Accounting, Business, Martin Lord & Co., Hornsby, Australia

July 2024

Wed, 10 Jul 2024 03:43:47 GMT

ATO's 'main residence exemption tips'

The main residence exemption needs to be considered in a variety of situations when a taxpayer sells a property they have lived in. The ATO hopes that the following tips will help in this regard:

Taxpayers should consider if they have started earning income from their home (in which case they may need to get a market valuation for CGT purposes).
When renting out a property that was their main residence, taxpayers need to consider whether to use the 6-year absence rule when they sell their property.
Taxpayers can only have one property as their main residence at a time. The only exception is the 6-month period when they move from one home to another.
Has the taxpayer's residency changed? If so, this may affect eligibility for the exemption.

Also discussed in this month's edition:

Reminder of June 2024 Quarter Superannuation Guarantee ('SG')
Notice of Medicare levy exemption data-matching program
Family trust elections and interposed entity elections
ATO may cancel inactive ABNs
New lodgment obligation for income tax exempt organisations
Taxpayers able to apply CGT small business concessions

Disclaimer: the above comments in this blog post 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.

To read more download our monthly practice update below:

June 2024

Fri, 07 Jun 2024 02:33:54 GMT

ATO's three focus areas this tax time

The ATO will be taking a close look this 'tax time' at the following common errors made by taxpayers:

Work related expenses:

Taxpayers using the 'revised fixed rate method' of calculating a working from home deduction must have comprehensive records to substantiate their claims, including records that show the actual number of hours they worked from home, and the additional running costs they incurred to claim a deduction.

Rental properties:

Performing general repairs and maintenance on a rental property can be claimed as an immediate deduction. However, expenses which are capital in nature (such as initial repairs on a newly purchased property) are not deductible as repairs or maintenance.

Failing to include all income in tax return:

The ATO warns taxpayers against rushing to lodge their tax return on 1 July. If they have received income from multiple sources, they need to wait until this is pre-filled in their tax return before lodging.

Also discussed in this month's edition:

End of financial year obligations for employers
Getting trust distributions right
Support available for businesses experiencing difficulties
Minimum yearly repayments on Division 7A loans
ATO issues notice of crypto assets data-matching program

To read more download our monthly practice update below:

May 2024

Fri, 03 May 2024 02:30:54 GMT

Government warns of 'malicious' myGov scammers

The Government has urged Australians to be vigilant regarding scammers who target ATO login details to commit tax fraud. The ATO has received a large number of reports of scammers using fake myGov sites to steal myGov sign-in details, which can be used to commit tax and refund fraud in other people's

names.

These criminals will often use text message or email to lure people into clicking a link using phrases such as 'You are due to receive an ATO Direct refund' or 'You have a new message in your myGov inbox - click here to view'.

The Government says the ATO or myGov will never send an email or text message with a link to sign in to myGov.

Last year, the ATO introduced new fraud controls to help protect Australians from online identity theft. This included using myGovID to strengthen security during the sign-in processes on myGov accounts, making it more difficult for criminals to gain access.

Also discussed in this month's edition:

What to know about disaster relief payments
Illegal early access to super
ATO issues warning about false invoicing arrangements
NFPs need to get ready for new return
Taxpayer unsuccessful in having excess contributions reallocated

To read more download our monthly practice update below:

April 2024

Mon, 08 Apr 2024 02:27:11 GMT

How to claim working from home expenses

Taxpayers who have been working from home this financial year, and who consequently incurred work-related expenses, have two ways to calculate their work from home deduction:

the actual cost method; or
the fixed rate method.

Using the fixed rate method, taxpayers can claim a rate of 67 cents per hour worked at home.

This amount covers additional running expenses, including electricity and gas, phone and internet usage, stationery, and computer consumables. A deduction for these costs cannot be claimed elsewhere in their tax return, although taxpayers can separately claim any depreciating assets, such as office furniture or technology.

Taxpayers need to have the right records, and the record-keeping requirements differ for the fixed rate method and the actual cost method.

Also discussed in this month's edition:

Reminder of March 2024 Quarter Superannuation Guarantee (‘SG’)
Quarterly TBAR lodgment reminder
Prepare for upcoming lodgments of SMSF annual returns
Taxpayer who lived and worked overseas found to be tax resident
Earning income for personal effort

To read more download our monthly practice update below:

March 2024

Mon, 11 Mar 2024 01:20:14 GMT

Super contribution caps to rise

The big news story for those contributing to super is that the contribution caps are set to increase from the 2025 income year.

The concessional contribution cap will increase from $27,500 to $30,000. This 'CC' cap is broadly applicable to employer super guarantee contributions, personal deductible contributions and salary sacrificed contributions.

The non-concessional contribution cap will increase from $110,000 to $120,000. This 'NCC' cap is generally applicable to personal non-deductible contributions.

The increase in the NCC cap also means that the maximum available under the three-year bring forward provisions will increase from $330,000 to $360,000. This is provided that the 'bring forward' is triggered on or after 1 July 2024.

The 'total superannuation balance' threshold for being able to make non-concessional contributions (and the pension general transfer balance cap) will remain at $1.9 million.

Also discussed in this month's edition:

Small business concessions
FBT time is fast approaching!
Jail sentence for fraudulent developer
Avoiding common Division 7A errors
Penalties soon to apply for overdue TPARs

To read more download our monthly practice update below:

January & February 2024

Mon, 04 Mar 2024 00:58:20 GMT

Government announces changes to proposed 'Stage 3' tax cuts

Despite previous assurances, and after much speculation, the Government has announced tweaks to the 'Stage 3' tax cuts that will apply from 1 July 2024.

More particularly, the Government proposes to:

reduce the 19% tax rate to 16%;
reduce the 32.5% tax rate to 30% for incomes between $45,000 and a new $135,000 threshold;
increase the threshold at which the 37% tax rate applies from $120,000 to $135,000; and
increase the threshold at which the 45% tax rate applies from $180,000 to $190,000.

The Medicare levy low-income thresholds for the 2024 income year will also be increased.

Also discussed in this month's edition:

Changes in reporting requirements for sporting clubs
Deductions denied for work-related expenses
Sale of land subject to GST
Melbourne man sentenced to jail for attempting to defraud the ATO
New ATO guidance on "who is an employee?"

To read more download our monthly practice update below:

December 2023

Mon, 11 Dec 2023 00:52:42 GMT

ATO warning regarding prohibited SMSF loans

Loans to members continue to be the highest reported contravention of the superannuation laws that the ATO sees in auditor contravention reports.

SMSF trustees should remember that they cannot loan money or provide other forms of financial assistance to a member or relative, and if they do, they can incur a penalty of up to $18,780. They may also be disqualified as a trustee.

SMSF trustees also cannot loan money to a related party, such as a business, where the value of the loan exceeds 5% of the value of the fund's total assets, as this is a prohibited 'in-house asset' investment.

If the SMSF's in-house assets exceed 5% of the total value of its assets at the end of the financial year, the trustee must prepare a plan to reduce their in-house assets to less than 5%, which must be implemented by the end of the following financial year.

If a trustee has made a prohibited loan from their SMSF, the loan must be repaid as soon as possible.

Also discussed in this month's edition:

ATO's lodgment penalty amnesty is about to end
Notice of officeholder datamatching program
Don't forget the two further 'boosts'!
Claiming deductions in relation to a holiday home
Reminder of December 2023 Quarter Superannuation Guarantee ('SG')

To read more download our monthly practice update below:

November 2023

Sun, 12 Nov 2023 23:16:04 GMT

Does your SMSF invest in Crypto?

The ATO has observed SMSF trustees losing crypto investments due to scams, theft, platform collapses, and lost passwords. Many crypto assets are not regulated as financial products, leaving trustees unprotected if a platform fails or is hacked. The ATO advises trustees to be aware of these risks and to seek financial advice before investing in crypto.

Also discussed in this month's edition:

1. Tax Implications for Support Payments:

Assess tax implications of government support payments.
Grants are generally taxable; some may be non-assessable.
Deduct expenses directly linked to assessable income.

2. Super Benefits Caution:

SMSF trustees must verify members' release conditions.
Unlawful releases face penalties; rules persist during pension phases.

3. ATO's Visa Data Program:

ATO monitors tax obligations via visa data.
Aims to detect fraud; affects around nine million individuals yearly.

4. Cybersecurity Advisory (ATO):

Cybercrime surged in FY2022 (one report every 7 minutes).
ATO recommends updates, multi-factor authentication, regular backups, and strong passphrases.

To read more download our monthly practice update below:

October 2023

Tue, 03 Oct 2023 04:45:38 GMT

Getting Your Taxes Right: A Quick Guide

With tax season in full swing, the Australian Taxation Office (ATO) has some important reminders for rental property owners and taxpayers.

Reporting Rental Income:

Report rental income in the year you receive it, not when your agent transfers it.
Report the full income before expenses like property management fees are subtracted.

Types of Rental Expenses:

Non-deductible Expenses: Includes personal use costs and capital expenses.
Immediate Deductions: For expenses like loan interest, council rates, repairs, and assets under $300.
Long-term Deductions: For expenses like 'capital works' and loan setup costs over multiple years.

Choosing PAYG Instalment Method:

Two methods: Instalment Amount (for steady income) and Instalment Rate (for variable income).
You can adjust instalments if needed.

GST Fraud Conviction:

A man sentenced to 7.5 years for fraudulent GST refunds.
ATO's Operation Protego tackles GST fraud.

Unused Concessional Contributions Cap:

If your super balance is under $500,000, you can contribute more than the regular cap, rolling it over for up to five years.

Deduction for Personal Super Contributions:

Ensure you meet 'notice requirements' to claim a deduction.
Accuracy and timely notifications are crucial.

To read more download our monthly practice update below:

September 2023

Mon, 04 Sep 2023 05:35:44 GMT

ATO Updates: What You Need to Know

1. SMSF Auditors:

Trustees must appoint approved SMSF auditors annually, 45 days before filing. Audits are mandatory, even with no activity. Auditors must be independent.

2. Easier Tax Returns:

The ATO is giving taxpayers with simple affairs the ‘green light’ to lodge their annual income tax returns. The ATO simplifies tax returns for most, but remember to add income from rentals or side gigs and await your notice of assessment. Tax-time tips include:

include all income
assess circumstances that occurred this year
records, records, records
wait for notice of assessment
stay alert to scams

3. 'Dependant' Differences:

'Dependant' varies for superannuation and tax. Ensure you understand who qualifies for tax-free super death benefits.

4. NALI Ruling:

Interest income from a unit trust isn't NALI if it's not excessive, per AAT.

