The due date for employers to make super guarantee contributions for their employees for the June 2021 quarter is 28 July 2021.
Note that the super guarantee rate in relation to salary and wages paid on or before 30 June 2021 is 9.5%, but the super guarantee rate is 10% in relation to salary and wages paid from 1 July 2021 (even if they are paid in relation to work performed before that date).
Also, contributions made (and received by the fund) after 30 June 2021 will not be deductible in the 2021 income year, even if they are made in relation to work performed during the 2021 income year.
Under a complying Division 7A loan from a private company, the borrower must make minimum yearly repayments (‘MYR’) before the end of the lender’s income year to avoid the loan being treated as an assessable dividend.
To offer more support due to the ongoing effects of COVID-19, an extension of the repayment period is now available for those who were unable to make their MYRs by the end of the lender’s 2020/21 income year (generally 30 June).
The borrower can apply for this administrative relief using the ATO’s streamlined online application. Note that they must still make up the shortfall of their 2020/21 MYR by 30 June 2022.
A similar extension was also available for the MYR for the 2019/20 year, and borrowers who obtained this extension needed to have made up that shortfall by 30 June 2021. If they didn’t meet this deadline, they will need to either obtain a further extension of time for the 2019/20 MYR outside the streamlined process, or amend their 2019/20 tax return to include a dividend.
The ATO has provided updates regarding the tax implications when a landlord gives, or a tenant receives, rent concessions (such as waivers or deferrals of rent) as a result of COVID-19.
For example, the ATO provides the following advice for tenants that have received a rent waiver.
If the waived rent is related to a past period of occupancy that the tenant has already incurred and claimed a deduction for, they are still entitled to that deduction.
If the waived rent is related to a future period of occupancy, they will not be entitled to a deduction for that amount.
These types of rent concessions can give rise to various tax implications for both tenants and landlords (including GST implications), so please contact our office if you would like assistance in this regard.
The ATO knows that many taxpayers are facing lasting impacts left in the wake of natural disasters, so if they find their records have been lost or destroyed, whether in cyclones, floods or bushfires, the ATO can help. According to ATO Assistant Commissioner Tim Loh:
“If you have a myGov account linked to the ATO, you’ll be able to view some of your records, including income tax returns, income statements and previous notices of assessments. If you lodge through a registered tax agent, they can also access these documents on your behalf.”
Government agencies, private health funds, financial institutions and businesses provide information to the ATO which is available to tax agents and automatically included in returns by the end of July.
If taxpayers have lost receipts due to a natural disaster, the ATO can accept reasonable claims without evidence, so long as it’s not reasonably possible to access the original documents (although the taxpayer may be required to tell the ATO how they calculated the claim).
Since February 2020, the ATO has been issuing alerts via email and SMS when certain changes are made to a self-managed super fund (‘SMSF’).
With the inclusion of SMSF rollovers in SuperStream, the ATO will send the fund an email and/or text message alert when the fund uses the SMSF verification service (‘SVS’) to verify the SMSF’s details before making a rollover.
Note that funds may use this service multiple times when actioning a single rollover request, which may result in receiving multiple alerts. These alerts are being sent to help safeguard retirement savings and reduce the risk of fraud or misconduct. If a fund receives an alert and is already aware of the rollover request, there is nothing more that needs to be done.
However, if a member didn’t request a rollover to be made to an SMSF, or they want more information, they will need to contact their existing super fund(s) as a matter of priority, as rollovers through SuperStream may be processed in as little as 3 business days.
The ATO has confirmed that the following interest rates charged under a limited recourse borrowing arrangement (‘LRBA’) to an SMSF would be consistent with the safe harbour terms the ATO will accept for the 2021/22 financial year.
Real property: 5.10%
Listed shares or units: 7.10%
Note that these rates are unchanged from those the ATO accepted for the 2020/21 year.
The ATO has advised that it will engage in two new data matching programs, as outlined below:
Although 2019/2020 saw a temporary lull in the ATO and all other State & Federal government revenue authorities usual activity level due to the COVID-19 pandemic, 2021 is already set to be as busy as ever when it comes to audits and reviews initiated by government revenue authorities. Our audit insurance provider, Accountancy Insurance has noted the following as the four most frequent claim types they saw from Australian taxpayers for the 2019/2020 financial year were:
Employer Obligation audits and reviews were the highest claim category in December 2020. GST Audits and JobKeeper claims also remained consistent in December 2020 with the previous months.
In 2021, Accountancy Insurance expect to see a lot of ATO audit activity in:
Employer Obligation audits and reviews (PAYG/SG/FBT): Data captured from Single Touch Payroll (STP) continues to become more detailed and sophisticated, feeding increased information to the ATO. This is a significant contributing factor in making claims in this area so prevalent. Furthermore, very few employers will have used the Superannuation Guarantee (SG) amnesty and many may have fallen behind on their SG obligations because of COVID-19 business cash flow pressures.
JobKeeper payment audits and reviews: The ATO has historically been very active in reviewing government benefit schemes. With so many Australian employers enrolled in JobKeeper, it is nothing short of a certainty that ATO audit activity will increase in 2021.
Cash flow boost payment. Activity statement audits and reviews: The ATO will continue its checks to ensure that cash flow boost payments reached those employers that were entitled to the payments and whilst the program drew to a close with the lodgement of 30 September 2020 activity statements we still expect to see ongoing audit activity in 2021.
For information on obtaining audit insurance for your business, personally, or for your SMSF, please contact your HOC advisor.
As part of improving our client service we are streamlining the process for individual clients receiving ATO tax return refunds.
Where in the past we have taken our fee from your refund, going forward we will be invoicing you at your tax appointment and would appreciate payment on the day. Likewise if we email/mail out your return to you we will invoice an invoice for payment. We will not be lodging the returns until our fee is paid.
We will be providing your banking details when lodging your personal tax return which will enable the ATO to deposit your refund directly to your nominated bank account, this will ensure you will get your refund sooner.
Please ensure we have your correct bank account details when we prepare your tax return. We will be requesting this information at the time of preparing your return.
As always, we appreciate your ongoing support and understanding as we adapt to this fluid situation and we will endeavour to keep you updated on any significant changes to these arrangements.
We hope you remain in good health and should you have any further queries or require additional assistance with the information herein, please do not hesitate to contact your Hughes O’Dea Corredig Consultant or one of our dedicated team members.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances
Tags: ATO, Coronavirus, COVID-19, GST, JobKeeper, JobKeeper Payment, JobKeeper Payment Extension, self-managed super, superannuaction, superannuation guarantee amnesty
Categorised in: Articles