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See below for updates for Tax Determinations, Australian Taxation Office warnings, annual federal budget, income tax return checklists and changes in legislation for superannuation, small business, individuals, trusts and partnerships.

September 2020

Superannuation guarantee rate increase update

The rate of superannuation guarantee has been frozen at 9.5% of an employee's ordinary wages since July 2014, but from 1 July 2021 it is due to incrementally increase (by 0.5% each financial year) until it ultimately reaches 12% in July 2025.

As a result, the superannuation guarantee rate is currently set to increase to 10% from 1 July 2021.

Also in this month's update:

  • Superannuation guarantee amnesty ends 7 September 2020
  • JobKeeper 2.0 - tweaks to the 'Decline in Turnover' Tests
  • Expanded eligible employee definition for JobKeeper

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If you have any queries please do not hesitate to contact us.

August 2020

Extension of the JobKeeper Payment

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 seven new JobKeeper fortnights that commence on 28 September 2020 and end on 3 January 2021; and
  • Extension period 2 – which covers the six new JobKeeper fortnights that commence on 4 January 2021 and end on 28 March 2021.

In addition, there are new rules for the JobKeeper Extension periods as follows:

  • New actual decline in turnover tests for both periods; and
  • Eligibility criteria that determines Tier 1 & Tier 2 payment rates for employees and business participants.

We will provide further information on our Coronavirus Info page as it comes to hand.

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80 cents per hour 'shortcut' method for home office expenses has been extended 

Back in April 2020 the ATO announced that a 'shortcut' method was to be made available to  use from 1 March 2020 until 30 June 2020 for individuals claiming home office expenses due to COVID-19. The ATO has recently announced an extension of this shortcut method to also include 1 July 2020 to 30 September 2020.

If you have any queries please do not hesitate to contact us.

July 2020

Extending the Instant Asset Write-Off

This legislation amends the income tax law to allow a business with an aggregated turnover for the income year of less than $500 million to immediately deduct the cost of a depreciating asset (instant asset write-off). The asset must cost less than a threshold of $150,000 and be first used or installed ready for use for a taxable purpose by 31 December 2020. Without these amendments the $150,000 instant asset write-off would have ended on 30 June 2020.

Testamentary trusts and minors

This legislation contains amendments to ensure the tax concessions available to minors in relation to income from a testamentary trust only apply in respect of income generated from assets of the deceased estate that are transferred to the testamentary trust (or the proceeds of the disposal or investment of those assets).

Also in this month's edition:

  • Regulations confirm no SG obligation on JobKeeper payments where work is not performed
  • COVID-19 and Division 7A relief

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If you have any queries please do not hesitate to contact us. 

June 2020

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 JobKeeper payments for the previous month.

As part of the declaration, businesses will need to:

  • ensure they have paid their eligible employees at least $1,500 (before tax) in each JobKeeper fortnight they are claiming for;
  • re-confirm their eligible employees, including notifying if an eligible employee has changed or left employment; and
  • provide the current and projected GST turnover of the business – note, this is not a retest of the eligibility of the business.

For example, to claim JobKeeper payments for the May 2020 JobKeeper fortnights, businesses must report their GST turnover for the month of May 2020 as well as their projected GST turnover for the month of June 2020 by 14 June 2020.

The monthly declaration can be lodged through the ATO business portal or through STP-enabled software. Alternatively, tax agents can assist clients by lodging the monthly declaration on behalf of registered clients.

Additionally in this month's update:

  • ATO reminder for employers – Finalise STP data for 2020
  • Guidance on JobKeeper reporting via STP
  • COVID-19 and tax depreciation reports – are physical inspections necessary?

Read more

If you have any queries please do not hesitate to contact us.

May 2020

Court confirms ATO's position on foreign income tax offsets

The ATO has welcomed the decision of the High Court to basically uphold the decision of the Full Federal Court in a case which the ATO won, in relation to foreign income tax offsets ('FITO').

An Australian tax resident had sold some US investments and paid US tax on the gains.

The taxpayer was then basically taxed on half of those gains in his assessable Australian income (i.e., the gains were eligible for the CGT discount in Australia).

The taxpayer included the whole of the US tax paid in his FITO to offset against his Australian income tax.

However, when determining the FITO available, the ATO only allowed the proportion of the US tax paid that related to the capital gain included in his Australian assessable income.

Also in this month's edition:

  • Employer's requirements and the deductibility of WREs
  • SMS scam targeting natural disaster victims
  • Further STP developments
  • Valuing car parking fringe benefits

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If you have any queries please do not hesitate to contact us.

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