5. Luxury Car Tax Rules:

ATO clarifies factors to determine a vehicle's principal purpose for Luxury Car Tax (LCT). Commercial vehicles designed for goods transport are excluded.

To read more download our monthly practice update below:

August 2023

nicholas@mlco.com.au (Nicholas Lord) — Thu, 10 Aug 2023 06:18:15 GMT

Stay Tax Savvy: Updates You Need to Know from this month:

Keeping up with tax changes is a must. Here are key updates:

1. GST Credit for Reimbursements:

Employers can claim GST credits for business-related employee reimbursements, not allowances or notional expenses.

2. TPAR Reminder:

Taxable Payments Annual Reports (TPAR) for contractors in specific services are due by August 28th. Maintain payment records to stay compliant.

3. Deduction Tweaks:

Deductions have changed:

Cents-per-kilometre method increased from 72c to 78c per km.
Car depreciation limit raised to $64,741.
Work from home expenses updated from 52c to 67c per hour, and taxpayers are no longer required to have a dedicated home office space.

4. Downsizer Contribution Extended:

Older Australians can boost super with main residence dwelling sale funds, known as "downsizer contributions", of up to $300,000 per individual or $600,000 per couple. The age requirement has been lowered from 60 to 55 for these downsizer contributions.

5. Excess Contribution Reallocation Denied:

AAT ruled no special circumstances for reallocating excess concessional contributions. Stay informed, consult pros, and act wisely. Always refer to official sources for details.

To read more download our monthly practice update below:

July 2023

nicholas@mlco.com.au (Nicholas Lord) — Mon, 10 Jul 2023 05:29:29 GMT

Here's a snapshot of key developments in taxation this month:

1. Super Guarantee Rate Increased

From July 1, 2023, the super guarantee rate for employee payments rises to 11%. Businesses must update payroll systems accordingly.

2. AMP Fined $24 Million for Charging Deceased Customers

AMP Group companies have been fined $24 million by the Federal Court for wrongfully charging insurance premiums and advice fees from over 2,000 deceased customers.

3. Changes to Minimum Super Income Payments

Starting 2024, COVID-19-related reductions in minimum drawdown requirements for account-based pensions will end.

4. Private Company Loan Compliance

The ATO reminds taxpayers to comply with private company loan repayment rules to avoid adverse tax implications.

5. Indexation of Transfer Balance Caps

Personal transfer balance caps will be indexed from July 1, 2023. Report events by June 30, 2023, for accurate cap calculations.

6. Non-Deductible Masters Course Fees

The AAT ruled that tuition fees for a Masters course aren't tax-deductible if not directly related to current work.

To read more download our monthly practice update below:

June 2023

Mon, 12 Jun 2023 05:18:13 GMT

Federal Budget 2023/24 Highlights & ATO's Tax Time Focus

The 2023/24 Federal Budget, revealed by Treasurer Jim Chalmers on 9 May 2023, introduces significant measures for economic growth. Key points include:

Superannuation Changes: Employers must pay superannuation alongside wages starting 1 July 2026.
Small Business Incentives: Businesses under $50 million turnover get a 20% deduction for energy-efficient expenses.
Capital Works Deduction: Depreciation rate for new build-to-rent projects rises from 2.5% to 4% per year.
Instant Asset Write-Off: Small businesses ($10 million turnover) can instantly write off assets up to $20,000 until 30 June 2024.
Depreciation Relief: Temporary full expensing extended to 30 June 2023; opt-out limit suspended until 30 June 2024.
Superannuation & Tax Changes: Adjustments to non-arm’s length income provisions, tax concessions for >$3 million super balance, and Medicare levy exemptions.

ATO's Tax Time Focus:

The ATO concentrates on three areas:

Rental Property Deductions
Work-Related Expenses
Capital Gains Tax

'Side Hustles' and ATO:

The ATO addresses modern 'side hustles' and emphasizes proper registration and tax compliance, offering guidance for new businesses.

Ride Sourcing Data-Matching:

The ATO gathers ride sourcing data to enhance compliance monitoring and education campaigns.

Stay informed, report accurately, and ensure a successful financial year ahead.

To read more download our monthly practice update below:

2023-24 Australian Federal Budget

nicholas@mlco.com.au (Nicholas Lord) — Tue, 09 May 2023 23:42:36 GMT

The 2023/24 Federal Budget includes several measures aimed at personal income tax, small businesses, superannuation, tax integrity, and other areas.

1. Personal income tax measures:

The Medicare levy low-income thresholds will be increased to provide cost-of-living relief for low-income individuals.
Lump sum payments in arrears will be exempted from the Medicare levy to ensure low-income taxpayers are not burdened with higher payments.

2. Small business measures:

The instant asset write-off threshold will be temporarily increased to $20,000, allowing small businesses to immediately deduct the full cost of eligible assets.
The Small Business Energy Incentive will enable businesses to deduct an additional 20% of the cost of eligible assets promoting electrification and energy efficiency.
A lodgment penalty amnesty program aims to encourage small businesses to re-engage with the tax system.
Quarterly tax instalments will be halved to provide cash flow support.

3. Superannuation measures:

The non-arm's length income provisions will be amended to limit taxable income for self-managed superannuation funds and exempt large APRA regulated funds.
The frequency of superannuation guarantee payments will increase to align with salary and wages payments.
Earnings on superannuation balances above $3 million will be taxed at 30%.

4. Tax integrity measures:

The general anti-avoidance rule will be expanded to address tax reduction schemes and income tax benefits.
Compliance programs for personal income tax, engagement with taxpayers, and superannuation guarantee underpayment will be extended and funded.
The Serious Financial Crime Taskforce and Serious Organised Crime program will be merged and funded for further disruption of criminal activities.

5. Other budget measures:

The capital works tax deduction for Build-To-Rent Developments will be accelerated, and the withholding tax rate on eligible fund payments reduced.
The eligibility for FBT exemption for plug-in hybrid electric cars will be sunsetted.
The measure providing pensioners with a Work Bonus income bank credit will be extended.

To read more, download a budget summary provided by the NTAA below:

May 2023

nicholas@mlco.com.au (Nicholas Lord) — Mon, 08 May 2023 06:53:03 GMT

As we approach the end of the financial year, there are several important updates that taxpayers should be aware of to ensure compliance with tax regulations. In this blog post, we summarize three key updates: the last chance to claim deductions under temporary full expensing, the residential investment property loan data-matching program, and the guidelines for calculating electric vehicle home charging rates.

Last Chance to Claim Deductions under Temporary Full Expensing: The temporary full expensing measure, available for the 2021, 2022, and 2023 income years, is set to end on 30 June 2023. Under this provision, businesses with an aggregated turnover of less than $5 billion can claim a deduction for the full cost of eligible new assets, including costs of improvements and eligible second-hand assets. Taxpayers can choose to opt out of temporary full expensing for some or all of their assets and claim deductions using other depreciation rules by notifying the ATO in their tax return.
Residential Investment Property Loan Data-Matching Program: The Australian Taxation Office (ATO) will acquire residential investment property loan data from authorized financial institutions for the 2021/22 through to 2025/26 financial years. This data includes client identification details, account details, transaction details, and property details. The ATO will use this information for education, online services, data analytics, insights, and compliance activities to ensure tax and super obligations are met and to detect fraud against the Commonwealth.
Electric Vehicle Home Charging Rates: The ATO has released draft guidelines outlining the methodology for calculating the cost of electricity when an electric vehicle (EV) is charged at an employee's or individual's home. Employers and individuals who meet the criteria can choose to use the methodology outlined in the draft guidelines or determine the actual cost of electricity. The draft guidelines provide an EV home charging rate of 4.2 cents per kilometer for the FBT or income year commencing on or after 1 April 2022. However, if charging costs are incurred at a commercial station, a choice must be made between using the EV home charging rate or the commercial charging station cost.

To read more download our monthly practice update below

April 2023

nicholas@mlco.com.au (Nicholas Lord) — Mon, 03 Apr 2023 06:06:28 GMT

Staying informed about changes in tax regulations is essential for individuals and employers alike. In this blog post, we will discuss some key updates that you should be aware of. From a new super tax for high-income individuals to exemptions for electric cars, these updates can have a significant impact on your financial obligations. Let's dive into the details.

New 15% Super Tax: Starting from July 1, 2025, the government plans to impose an additional 15% tax on individuals with more than $3 million in superannuation. This tax will apply to the annual movement in the value of the superannuation balance above the $3 million threshold. It's important to note that there is no limit on the size of superannuation account balances.
FBT Obligations: Employers need to be prepared for their Fringe Benefits Tax (FBT) obligations for the 2023 financial year. If you have provided fringe benefits to your employees or their associates between April 1, 2022, and March 31, 2023, you must self-assess your FBT liability, lodge an FBT return if necessary, pay the FBT owed by the due date, and calculate the reportable fringe benefits amount for each employee if it exceeds $2,000.
FBT Exemption for Electric Cars: Since July 1, 2022, eligible electric cars and associated expenses are exempt from FBT. To qualify for the exemption, the car must be a zero- or low-emissions vehicle, used by a current employee or their associate, and not subject to luxury car tax. This exemption presents an opportunity for businesses to embrace eco-friendly transportation options.
Tips to Reduce Study and Training Loan Balances: If you have a study and training loan balance, it's essential to consider methods of reducing the balance to avoid a hefty tax bill. While interest is not charged on these loans, they are subject to indexation based on the consumer price index. You can inform your employer about study loans, adjust withholding amounts, and make voluntary repayments before June 1 to minimize the impact of indexation.
Reminder of March 2023 Quarter Superannuation Guarantee (SG): Employers should be aware that the Superannuation Guarantee (SG) obligation for the January 1, 2023, to March 31, 2023, quarter is due by April 28, 2023. Failing to pay the correct amount on time may result in penalties and interest. Moreover, the compulsory SG rate increased to 10.5% from July 1, 2022, and will further increase to 11% from July 1, 2023.

To read more download our monthly practice update below

March 2023

nicholas@mlco.com.au (Nicholas Lord) — Thu, 09 Mar 2023 04:36:08 GMT

Significant change to claiming working from home expenses

Before 1 July 2022, an individual taxpayer that incurred additional deductible expenses as a result of working from home, had a choice of three methods to claim these expenses.

These choices were:

The shortcut method – which was available from 1 March 2020 to 30 June 2022;
The fixed-rate method – which was available from 1 July 1998 to 30 June 2022; or
Actual expenses, that is calculating the actual expenses incurred as a result of working from home (We note this method can be burdensome to apply in practice)

From 1 July 2022, as a result of the release of PCG 2023/1 by the ATO, the shortcut method and the fixed-rate method have been abolished.

