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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.

April 2020

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 aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
  • A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset's cost.
  • Small and medium-sized businesses (and not-for-profit entities), with an aggregated annual turnover of less than $50 million that employ people, may be eligible to receive a total payment of up to $100,000 (with a minimum total payment of $20,000), based on their PAYG withholding obligations.

Other issues discussed in this month's update:

  • ATO's support measures to assist those affected by COVID-19
  • New laws can make directors personally liable for GST
  • New super guarantee amnesty
  • New vacant land tax measures
  • ATO's view on property investments

Read more

 

Australian Government and Australian Taxation Office COV-19 Business Assistance Measures:

 Further to our update last week, the Australian Government have released additional information in relation to business assistance measures as follows:

Treasury Statement:

  1. Boosting cash flow for employers, and
  2. Supporting apprentices and trainees.

Treasury Statement

Australian Taxation Office Statement:

  1. Deferring BAS payment dates,
  2. Changing BAS reporting cycles,
  3. PAYG instalment variations,
  4. Interest and penalty remissions, and
  5. Low interest payment plans.

Australian Taxation Office Statement

As these measures are quite technical, if you have any queries please do not hesitate to contact us.

Government announces increased tax benefits in response to the Coronavirus


The Government has announced its economic response to the Coronavirus in the form of a $17.6 billion economic stimulus package. The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.

The Key Tax Measures include:

  • Increased instant asset write-off threshold increase from $30,000 ($50 million aggregated turnover) to $150,000 ($500 million aggregated turnover)
  • A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions.
  • Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations.
  • Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that around half of those who will benefit will be pensioners.
  • Administrative relief from the ATO for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis. 

Additional Economic Stimulus Measures Include:

  • Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice's or trainee's wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000. Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. 
  • Assistance to severely affected regions – The Government has also committed to set aside $1 billion to support regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education

Employers will still need to meet their ongoing super guarantee obligations for their employees.

If you have any queries in relation to these tax incentives or require any assistance during these uncertain times, please do not hesitate to contact our office.

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March 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 discussed in this month's edition:

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

Superannuation Guarantee Amnesty Legislation Summary

Parliament has passed a new piece of legislation designed to grant special relief to employers who are behind on their superannuation guarantee payments for their employees. The amnesty period ends on 26 August 2020. These amnesty provisions may drastically reduce the penalties on the late payment of your superannuation guarantee amounts along with rendering them deductible where they otherwise would not be.

Item  Previous Previous
Late superannuation guarantee payments Non-deductible Deductible
Interest on late superannuation guarantee payments Payable Payable
Administration fee of $20 per employee per quarter Payable Not Payable
Penalties on late superannuation guarantee payments Payable (up to 20% of the late superannuation guarantee amount) Not Payable

 

In order to access these special amnesty provisions the following conditions must be met:

  • You must not have been assessed for a Superannuation Guarantee Charge amount nor been advised or informed by the Commissioner of Taxation that the ATO is examining or intends to examine a Superannuation Guarantee shortfall amount for that shortfall quarter.
  • You must submit a Superannuation Guarantee Charge statement with the ATO before 26 August 2020.
  • You must pay all outstanding Superannuation Guarantee Charge amounts on or before the due date, or have entered into a payment plan to pay all outstanding amounts, and
  • Any failure to pay the outstanding Superannuation Guarantee Charge amounts will cause you to cease qualifying for amnesty.

 

If you wish to make a submission under the amnesty, please contact Robert from our office.

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January & February 2020

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 350,000 taxpayers from 2016 to 2020 as part of its data-matching program. This information (provided by insurers) is intended to be used by the ATO as part of its compliance profiling activities.

Insurers are required to provide the ATO with policy information where the value of assets is equal to or exceeds the following thresholds:

  • Marine vessels $100,000
  • Motor vehicles $65,000
  • Thoroughbred horses $65,000
  • Fine art $100,000 per item
  • Aircraft $150,000

If you feel that you may be targeted by this latest ATO data collection activity and are concerned about the implications, please feel free to contact our office to discuss your individual circumstances.

Also in this months edition:

  • Disclosure of business tax debts
  • Mid-Year Economic and Fiscal Outlook
  • The ATO's Bushfire crisis response

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