

Registrations for the JobMaker Hiring Credit scheme opened on 7 December 2020, and claims for the first JobMaker period can be made from 1 February 2021, provided employers are registered and meet all eligibility requirements.

Employer eligibility requirements include that applicants:

  • are up to date with their tax and GST lodgment obligations for the last 2 years;
  • have not claimed JobKeeper payments for a fortnight that started during the JobMaker period; and
  • are reporting through Single Touch Payroll.

The ATO will be writing to employers who have registered for the JobMaker Hiring Credit from 15 January 2021, encouraging them to check that they meet all JobMaker Hiring Credit eligibility criteria before they claim, to ensure that registrants can make a claim from 1 February 2021 and there are no delays in them receiving their payments.

Cash payment limit Bill shelved

It appears that the Government has decided not to proceed with its proposal to limit cash payments in Australia to $10,000.

This measure was originally raised as part of the 2018/19 Budget, and the Government subsequently introduced a Bill to the House of Representatives, proposing to make it an offence for entities to make or accept cash payments of $10,000 or more.

That Bill passed the House and was then introduced to the Senate on 11 November 2019, but proceeded no further, and the Government withdrew the Bill from the Senate on 3 December 2020.

Reminder on Victorian Small Business Digital Adaptation Program

As previously mentioned in our September newsletter, to help sole traders, micro and small businesses in Victoria become digitised, the Victorian Government has launched the Small Business Digital Adaptation Program. The program provides businesses with a rebate of $1,200 towards business management software. Registrations close at 11.59pm on 28th February 2021, so there’s still time to apply.

Superannuation Contributions – 67 is the new 65

Recent changes now allow contributions to be received by a superannuation fund for a member up to the age of 67 without meeting the work test. This change was raised in the 2018-19 Federal Budget but only recently became legislated. Contribution limits still apply and are based on a members total superannuation balance at the last 30 June.

Further information about non-concessional contributions can be found HERE.

Further information about concessional contributions can be found HERE:

Superannuation Contributions – Potential contribution cap changes from 1 July 2021

Its expected that the concessional contribution cap will be indexed on 1 July 2021, which in turn will increase the non-concessional contribution cap. If the concessional contribution cap is indexed on 1 July 2021, the caps will be:

  • concessional contribution cap $27,500, and
  • non-concessional contribution cap $110,000.

The concessional contribution cap is indexed to full-time average weekly ordinary time earnings (AWOTE), in increments of $2,500. The indexed value must exceed $27,500. The non-concessional cap is four times the CC cap.

AWOTE index values are issued twice per year, for the June and December quarters. The base quarter for indexation of the CC cap is the December quarter of 2016. Based on the June 2020 quarter index, the CC cap has already exceeded $27,500. For indexation not to occur, AWOTE would need to decrease significantly. This is unlikely but possible. The December AWOTE is due for release on 25 February 2021. Stay tuned!

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should contact Hughes O’Dea Corredig to independently verify their interpretation and the information’s applicability to their particular circumstances.

 

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