A replacement method that can be used instead of the actual expenses method (which has not been abolished) is the revised fixed-rate method.

Revised 67c fixed-rate method

Under the revised fixed-rate method, a deduction can be claimed of 67 cents per hour for

energy expenses (electricity and gas),
internet expenses,
mobile and home phone expenses, and
stationery and computer consumables.

Other expenses associated with working from home, such as depreciation of home office furniture and a personally owned computer used at home for work purposes, will need to be calculated on an actual basis when using the revised fixed-rate method.

Eligibility

To claim a deduction under the new fixed-rate method, an individual needs to meet three criteria, which are:

The individual is working from home while carrying out their employment duties or carrying on their business on or after 1 July 2022;
They are incurring additional running expenses of the kind outlined in the above discussion as to what the 67 cents per hour amount reflects as a result of working from home;
They keep and retain relevant records in respect of the time they spend working from home and for the additional running expenses (covered by the rate per hour) they are incurring.

Record Keeping

There are strict record keeping requirements associated with this new method.

For the year ending 30 June 2023, a taxpayer using this new method will need to keep a record which is representative of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023.

The taxpayer will also need to keep a record of the total number of actual hours they worked from home for the period 1 March 2023 to 30 June 2023.

The record of the actual hours worked from home could be maintained by timesheets, rosters, timetracking apps, logs of time spent accessing employer systems or online business systems, or a diary kept contemporaneously.

For the year ending 30 June 2024 and later income years, a taxpayer using this method must also keep a record of actual hours worked from home for the entire year.

Under both the short-cut method and the previous fixed-rate method, there was no need for detailed record keeping of the actual hours worked from home. Estimates were acceptable. This is a significant change and increases the record keeping burden on taxpayers.

Another significant change, which results in an increase in record keeping obligations under the revised fixed-rate method, is that in relation to running costs such as energy costs, phone and internet costs, a taxpayer needs to maintain at least one monthly or quarterly bill.

This is because the ATO now requires proof that the individual has incurred the running costs represented by the 67 cents per hour deduction.

Further discussed in this month's edition:

Transfer balance cap indexation
ATO and Australian Federal Police crackdown on GST-fraud promoters

January & February 2023

nicholas@mlco.com.au (Nicholas Lord) — Thu, 02 Feb 2023 05:08:19 GMT

Electric vehicle FBT exemption legislation is now law

Legislation to make certain electric vehicles exempt from Fringe Benefits Tax (‘FBT’) has now been enacted into law.

Certain zero or low emissions vehicles provided as a car benefit on or after 1 July 2022, can be exempt from FBT.

For this exemption to apply various criteria need to be satisfied.

The car needs to have been both held and used for the first time by the employer on or after 1 July 2022 and it cannot have been subject to the luxury car tax when it was purchased.

For the 2023 income year, to qualify for this exemption, the car needs to cost less than the luxury car tax threshold for fuel efficient vehicles of $84,916. A vehicle is a zero or low emissions vehicle if it satisfies both of these conditions:

It is a:
battery electric vehicle; or
hydrogen fuel cell electric vehicle; or
plug-in hybrid electric vehicle.
It is a car designed to carry a load of less than 1 tonne and fewer than 9 passengers (including the driver).

Motorcycles and scooters are not cars for FBT purposes and do not qualify for the exemption, even if they are electric. Please note that in relation to plug-in hybrid electric vehicles, there is a specific limitation on the FBT exemption.

From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under FBT law. There are special provisions allowing the exemption to continue when a plug-in vehicle was provided as an exempt benefit under an agreement entered into before 1 April 2025 that continues after this date.

Although the private use of an eligible electric car is exempt from FBT, an employer still needs to include the notional value of the benefit when working out whether an employee has a reportable fringe benefits amount (‘RFBA’).

An employee has an RFBA if the total taxable value of certain fringe benefits provided to them (or their associate) is more than $2,000 in an FBT year. The RFBA must be reported through Single Touch Payroll or on the employee's payment summary.

The amount of an RFBA reported for an employee is not added to an employee’s taxable income for determining income tax and Medicare Levy liabilities.

Also discussed in this month's update includes:

Super guarantee contributions for the December 2022 quarter
Further eligibility age change for downsizer contributions
Builder unable to obtain refund of incorrectly charged GST

December 2022

nicholas@mlco.com.au (Nicholas Lord) — Thu, 01 Dec 2022 04:55:15 GMT

ATO warning to SMSFs: "Paying the price for non-compliance"

There are various courses of action available to the ATO when trustees of self-managed super funds ('SMSFs') have not complied with the super laws, including applying administrative penalties.

A number of factors determine the amount of the administrative penalty, including:

the type of contravention;
when it occurred; and
the number of penalty units that apply.

For example, if an SMSF contravenes a provision in relation to borrowings during the 2021/22 financial year, the ATO may apply a penalty of 60 penalty units and, at $222 per unit for that year, this would result in the SMSF trustee having to pay $13,320. This could be even more if there are

multiple contraventions.

Note that the Government recently introduced a Bill to increase the value of a penalty unit for Commonwealth offences committed on or

after 1 January 2023 from $222 to $275.

The ATO imposed total administrative penalties of around $3.4 million on SMSF trustees last year for

contraventions such as trustees illegally accessing super benefits, loans, or financial

assistance given to members.

Also, just because a trustee receives an administrative penalty doesn’t mean the ATO won't undertake any other compliance action, such as issuing a notice of non-compliance or disqualifying the relevant entity as a trustee.

Other important updates discussed in this month's update include:

ATO's record-keeping tips
Input tax credits denied due to lodging BASs late
Chef spending most of a year on cruise ships still a 'resident'
Requesting stapled super fund details for new employees

November 2022

nicholas@mlco.com.au (Nicholas Lord) — Mon, 07 Nov 2022 04:46:48 GMT

Director ID deadline is approaching

The Government has launched an awareness campaign to help company directors get their director identification number ('director ID') as the 30 November deadline approaches.

A director ID is a unique 15‑digit identifier that a company director will apply for once and keep forever. Director IDs are administered by the Australian Business Registry Services ('ABRS'), which is managed by the ATO.

All directors of companies registered with ASIC will need a director ID and must apply by the 30 November deadline (although directors of Aboriginal and Torres Strait Islander corporations may have additional time to apply). Some people may not realise they are directors, so the campaign is targeting those that run small businesses, self‑managed superannuation funds, charities, not‑for‑profits, and even some sporting clubs.

The fastest way to apply is online at abrs.gov.au, and the director ID will be issued instantly once the application is complete. It is free to apply and directors must apply themselves, as they are required to verify their identity (and it is this "robust identification process" that will help prevent the use of false and fraudulent director identities).

More information about director IDs, including who must apply, is available on the ABRS website.

October 2022

nicholas@mlco.com.au (Nicholas Lord) — Thu, 06 Oct 2022 04:27:29 GMT

Banking business income to a private account

The ATO has stated that it has "no concerns" with business owners banking their business takings or other sales in private accounts, but that this may become an issue when this income isn't reported. Therefore, the ATO notes that a good way to avoid this problem is to establish a separate business bank account and only deposit sales and other business income into this account, as this can help with record keeping and monitoring the business’s cash flow.

The ATO uses many tools to identify income earned and to check if it matches income reported, and reminds taxpayers that business income includes all sales, whether they're cash or electronic (for example, internet sales), and they must all be reported on the business’s tax return (as well as any earnings for services the business provides).

Other important news in this month's edition:

'Talking tax' with new workers
How the myGov update affects taxpayers
Input tax credits denied due to lodging BASs late
Valuing fund assets for an SMSF's annual return
Super guarantee contribution due date for September 2022 quarter
Varying PAYG instalments

September 2022

nicholas@mlco.com.au (Nicholas Lord) — Mon, 05 Sep 2022 05:20:55 GMT

More COVID-19 business grants are now tax-free

The Federal Government has expanded the list of State and Territory COVID-19 grant programs that may be tax-free to eligible businesses.

A State or Territory Government COVID-19 grant payment will generally be tax-free if:

the payment is received under a grant program that is formally declared to be an eligible program;
the recipient carried on a business and had an aggregated turnover of less than $50 million in the income year the payment was received, or in the previous income year; and
the payment was received in the 2021 or 2022 income year.

The following Victorian and ACT COVID-19 grant programs have recently been declared as eligible grant programs for these purposes:

Business Cost Assistance Program Round Two – Top Up (Victoria).
Business Cost Assistance Program Round Three (Victoria).
Business Cost Assistance Program Round Four (Victoria).
Business Cost Assistance Program Round Four – Construction (Victoria).
Business Cost Assistance Program Round Five (Victoria).
Commercial Landlord Hardship Fund 3 (Victoria).
Impacted Public Event Support Program Round Two (Victoria).
Licensed Hospitality Venue Fund 2021 – Top Up Payments (Victoria).
Live Performance Support Program (Presenters) Round Two (Victoria).
Live Performance Support Program (Suppliers) Round Two (Victoria).
HOMEFRONT 3 (ACT).

Further discussed in this month's update:

ATO reminder about appointing an SMSF auditor
Super comparison tool updated
Small business tax incentives back on the table
Rental properties and second-hand depreciating assets

August 2022

nicholas@mlco.com.au (Nicholas Lord) — Mon, 08 Aug 2022 05:11:14 GMT

Tax time focus on rental property income and deductions

The ATO is focusing on four major concerns this tax season when it comes to rental properties:

Include all rental incom e
Accuracy of expenses
Capital Gains Tax upon sale of a rental property
Record keeping

Also in this month's edition:

Sessional lecturer entitled to superannuation support
TD 2022/11 – Discretionary trusts and corporate beneficiaries
Pandemic Leave Disaster Payment reinstated

July 2022

nicholas@mlco.com.au (Nicholas Lord) — Mon, 11 Jul 2022 05:02:27 GMT

ATO’s small business focus for 2022 income year

The ATO announced that it will be focussing on the following matters for small business tax returns for the 2021/22 year:

Deductions that are private in nature and not related to business income, as well as overclaiming of business expenses (especially for taxpayers running a homebased business).
Omission of business income (e.g., income from the sharing economy or new business ventures).
Record keeping – including insufficient or non-existent records that are needed to substantiate claims.

The ATO acknowledges that it has been a tough couple of years for many small business owners and encourages taxpayers to act early to find a solution if they are getting behind in their tax obligations, either by contacting their tax agent or the ATO.

Also in this month's update:

ATO targeting SMSFs that fail to lodge annual returns
ATO updates ‘cents per kilometre’ rate for individuals
ATO to target ‘wash sales’ this Tax Time
Downsizer contributions age changes from 1 July 2022
Super guarantee contribution due date for June 2022 quarter

2022 End of Year Checklists

nicholas@mlco.com.au (Nicholas Lord) — Thu, 09 Jun 2022 02:04:40 GMT

Tax saving strategies prior to 1 July 2022:

Covered in our end of year checklist are strategies to maximise your deductions and related information required to substantiate your deductions.

Common claims made by Individuals:

Depreciating assets costing $300 or less
Clothing expenses
Self-education expenses
Other work-related expenses

Including all information required to collate your income

Maximising deductions for Businesses:

Prepayment strategies
Accelerating expenditure (including depreciation deductions)
Accrued expenditure
Small business taxpayer strategies

If you have any queries in relation to your end of year tax planning, please do not hesitate to contact us .

June 2022

nicholas@mlco.com.au (Nicholas Lord) — Thu, 09 Jun 2022 01:39:57 GMT

ATO priorities this tax time

The ATO has announced four key areas that it will be focusing on for Tax Time 2022:

Record-keeping.
Work-related expenses.
Rental property income and deductions.
Capital gains from crypto assets, property, and shares.

Before claiming income tax deductions for their expenses, taxpayers must ensure:

they spent the money themselves and were not reimbursed;
if an expense is for both income-producing and private use, only the portion relating to producing income is claimed; and
they have a record to prove it.

We are the experts in all four of the key areas of focus so if you have any queries please do not hesitate to contact us .

May 2022

Wed, 04 May 2022 01:28:52 GMT

No reduction in the Private Health Insurance rebate as of 1 April 2022

An event that we have become accustomed to every 1 April, is that the amount of the Private Health Insurance (‘PHI’) rebate decreases.

The Australian Government rebate on PHI is annually indexed on 1 April by a Rebate Adjustment Factor (‘RAF’) representing the difference between the Consumer Price Index and the industry weighted average increase in premiums.

The RAF for 2022 has been calculated as 1. This means there will be no changes to the PHI rebate on 1 April 2022.

Also discussed in this month's edition:

Disclosure of business tax debts
High Court rejects attempt to disclaim interest in trust distribution

April 2022

nicholas@mlco.com.au (Nicholas Lord) — Wed, 06 Apr 2022 04:48:37 GMT

2022-2023 Budget Measures that are now law

Low and Middle Income Tax Offset

A measure that will no doubt be beneficial for individual taxpayers is the increase in the Low and Middle Income Tax Offset (‘LMITO’) for the 2022 income year by $420. The LMITO is a tax offset which reduces an individual taxpayer’s tax liability.

This means that the maximum amount of the LMITO for the 2022 income year will now be $1,500 (up from $1,080 for the 2021 income year).

However, the LMITO will not be extended to the 2023 income year.

Reduction in Fuel Excise

Fuel excise on petrol and diesel will be reduced by 50% (a reduction of 22.1 cents per litre) from 30 March 2022 to 28 September 2022. This temporary reduction in the fuel excise is to soften the impact of increased petrol and diesel prices that have been triggered by Russia’s invasion of Ukraine.

Tax deductions for work-related COVID-19 tests

Last month’s edition of Practice Update discussed a proposal for COVID-19 tests, to be both:

tax-deductible; and
exempt from FBT;

broadly where they are purchased for workrelated purposes.

This proposed legislative change is now law with effect from 1 July 2021.

Other headlines from this month's update include:

Reminder of March 2022 Quarter Superannuation Guarantee (‘SG’)
Cents per kilometre deduction for car expenses – 2023 income year
JobMaker Year 2: adjusting baseline headcount
Re-contribution of COVID-19 early release super amounts
Penalties for overdue TPAR

March 2022

nicholas@mlco.com.au (Nicholas Lord) — Mon, 07 Mar 2022 00:25:44 GMT

Tax deductibility of COVID-19 test expenses

After much speculation, the Government announced that COVID-19 tests, including Polymerase Chain Reaction (‘PCR’) and Rapid Antigen Tests (‘RATs’), will be both:

tax-deductible; and
exempt from FBT;

broadly where they are purchased for work related purposes.

This will require the introduction of new specific legislation (i.e., to clarify that work-related COVID-19 test expenses incurred by individuals will be tax-deductible or FBT exempt where employers provide the tests to their staff) which will apply both where an individual is required to attend the workplace or has the option to work remotely.

The Government intends that these changes take effect from the beginning of the 2022 income year and will apply permanently once enacted.

Also discussed in this month's edition:

Super changes and full expensing 12-month extension now law
12-month extension of the temporary loss carry-back measure
Keeping and maintaining SMSF records
SMSF – statistical overview from 2020 lodgments published
New shield against debt recovery proposed for small business
Small employers and STP – the ATO gets serious

January & February 2022

nicholas@mlco.com.au (Nicholas Lord) — Mon, 07 Feb 2022 00:18:48 GMT

Service NSW 2022 Small Business Support Program

Eligible businesses with a turnover of between $75,000 and $50 million that experienced a minimum 40% decline in turnover in January 2022 – and the first fortnight of February 2022 – can apply for support through this program.

Employing businesses will be eligible to receive 20% of weekly payroll as a lump sum for the month of February, with a minimum payment of $750 per week and a maximum payment of $5000 per week.

Non-employing businesses will receive $500 per week, paid as a lump sum of $2000.

The 2022 Small Business Support Program is for the month of February only.

Businesses will be able to apply through Service NSW from mid-February in 2022.

Most customers submitting complete and eligible applications through Service NSW should receive payment within 5 to 15 days of applying.

Payment timeframes can sometimes be extended if applications are:

incomplete
require additional verification
potential fraudulent behaviour is identified.

Customers will be contacted by Service NSW and asked to provide any additional information they need to finalise their application.

Additional matters included in this month's update:

ATO support for businesses in difficult times
Government extends SME Recovery Loan Scheme to 30 June 2022
COVID-19 vaccination incentives and rewards
Higher PAYG withholding rates continue to apply to backpackers
Single Touch Payroll exemption extended for WPN holders
Payment extension relating to JobKeeper objections

December 2021

nicholas@mlco.com.au (Nicholas Lord) — Mon, 06 Dec 2021 00:09:40 GMT

Preparing for the new Director ID regime

As part of its Digital Business Plan, the Government announced the full implementation of the 'Modernising Business Registers' program.

This included recently enacted legislation introducing the new director identification number ('director ID') regime.

The director ID is a unique identifier that a director will need to apply for once and will keep forever.

The introduction of director IDs is intended to create a fairer business environment by helping prevent the use of false and fraudulent director identities, which "will go a long way to better identifying and eliminating director involvement in unlawful activity".

Note: all directors will need to apply for a director ID, including directors of corporate trustees of self-managed super funds ('SMSFs') and of family trusts.

Individuals will be able to apply for a director ID from 1 November 2021 on the new Australian Business Registry Services ('ABRS') website (at

abrs.gov.au) and will need to log in using the myGovID app (set to a 'Standard' or 'Strong' identity strength).

When an individual must apply for a director ID depends on the date they became a director. For directors under the Corporations Act:

who became a director on or before 31 October 2021, they must apply for a director ID by 30 November 2022;
who become a director between 1 November 2021 and 4 April 2022, they must apply for a director ID within 28 days of appointment; and
who become a director from 5 April 2022, they must apply for a director ID before their appointment.

Individuals will need to apply for their director ID themselves to verify their identity (i.e., no one can apply for it on their behalf, including agents).

Other matters covered in this month's edition include:

Varying PAYG instalments due to COVID-19
Permanent changes to AGMs and electronic communications
AUSTRAC transaction report information data-matching program
Government payments datamatching program
Super is now following new employees
ABN 'intent to cancel' program
'Backpacker tax' may not apply to some backpackers
Beware of scams
Managing business cash flow
Data-matching program: Services Australia benefits and entitlements
Director Resignation Changes

October 2021

nicholas@mlco.com.au (Nicholas Lord) — Sun, 03 Oct 2021 23:55:58 GMT

Extra super step when hiring new employees

Employers may soon need to do something extra when a new employee starts to work for them.

Currently, if a new employee does not choose their own fund, their employer can pay contributions for them to a default fund.

From 1 November 2021, if a new employee does not choose a specific fund, their employer may need to request the employee’s ‘stapled super fund’ details from the ATO.

A stapled super fund is an existing account which is linked (or 'stapled') to an individual employee, so it follows them as they change jobs.

Businesses will be able to request stapled super fund details for new employees using ‘Online services for business’, or by asking their registered tax or BAS agent to do this for them.

Further in this month's update:

ATO support for employers with expansion of STP
Reminder for first-time share investors to declare income
Documenting gifts or loans from related overseas entities
Additional ATO support during COVID-19
Paid Parental Leave changes support parents in lockdown
Reminder of SG obligations for September 2021 quarter

September 2021

Mon, 06 Sep 2021 00:21:44 GMT

Extending administrative relief for companies to use technology

The Government has passed legislation renewing the temporary relief that allows companies to use technology to meet regulatory requirements under the Corporations Act 2001.

These temporary relief measures will allow companies to hold virtual meetings and use electronic communications to send meeting materials and execute documents until 31 March 2022. This should ensure that companies can meet their obligations as they continue to deal with the uncertainty of the COVID-19 pandemic.

With the extension of this temporary relief, the Government will now seek to introduce permanent reforms later this year to give companies the flexibility to use technology to hold meetings, such as hybrid meetings, and sign and send documents.

Also in this month's update:

Expansion of support for SMEs to access funding
ATO warns property investors about common tax traps
Division 293 concessional contribution assessments have been issued
Travel allowances and 'LAFHAs'
Time running out to register for the JobMaker Hiring Credit
Labor commits to income tax cuts and certainty on negative gearing

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

August 2021

Sun, 15 Aug 2021 23:00:00 GMT

Reminder of superannuation caps indexation for 2022

From 1 July 2021, the superannuation contributions caps have been indexed for the 2022 income year.

The new concessional contributions cap for the 2022 financial year is now $27,500 (increased from $25,000). The new non-concessional (i.e., non-deductible) contributions cap for the 2022financial year is now $110,000 or (where the 'bring forward' rules are applicable) $330,000 over three years (increased from $100,000 or $300,000 respectively).

Other headlines in this month's update:

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

July 2021

Tue, 13 Jul 2021 23:00:00 GMT

Super guarantee contribution due date for June 2021 quarter

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.

Also covered in this month's edition:

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

NSW Cash Flow Boost & Boosted Disaster Payment

Mon, 12 Jul 2021 23:00:00 GMT

New NSW support measures

Businesses in NSW can now expect new support payments and larger grants, while individuals are set to receive increased disaster payments as the state battens down the hatches in the face of an extended lockdown.

Here's a list of key measures announced as at 13 July 2021:

New business support payments:

A new direct payment to be made available to entities with an annual turnover between $75,000 and $50 million who can demonstrate a 30 per cent decline in turnover compared with an equivalent two-week period in 2019.
Eligible entities will be required to maintain their full-time, part-time and long-term casual staffing level as of 13 July.
Eligible entities, which include not-for-profits, will receive payments of between $1,500 and $10,000 per week based on the level of their payroll.
For non-employing businesses, such as sole traders, the payment will be set at $1,000 per week.
The payments will be administered by Service NSW, with registrations of interest to open on Wednesday, 14 July.

Expanded business grants, payroll support, tax relief:

Eligible businesses with wages below $10 million can claim grants between $7,500 and $15,000 to cover the first three weeks of restrictions.
A new $1,500 per fortnight payment for micro-businesses with a turnover of between $30,000 and $75,000 which experience a decline in turnover of 30 per cent.
Payroll tax waivers of 25 per cent for businesses with wages of between $1.2 million and $10 million that have experienced a 30 per cent decline in turnover.
A capped grant of up to $1,500 for residential landlords who are not liable to pay land tax who reduce rent for tenants estimated at $210 million.
Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants, up to 100 per cent of the 2021 land tax year liability.
A short-term eviction moratorium for rental arrears where a residential tenant suffers loss of income of 25 per cent due to COVID-19 and meets a range of criteria.

Individuals:

From 18 July, the COVID-19 Disaster Payment will increase from $500 to $600 each week if a person has lost 20 hours or more of work a week, or $325 to $375 each week if a person has lost between 8 and 20 hours of work.
The payment will be made available to NSW individuals outside Commonwealth- declared hotspots in Sydney if they have lost hours and satisfy the eligibility criteria.
The payment will be a recurring payment for approved recipients for as long as the Commonwealth-declared hotspot and lockdown restrictions remain in place. This will remove the need for recipients to re-claim for each seven-day period of a lockdown.

COVID 19 Disaster Payment Update

Wed, 07 Jul 2021 23:00:00 GMT

Scott Morrison announces expansion of COVID-19 payment for third week of lockdowns, liquid asset test waived

The Prime Minister has announced that the $10,000 liquid asset test is being waived in respect of the COVID-19 Disaster Payment from Services Australia.

To get the payment, you must be eligible for under both the General Eligibility Rules and the NSW Eligibility Rules:

General Eligibility Rules:

To get the COVID-19 Disaster Payment you must meet all of the following:

you're an Australian resident or hold an eligible working visa
you're 17 years or older
you don't get an income support payment, the Pandemic Leave Disaster Payment, a state or territory pandemic payment or a state small business payment for the same period
you live or work in a Commonwealth-declared COVID-19 hotspot
you had paid employment and because of a COVID-19 lockdown, hotspot or period of restricted movement you can't attend work on or after day 8
you've lost income on or after day 8 and don't have any appropriate paid leave entitlements

NSW eligibility rules:

If you live or work in NSW, you need to meet some specific eligibility rules to get the COVID- 19 Disaster Payment. You'll also need to meet all the general rules. You may get this payment if you lost income or work due to COVID-19 and you meet all the eligibility rules above. These are the general eligibility rules as well as any rules for the recognised event in NSW that affected you. Recognised events are COVID-19 lockdowns, hotspots or periods of restricted movement that last longer than 7 days.

Recognised NSW COVID-19 events:

Parts of Sydney locked down from 23 June 2021

City of Sydney
Waverley
Woollahra
Bayside
Canada Bay
Inner West
Randwick

Greater Sydney Local Government Areas from 26 June 2021

Blacktown
Blue Mountains
Burwood
Camden
Campbelltown
Canterbury-Bankstown
Central Coast
Cumberland
Fairfield
Georges River
Hawkesbury
Hornsby
Hunters Hill
Ku-ring-gai
Lane Cove
Liverpool
Mosman
North Sydney
Northern Beaches
Parramatta
Penrith
Ryde
Shellharbour
Strathfield
Sutherland
The Hills
Willoughby
Wollondilly
Wollongong

How much are the payments:

If you lost less than 20 hours work, you'll get $325 for each recognised event, if you're eligible.

If you lost 20 hours or more of work, you'll get $500 for each recognised event, if you're eligible.

The COVID-19 Disaster Payment is a taxable payment. This means you'll need to include it in your income tax return.

How do you apply for the payment:

To apply, you need to use your myGov account to which you can link a Centrelink online account (if you have not already).

Once you log into Centrelink, you will need to answer a series of questions to determine your eligibility to claim the payment.

If eligible, your claim will be submitted and you will receive a notification via text or email that your claim has been successfully submitted.

Payments are being rapidly paid on the same day as the claim.

You will need to reapply weekly for the $500 or $325 claim through Centrelink.

We understand that this is an incredibly stressful time. If you have any queries please do not hesitate to contact us.

NSW Small Business Grant

Tue, 29 Jun 2021 23:00:00 GMT

NSW Small Business, Hospitality & Tourism Support Grants

The following is a summary of the key aspects announced by the NSW Premier 29 June 2021 in response to small business, hospitality & tourism support grants which are to become available later in July 2021.

The NSW government is offering small businesses support grants to help alleviate cash flow constraints while trading is restricted, with expanded criteria to assist most hospitality and tourism operators.

Three different grant amounts will be available for small businesses depending on the decline in turnover experienced during the restrictions: $10,000 for a 70 per cent decline, $7,000 for a 50 per cent decline and $5,000 for a 30 per cent decline.

Businesses will be able to apply for the grants through Service NSW from later in July and will need to show a decline in turnover across a minimum two-week period after the commencement of major restrictions on 26 June. We understand this decline in turnover will be determined over any two week period in July 2021 compared with the same two week period in July 2019.

How do the grants work?

1.Small Business COVID-19 Support Grant.

Available to businesses and sole traders with a turnover of more than $75,000 per annum but below the NSW government 2020–21 payroll tax threshold of $1,200,000 as at 1 July 2020.

These businesses must have fewer than 20 full-time equivalent employees and an Australian business number (ABN) registered in New South Wales or be able to demonstrate they are physically located and primarily operating in New South Wales.

2. Hospitality and Tourism COVID-19 Support Grant.

Available to tourism or hospitality businesses that have a turnover of more than $75,000 and an annual Australian wages bill of below $10 million, as at 1 July 2020. These businesses must have an Australian business number (ABN) registered in New South Wales or be able to demonstrate they are physically located and primarily operating in New South Wales.

Please note that businesses will need to provide Service NSW an accountant statement that confirms a loss in revenue for the time period compared to the same time in July 2019.

Payroll tax deferrals would be available to all businesses.

Full criteria will be available in coming days on the Service NSW website and we will provide you further updates when further information comes to hand.

June 2021

Mon, 07 Jun 2021 23:00:00 GMT

Cryptocurrency under the microscope this tax time

The ATO is concerned that many taxpayers believe their cryptocurrency gains are tax-free, or only taxable when the holdings are cashed back into Australian dollars.

ATO data analysis shows a dramatic increase in trading since the beginning of 2020, and has estimated that there are over 600,000 taxpayers that have invested in crypto-assets in recent years.

This year, the ATO will be writing to around100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns. The ATO also expects to prompt almost 300,000 taxpayers as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses.

Gains from cryptocurrency are similar to gains from other investments, such as shares. CGT also applies to the disposal of non-fungible tokens ('NFTs').

The ATO matches data from cryptocurrency designated service providers to individuals' tax returns, helping it to ensure investors are paying the right amount of tax.

"The best tip to nail your cryptocurrency gains and losses is to keep accurate records including dates of transactions, the value in Australian dollars at the time of the transactions, what the transactions were for, and who the other party was, even if it's just their wallet address"

- Assistant Commissioner Tim Loh.

Businesses or sole traders that are paid cryptocurrency for goods or services will have these payments taxed as income based on the value of the cryptocurrency in Australian dollars.

Holding a cryptocurrency for at least 12 months as an investment may mean the holder is entitled to a CGT discount if they have made a capital gain.

Matters further discussed in this month's issue:

End of Year Checklists

Mon, 07 Jun 2021 23:00:00 GMT

30 June 2021 End of Year Checklists

Covered in our end of year checklist are strategies to maximise your deductions and related information required to substantiate your deductions.

Common claims made by Individuals:

Maximising deductions for Businesses

If you have any queries in relation to your end of year tax planning, please do not hesitate to contact us .

May 2021 & Budget

Fri, 14 May 2021 23:00:00 GMT

Government proposal to modernise business communications

The Government has committed to modernising certain laws so that they are 'technology neutral', to enable easier communication between businesses, individuals and regulators.

The first phase of legislative reform will focus on key areas raised by stakeholders which are implementation-ready (ideally by the end of 2021), including:

Subsequent phases will consider reforms in additional areas that could benefit from greater technology neutrality, including communication with regulators, and product disclosure and recordkeeping requirements.

Also in this Month's Update:

2021/22 Federal Budget Summary

Key points for Individuals:

Key points for Businesses :

Key points for Superannuation :

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

April 2021

Fri, 09 Apr 2021 23:00:00 GMT

JobKeeper comes to an end

The ATO has advised that the final JobKeeper payment will be processed in April 2021.

Enrolled businesses do not have to do anything when the program closes, although they will need to complete their final March monthly business declaration by 14 April 2021.

Also, once a business is no longer claiming JobKeeper Payments, it may start to be eligible to receive the JobMaker Hiring Credit for any additional employees that started employment on or after 7 October 2020.

Also in this month's edition:

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

March 2021

Fri, 05 Mar 2021 22:00:00 GMT

Changes to STP reporting concessions from 1 July 2021

Small employers (19 or fewer employees) are currently exempt from reporting 'closely held' payees through Single Touch Payroll ('STP'). Also, a quarterly STP reporting option applies to micro employers (four or fewer employees). These concessions will end on 30 June 2021.

Also in this month's update:

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

January & February 2021

Wed, 03 Feb 2021 22:00:00 GMT

New measures applying from 1 January 2021 The Government has provided an update of a number of new measures which came into effect from 1 January 2021, including (among others): The most significant changes to Australia's insolvency framework in 30 years, which are intended to reduce costs, cut red tape and help more small businesses recover from the pandemic. The reforms introduce a new, simplified debt restructuring process. These measures apply to incorporated businesses with liabilities of less than $1 million - covering around 76% of businesses subject to insolvencies today, 98% of which have less than 20 employees. Australians will have more power to choose their own superannuation fund: 'Your Superannuation, Your Choice' allows around 800,000 Australians to decide where their retirement savings are invested, representing around 40% of all employees covered by a current enterprise agreement. The Government's HomeBuilder program has been extended to 31 March 2021. The scheme is expected to support the construction or major rebuild of an additional 15,000 homes. Major reforms to Australia's foreign investment framework take effect, with new requirements for foreign investors. Also in this month's edition: Shortcut rate for claiming home office expenses extended AAT decision on JobKeeper and backdated ABNs SMSF related party rental income deferrals due to COVID-19 ATO data-matching programs JobMaker Hiring Credit scheme: Claims open from 1 February 2021 Cash payment limit Bill shelved Read More If you have any queries please do not hesitate to contact us.

November 2020

Sat, 14 Nov 2020 22:00:00 GMT

Tax cuts pass Parliament

Tax relief for individuals

The Government brought forward 'Stage two' of their Personal Income Tax Plan by two years, so that, from 1 July 2020:

In addition, in 2020/21, low and middle-income earners will receive a one-off additional benefit of up to $1,080 from the low and middle income tax offset.

Tax relief for business

Businesses with a turnover of up to $5 billion are now able to immediately deduct the full cost of eligible depreciable assets as long as they are first used or installed by 30 June 2022.

To complement this, the Government will also temporarily allow companies with a turnover of up to $5 billion to offset tax losses against previous profits on which tax has been paid. Also, businesses with an aggregated annual turnover between $10 million and $50 million will, for the first time, be able to access up to ten small business tax concessions.

Under the changes passed by the Parliament, the Government will also enhance previously announced reforms to invest an additional $2 billion through the Research and Development Tax Incentive.

Further in this month's edition:

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

2020 Federal Budget

Wed, 07 Oct 2020 22:00:00 GMT

2020 Federal Budget The Federal Budget announced on Tuesday 6 October 2020 introduced a raft of emergency stimulus measures to create one million new jobs over the next four years. These emergency stimulus measures include: Personal tax cuts effective backdated to 1 July 2020; Outright tax deductions for eligible business assets; Loss carry-back provisions from 2019-20, 2020-21 and 2021-22 income years for eligible companies; FBT exemptions for retraining redeployed employees; JobMaker Hiring Credit for eligible employers who hire additional eligible employees between the ages of 16 and 35; Superannuation reforms for members; Best financial interests duties for superannuation trustees; 50% wage subsidies for new apprentices; and $250 cash payments for income support recipients. For more information, please carefully read the following : Federal Budget Summary Federal Budget Infographic

JobKeeper Extension Update

Wed, 16 Sep 2020 23:00:00 GMT

JobKeeper Extension Update

The Government announced that the JobKeeper Payment 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, JobKeeper Payments would now be made over two separate extension periods; JobKeeper Extension 1 and JobKeeper Extension 2.

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

September 2020

Thu, 10 Sep 2020 23:00:00 GMT

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.

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

August 2020

Mon, 17 Aug 2020 23:00:00 GMT

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:

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

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

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 .

JobKeeper 2.0

Tue, 21 Jul 2020 23:00:00 GMT

JobKeeper 2.0 Announced

JobKeeper payments will drop to between $750 and $1,200 per fortnight beyond September, with eligibility tightened, the government has revealed. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have announced that the current $1,500 per fortnight JobKeeper payment will be reduced to $1,200 per fortnight from 28 September, and $750 per fortnight for employees working less than 20 hours a week.

From 4 January, the rate will again fall to $1,000 per fortnight, and $650 for people working less than 20 hours a week. The program will run to 28 March 2021, at a further cost of $16 billion, taking the entire JobKeeper program to $86 billion.

The announcement comes after up to one in four of the 3.5 million workers currently covered under the program were earning $550 more than they would ordinarily.

New eligibility tests

Treasury had also argued for a fresh eligibility test for businesses looking to remain on JobKeeper beyond September. Businesses will still be required to demonstrate the required reduction in turnover- 30 per cent for businesses with turnovers of $1 billion or less, 50 per cent for those with turnover of more than $1 billion, and 15 per cent for ACNC-registered charities.

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

Further Details for JobKeeper 2.0

Tue, 21 Jul 2020 23:00:00 GMT

JobKeeper 2.0 Details

The existing JobKeeper Payment will continue as planned until 27 September 2020. The Government has announced yesterday that the payments will be extended to eligible businesses until 28 March 2021. However, there are significant changes to the regime:

Businesses must meet new and additional decline in turnover tests (based on actual GST turnover) to access payments in two new extension periods (28 September 2020 – 3 January 2021 and 4 January – 28 March 2021);
A tiered system of payments will apply from 27 September 2020, where the amount paid will be based on an employee's average hours worked per week before 1 March 2020. Those working on average 20 hours per week or more would be entitled to the higher tier payments and other eligible employees entitled to the lower tier payments; and
A staged reduction in the amount of payments – from 28 September 2020 to 3 January 2021 the higher tier payment will be $1,200 per fortnight, reducing to $1,000 per fortnight for 4 January to 28 March 2021, and the lower tier payment will be $750 per fortnight and $650 per fortnight for the same periods.

We highly recommend careful reading of this update in order to plan whether your business and employees may be eligible for JobKeeper 2.0.

We will post more information in relation to eligibility, enrolment and application once the details come to hand from the Treasury.

If you require any assistance in relation to JobKeeper 2.0 eligibility please do not hesitate to contact us .

July 2020

Sun, 05 Jul 2020 23:00:00 GMT

Treasury Laws

Amendments

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:

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

June 2020

Sun, 07 Jun 2020 23:00:00 GMT

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:

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:

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

May 2020

Sun, 03 May 2020 23:00:00 GMT

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:

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

JobKeeper Payment Scheme Update

Wed, 15 Apr 2020 23:00:00 GMT

In response to the JobKeeper Payment Scheme release from the ATO, please see below the following documents:

These documents should be reviewed carefully in conjunction with each other as are technical and complex.

If you require any assistance in relation to JobKeeper eligibility or enrollment, please do not hesitate to contact us .

COVID-19 Early Release of Super

Wed, 15 Apr 2020 23:00:00 GMT

Please see below the ATO's release on the COVID-19 Early Release on Superannuation

If you require any taxation advice in relation to COVID-19 Early Release on Superannuation, please do not hesitate to contact us .

ATO announces short cut method for claiming home office running costs

Mon, 06 Apr 2020 23:00:00 GMT

ATO announces short cut method for claiming home office running costs

The Australian Taxation Office ('ATO') has announced a temporary simplified short cut method to make it easier for individual taxpayers to claim deductions for additional running expenses incurred (e.g., additional heating, cooling and lighting costs), as a result of working from home due to the Coronavirus pandemic.

Based on the announcement, the ATO will allow individuals to claim a deduction for all running expenses incurred during the period 1 March 2020 to 30 June 2020 , based on a rate of 80 cents for each hour an individual carries out genuine work duties from home. This is an alternative method to claiming home running expenses under existing arrangements, which generally require an analysis of specific running expenses incurred and more onerous record-keeping.

ATO's 80 cents per hour method covers all running costs

The 80 cents per hour method is designed to cover all deductible running expenses associated with working from home and incurred from 1 March 2020 to 30 June 2020 , including the following:

Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work.
Cleaning costs for a dedicated work area.
Phone and internet expenses.
Computer consumables (e.g., printer paper and ink) and stationery
Depreciation of home office furniture and furnishings (e.g., an office desk and a chair).
Depreciation of home office equipment (e.g., a computer and a printer).

Latest Treasury Updates

Mon, 06 Apr 2020 23:00:00 GMT

Updated Coronavirus Treasury Fact Sheets

Summary of Economic Response to Coronavirus:

Support for Individuals & Households:

Support for Businesses:

National Cabinet Mandatory Code of Conduct SME Commercial Leasing Principles During Covid-19

Mon, 06 Apr 2020 23:00:00 GMT

National Cabinet Mandatory Code of Conduct SME Commercial Leasing Principles During Covid-19

April 2020

Thu, 02 Apr 2020 22:00:00 GMT

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

Proposed JobKeeper Payment

Sun, 29 Mar 2020 22:00:00 GMT

Please click on the following link for an update on the latest Proposed JobKeeper Payment. Proposed JobKeeper Payment

Loans Support Package Information

Tue, 24 Mar 2020 22:00:00 GMT

Please click on the following links for updates on the latest Loans Support Package. Loans Support Package

Government Stimulus Package and How To Apply For JobSeeker

Mon, 23 Mar 2020 22:00:00 GMT

Please click on the following links for updates on the latest Government Coronavirus Stimulus Package and a guide for How to Apply for JobSeeker

COV-19 Business Assistance Measures Update

Sat, 14 Mar 2020 22:00:00 GMT

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:

Australian Taxation Office Statement:

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

The Government's Coronavirus Economic Response

Wed, 11 Mar 2020 22:00:00 GMT

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:

ADDITIONAL ECONOMIC STIMULUS MEASURES INCLUDE:

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 .

March 2020

Thu, 05 Mar 2020 22:00:00 GMT

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:

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.

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

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

January & February 2020

Sun, 02 Feb 2020 22:00:00 GMT

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:

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:

Christmas Parties & Gifts 2019

Sun, 08 Dec 2019 22:00:00 GMT

Your Comprehensive Tax Guide to Year-end Staff Parties & Christmas Gifts

With the well earned holiday season around the corner, many employers will be planning to reward staff with a celebratory party or event. However, employers need to be aware of the FBT and income tax implications of providing 'entertainment' to staff and clients.

Year-end (and other ) staff parties - FBT and 'entertainment'

Under the FBT Act, employers must choose how they calculate their FBT meal entertainment liability, and most use either the 'actual method' or the '50/50 method ', rather than the '12-week method'.

Using the actual method

Under the actual method, entertainment costs are normally split up between employees (and their family) and non-employees (e.g., clients). Such expenditure on employees is deductible and liable to FBT. Expenditure on non-employees is not liable to FBT and not tax deductible.

Using the 50/50 method

Rather than apportion meal entertainment expenditure on the basis of actual attendance by employees, etc., many employers choose to use the more simple 50/50 method. Under this method (irrespective of where the party is held or who attends) 50% of the total expenditure is subject to FBT and 50% is tax deductible.

However, the following traps must be considered:

(*) Minor benefit exemption

The minor benefit exemption provides an exemption from FBT for most benefits of 'less than $300' that are provided to employees and their associates (e.g., family) on an infrequent and irregular basis. The ATO accepts that different benefits provided at, or about, the same time (such as a Christmas party and a gift) are not added together when applying this $300 threshold.

However, entertainment expenditure that is FBT exempt is also not deductible.

Note: 'Less than' $300 means no more than $299.99! A $300 gift to an employee will be caught for FBT, whereas a $299 gift may be exempt.

Example: Christmas party

An employer holds a Christmas party for its employees and their spouses – 40 attendees in all.

The cost of food and drink per person is $250 and no other benefits are provided.

If the actual method is used:

For all 40 employees and their spouses – no FBT is payable (i.e., by applying the minor benefit exemption), however, the party expenditure is not tax deductible.

If the 50/50 method is used:

The total expenditure is $10,000, so $5,000 (i.e., 50%) is liable to FBT and tax deductible.

Christmas gifts

With the holiday season approaching, many employers and businesses want to reward their staff and loyal clients/customers/suppliers. Again, it is important to understand how gifts to staff and clients, etc., are handled 'tax-wise'.

Gifts that are not considered to be 'entertainment'

These generally include a Christmas hamper, a bottle of whisky or wine, gift vouchers, a bottle of perfume, flowers or a pen set, etc.

Gifts that are considered to be 'entertainment'

These generally include, for example, tickets to attend the theatre, a live play, sporting event, movie or the like, a holiday airline ticket, or an admission ticket to an amusement centre.

As these tax considerations can be bewildering and overwhelming, please do not hesitate to contact us if you have any queries.

December 2019

Sun, 08 Dec 2019 22:00:00 GMT

No CGT main residence exemption for non-residents

The Government recently tabled legislation, making its second attempt to deny access to the CGT main residence exemption for individuals who are foreign residents (i.e., non-resident taxpayers for Australian tax purposes) . The restrictions to this CGT exemption will apply to taxpayers who are a non-resident at the time of the relevant CGT event (i.e., generally as at the contract date). If enacted, the proposed changes will potentially impact foreign residents in the two ways outlined below.

1. Transitional rules for properties held before 7:30pm (AEST) on 9 May 2017

Firstly, for properties held prior to the 2017 Federal Budget (i.e., before 7:30pm AEST on 9 May 2017), the CGT main residence exemption will only be able to be claimed, for a non-resident, for disposals that occur up until 30 June 2020.

For disposals of properties occurring on or after 1 July 2020, foreign residents will have no access to the CGT main residence exemption, unless specified 'life events' occur within a continuous period of six years of the taxpayer becoming a foreign resident. These 'life events' include:

2. Properties acquired at or after 7:30pm (AEST) 9 May 2017

Secondly, for properties acquired at or after the 2017 Budget night, the CGT main residence exemption will no longer be available for nonresident taxpayers, unless the same specified 'life events' (as outlined above) occur within a continuous period of six years of the taxpayer becoming a foreign resident.

If you own Australian real property and are thinking of moving overseas, or have moved overseas, please do not hesitate to contact us .

Also in this month's issue:

November 2019

Mon, 18 Nov 2019 22:00:00 GMT

Reporting asset disposals for CGT

As the ATO's data-matching capabilities increase, they are paying close attention to capital gains made on shares, property and cryptocurrency .

If you've disposed of any assets, and are unsure how to calculate the capital gain or loss on disposal, please do not hesitate to contact us .

Also in this month's edition:

October 2019

Thu, 03 Oct 2019 23:00:00 GMT

$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 that cost up to $30,000 and which were purchased and first used or installed ready for use from 7:30pm (AEDT) on 2 April 2019 to 30 June 2020. Medium sized businesses may purchase and claim a deduction for each asset that costs less than the $30,000 threshold. For assets over $30,000 the general depreciation rules apply (which may depend on the entity).

If you have any queries in relation to small business depreciation, please do not hesitate to contact us .

Also in this month's edition:

September 2019

Sun, 08 Sep 2019 23:00:00 GMT

"Outrageous" deductions rejected

The ATO has published some of the most unusual claims that they disallowed last financial year including:

and so on...

If you have any queries in relation to deductions, please do not hesitate to contact us .

Also in this month's edition:

August 2019

Mon, 19 Aug 2019 23:00:00 GMT

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 combination with the legislated removal of the 37% tax bracket in 2024/25, the Government is also "delivering structural reform to the tax system" by reducing the 32.5% tax rate to 30%.

In addition, from the 2018/19 income year (i.e., last income year):

The low and middle income tax offset ('LAMITO') has been increased from a maximum amount of $530 to $1,080 per annum and the base amount increased from $200 to $255 per annum ; and

The ATO is implementing the necessary system changes so taxpayers that have already lodged their 2018/19 tax return will receive any increase to the LAMITO they are entitled to (any tax refund should be deposited in the taxpayer's nominated bank account). There will not be any need to request an amendment.

Those who are yet to lodge their tax return will have any offset they are entitled to taken into account during the normal processing of their return.

Also in this month's update:

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

July 2019

Mon, 29 Jul 2019 23:00:00 GMT

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 made to contractors where the contractor does not provide an ABN and the business does not withhold any tax will also not be tax deductible from 1 July.

In addition to the loss of a tax deduction, employers caught not complying with their PAYG withholding obligations may be penalised for failing to withhold and report amounts under the PAYG withholding system. However, employers who mistakenly classify their employee as a contractor will not lose their deduction where their worker provides them with an ABN.

Uber Drivers not employees

The Fair Work Ombudsman has completed its investigation relating to Uber Australia Pty Ltd and its engagement of drivers, concluding that the relationship between Uber Australia and the drivers is not an employment relationship . The investigation found that Uber drivers are not subject to any formal or operational obligation to perform work.

Instead, Uber drivers have control over whether, when, and for how long they perform work, on any given day or on any given week, and, in particular, Uber Australia does not require drivers to perform work at particular times. As a consequence, the FWO will not take compliance action in relation to this matter.

Also in this month's update:

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

June 2019

Wed, 19 Jun 2019 23:00:00 GMT

Single Touch Payroll Update for Employers < 19 Employees

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 the ATO will also be "generous" in granting deferrals to small employers who need more time to start STP reporting).

Exemptions and deferrals:

Changes to Employees and Payment Summaries

The ATO has also reminded employees that how they get their end of financial year information from their employer, showing their earnings for the year, depends on how their employer reports their income, tax and super information to the ATO.

Specifically:

Also in this month's update:

Tax Saving Strategies Prior to 1 July 2019

Wed, 19 Jun 2019 23:00:00 GMT

End of year Checklists for Individuals and Businesses

Key notes for Individuals :

Key notes for Businesses :

May 2019

Sun, 05 May 2019 23:00:00 GMT

Federal Election Called & Budget Updates

Some notable budget proposals:

1. 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:

2. Allowing individuals aged 65 and 66 years to:

3. Increasing the upper threshold of the 19% personal income tax bracket to $45,000 from 1 July 2022, and reducing the 32.5% marginal tax rate to 30% from 1 July 2024 (in addition to changes already legislated).

4. Increasing the Low and Middle Income Tax Offset ('LAMITO'), with effect from the 2019 income year, to provide tax relief of up to $1,080 per annum, as well as an increased base amount of $255 per annum.

Also in this update:

If you have any questions, please do not hesitate to contact us

April 2019

Thu, 04 Apr 2019 22:00:00 GMT

ATO Crack Down on 'Cash Only' Small Businesses

The ATO has announced their intention to visit a further 10,000 small businesses across the country during the 2019/20 financial year, particularly those small businesses that advertise as 'cash only' and businesses that operate outside of ATO performance benchmarks. Industries under the microscope 'cash only' crack down include:

If your business is unsure about this particular issue, or if you want some peace of mind in the event of an ATO audit of your small business, please do not hesitate to contact us .

Also in this month's update:

March 2019

Mon, 04 Mar 2019 22:00:00 GMT

Changes to the small business instant asset write-off

On 29 January 2019, the Prime Minister announced that legislation will be introduced to:

The current threshold of $20,000 has applied since 7.30pm AEST on 12 May 2015 and was due to revert to $1,000 on 1 July 2019. Under the proposed changes, from 29 January 2019 until 30 June 2020, small businesses with an aggregated annual turnover of less than $10 million may claim an immediate deduction for the business-use portion of each depreciating asset costing less than $25,000.

Example:

To illustrate, assume an individual acquires a van for $22,000 (excluding GST entitlements) on 1 February 2019.

The individual is a small business entity and estimates the van will be used 90% for the business and 10% for private purposes.

Under the current rules, while the business-use portion of the cost of the van is less than $20,000 (i.e., $22,000 x 90% = $19,800), an immediate deduction is not available because the entire cost is $20,000 or more.

However, the van may be depreciated as part of the taxpayer's SBE small business pool.

In contrast, an immediate deduction of $19,800 may now be claimed under the proposed changes, as the entire cost of the van is below the new threshold of $25,000.

Also in this month's update:

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

December 2018

Mon, 03 Dec 2018 22:00:00 GMT

Company loans to shareholders rules under review

The Government has released a consultation paper outlining proposed reforms to 'simplify' the loan agreements that are generally required when a shareholder (or their associate) borrows funds (or receives a payment) from a related company. To avoid this, many shareholders enter into complying 'Division 7A loan agreements' (basically agreeing to repay the relevant amount within 7 years, or 25 years if the loan is secured).

With this in mind,Treasury is currently looking at (amongst other things):

No changes have been effected as yet with further clarity becoming available in early 2019.

Also in this month's update:

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

November 2018

Thu, 01 Nov 2018 22:00:00 GMT

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 year based on the previously legislated timeline).

Similarly, the increase in the tax discount to 16% for unincorporated entities will apply from the 2022 income year, rather than the 2027 income year.

Proposed expansion of Single Touch Payroll to smaller employers.

Single Touch Payroll ('STP') commenced on 1 July 2018 for approximately 73,000 employers who have 20 or more employees. There is currently legislation before Parliament to expand STP to all employers from 1 July 2019 and it is estimated that there will be more than 700,000 employers who will enter STP as a result.

Also in this month's update:

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

October 2018

Thu, 04 Oct 2018 23:00:00 GMT

Increased Scrutiny of Home Office Claims

The ATO has flagged that a record $7.9billion was claimed in Item D5 'Other Work Related Expenses', which includes home office expenses.

In particular, the ATO has flagged their concerns relating to taxpayers who are claiming:

Further, the ATO has warned that it may contact employers directly to verify expenses in connection with employees working from home.

As a reminder, taxpayers should consider the 'three golden rules' when claiming work-from-home deductions, being:

Also in this month's update:

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

September 2018

Sun, 02 Sep 2018 23:00:00 GMT

Superannuation Guarantee 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).

The benefit is that employers will be not be liable for the administration component and penalties and be able to claim a tax deduction for the catch-up payments.

Please note that this legislation, whilst being actively promoted by the ATO, is not guaranteed until the relevant legislation becomes law. Watch this space for updates for when it is passed into law.

Also in this month's update:

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

August 2018

Sat, 04 Aug 2018 23:00:00 GMT

FURTHER COMPANY TAX CUTS DEFERRED

The Government has decided not to put the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 to a vote in the Senate (it had already passed the House of Representatives without amendment).

The Bill aims to progressively extend the lower 27.5% corporate tax rate to all corporate tax entities by the 2023/24 financial year, and further reduce the corporate tax rate in stages so that, by the 2026/27 financial year, the corporate tax rate for all entities would be 25% .

Other updates this month:

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

July 2018

Wed, 04 Jul 2018 23:00:00 GMT

Personal Income Tax Cuts passed!

New income tax rates have been passed commencing 1 July 2018!

Also:

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

2017/18 Tax Saving Strategies

Sun, 10 Jun 2018 23:00:00 GMT

A must read for Individuals and Businesses with our annual end of financial year checklist for tax minimisation.

Key notes for Individuals :

Key notes for Businesses :

June 2018

Sun, 03 Jun 2018 23:00:00 GMT

2018 Budget Update:

We have highlighted some of the important proposals from the 2018/19 Federal Budget including:

Superannuation guarantee amnesty

The Government has introduced legislation to complement the superannuation guarantee ('SG') integrity package already before Parliament by introducing a one-off, twelve month amnesty for historical underpayment of SG.

The Bill incentivises employers to come forward and "do the right thing by their employees" by paying any unpaid superannuation in full, as well as the high rate of nominal interest (but without the penalties for late payment that are normally paid to the Government by such employers).

Employers that do not take advantage of the amnesty will face higher penalties when they are subsequently caught – in general, a minimum 50% on top of the SG Charge they owe.

In addition, throughout the amnesty period the ATO will still continue its usual enforcement activity against employers for those historical obligations they don't own up to voluntarily. The amnesty will run for twelve months from 24 May 2018.

Other updates this month include :

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

May 2018

Wed, 02 May 2018 23:00:00 GMT

New 2018/19 FBT Rates:

The ATO has released Taxation Determinations setting out the following rates for the FBT year commencing on 1 April 2018:

FBT Benchmark Interest Rate: 5.20% p.a.

FBT Cents per Kilometre Basis:

FBT Record Keeping Exemption Threshold: $8,552.

Other updates this month include :

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

April 2018

Thu, 19 Apr 2018 23:00:00 GMT

New Superannuation Rates and Thresholds

In this month's update, we highlight important rates and thresholds to take note for 2018/19 superannuation planning including:

For more information about these key superannuation rates and thresholds click here .

In addition:

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

March 2018

Sun, 04 Mar 2018 22:00:00 GMT

ATTENTION SMALL BUSINESS OWNERS

The government has recently blindsided small business owners with draft legislation being released containing new "integrity improvements" to the CGT small business concessions (SBCs) . These changes include additional basic conditions that must be satisfied for a taxpayer to apply the CGT SBCs to a capital gain arising in relation to a share in a company or an interest in a trust.

Also, the ATO has added the Small Business Superannuation Clearing House to their online services from 26 February 2018.

Other updates this month include:

December, January & February 2018

Sun, 04 Feb 2018 22:00:00 GMT

An absolutely MASSIVE update to keep you informed about changes to tax, small-business and SMSF including:

1. Parliament has passed legislation in relation to their 'affordable housing' measures:

2. NSW Small Business insurance duty exemption commencing 1 January 2018.

3. Draft legislation to " protect workers' superannuation entitlements and modernise the enforcement of the superannuation guarantee".

4. ATO crackdown on small business business record-keeping , in particular, the cash economy

5. Work related vehicles fringe benefits tax

If you would like to discuss any of the above, or any other matter, please do not hesitate to contact us .

November 2017

Sun, 05 Nov 2017 22:00:00 GMT

Superannuation Transfer Balance Account Report

The ATO has recently released the new Transfer Balance Account Report (TBAR) which is used to record the value of member balances moving into or out of 'retirement phase' ie commencing or commuting pensions. It is important to note that SMSFs are not required to report anything until 1 July 2018 but they can start to report TBAR events from 1 October 2017.

The ATO has also developed occupation-specific guides to help taxpayers in specific industries and occupations understand what they can and cannot claim as work related expenses including:

In addition:

Tax Deductions You May Be Able To Claim

Wed, 11 Oct 2017 22:00:00 GMT

With the 31 October 2017 lodgement date deadline for 2017 individual tax returns approaching for those who do not lodge with a registered tax agent, it's worth taking the time to review any of your expenses during the financial year, incurred as part of your work or business, as you may be able to claim a deduction to reduce your tax bill.

In general, expenses are claimable when:

The Australian Taxation Office (ATO) provides detailed categories of expenses you can claim on its website, which you can refer to for details on what you can claim. Some of them are outlined below.

1. Vehicle and travel expenses

The ATO has very specific conditions around what you can and can't claim for trips between home and work and between workplaces. These conditions may not be as straightforward as you expect, so it's important to read the relevant section on the ATO website . If you're using your own car, a car you lease or someone else's car for work purposes, you should be aware of the changes to calculation of car expenses deductions effective this financial year.

2. Clothing, laundry and dry-cleaning

If you purchased occupation-specific clothing, protective clothing or work uniforms , you can claim for the money spent, as well as the costs of cleaning those clothes. But if your employer gives you an allowance for clothing and cleaning, you must show the amount of allowance as part of your income on your tax return.

3. Gifts and donations

Check if any organisations you donate to, for example your favourite charity, have the ATO's 'deductible gift recipient ' status so you can claim for the gifts donated. A gift can be money or other financial assets, such as property and shares. Any amount you donate above $2 can be claimed back. For other assets, different rules apply depending on their type and value. As the name implies, you must have given the gifts voluntarily without receiving material benefit or advantage . This means you can't claim items such as raffle tickets or fundraising dinners.

4. Home office expenses

Tools and equipment such as computers, furniture and phones used for work purposes are claimable, either immediately or over a period of time (via depreciation of the asset). You can also claim for costs incurred from running your home office , including heating, lighting, repairs and cleaning if some of your work is from home. But make sure you're only claiming the work-related portion and not the portion for private use. If in doubt, speak to a trusted tax adviser.

5. Investment income deductions

You may have received interest payments on your savings, dividends from your investments in shares, rental payments from an investment property, or some other type of investment income. If so, you may be able to claim for costs related to producing these incomes , such as account-keeping fees and interest charged on money borrowed to buy stocks or rental properties. Money paid to seek advice on changing the mix of your investment can also be claimable.

6. Educating yourself

If you enrol in eligible education courses and your study is work-related, you may be able to claim a deduction. Take note of the conditions you must meet and the types of expenses you can claim for this.

7. Tools, equipment and other equipment

If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost.

Some tools, equipment or assets you may have bought without considering a tax deduction may include:

You can also claim the cost of repairing and insuring your tools and equipment and any interest on money you borrowed to purchase these items.

8. Other deductions

There are a few other things you may be able to claim back on as well that are also considered deductible expenses .

9. Industry specific related deductions

Some occupations may have more specific circumstances than others when it comes to claiming expense deductions. The ATO has a list of occupations that you should check against to see what particular spending related to your job is deductible.

Finally, keep all your records from when you lodge your tax return. The ATO may ask you to provide evidence to support your claims.

If you have any queries as to what you can and cannot claim as a deduction please do not hesitate to contact us .

October 2017

Mon, 02 Oct 2017 22:00:00 GMT

ATO Clamping Down on the Cash Economy

New data matching programs help the ATO identify people and businesses that may not be correctly meeting their obligations.

In addition:

If you would like to discuss any of the above, or any other matter, please do not hesitate to contact us .

September 2017

Tue, 12 Sep 2017 23:00:00 GMT

Important announcements:

If you believe this information will impact your circumstances, please do not hesitate to contact us .

August 2017

Mon, 31 Jul 2017 23:00:00 GMT

ATO Crackdown on Work Related Expenses

The Australian Taxation Office is increasing attention, scrutiny and education on work-related expenses (WREs) .

In addition:

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

July 2017 ATO Tax Debt

Mon, 24 Jul 2017 23:00:00 GMT

Outstanding tax debts may be reported to credit agencies

The Federal Government has announced that from 1 July 2017 the Australian Taxation Office (ATO) will be given the power to disclose to a credit reporting bureau (CRB) the tax debt information of businesses where those debts have been outstanding for more than 90 days and where the taxpayer has not effectively engaged with the ATO in managing their debts.

If you have any outstanding debts with the ATO and wish to discuss this further, please do not hesitate to contact us now.

July 2017

Fri, 30 Jun 2017 23:00:00 GMT

Important updates in relation to the 2017/18 budget measures including:

Click here to read more.

2016/17 Tax Saving Strategies

Tue, 06 Jun 2017 23:00:00 GMT

A must read for Individuals and Businesses with our yearly checklist for tax saving strategies for 2016/17 ;

Key notes for Individuals :

Key notes for Businesses :

Click here to read more to minimise your 2017 tax.

If you have any queries, or would like to discuss tax saving strategies further, please do not hesitate to contact us .

June 2017

Wed, 31 May 2017 23:00:00 GMT

Stay up to date with the latest on the 2017/18 budget including:

Click here to read more.

May 2017

Sun, 30 Apr 2017 23:00:00 GMT

Big news coming into the May 2017 Budget including Company tax cuts, costs of travelling for the preparation of tax returns, new FBT benchmark interest rate for 2017/18 and more.

Click here to continue reading!

April 2017

Fri, 31 Mar 2017 22:00:00 GMT

This month includes news from the ATO in relation to reduction in FBT rates from 1 April 2017, planned changes to GST on low value imported goods, and changes to Superannuation that may require action by 30 June 2017.

Click here to read more.

March 2017

Tue, 28 Feb 2017 22:00:00 GMT

Updates in relation to Superannuation Guarantee (SGC) non-compliance, Federal Court case in favour of the ATO agreeing that 'ride-sourcing' (Uber) is 'taxi travel', Diverting personal services income to Self-Managed Superannuation Funds (SMSFs) and overtime meal deductions.

Click here to read more

January & February 2017

Tue, 31 Jan 2017 22:00:00 GMT

Updates for changes for GST reporting for new small businesses, changes to the 'backpacker tax' and new ATO data matching programs for ride sourcing (uber) and online selling sites.

Click here to read more.

December 2016 Practice Update

Wed, 30 Nov 2016 22:00:00 GMT

December 2016 Practice Update

November 2016 Practice Update

Mon, 31 Oct 2016 22:00:00 GMT

November 2016 Practice Update

October 2016 Practice Update

Fri, 30 Sep 2016 23:00:00 GMT

October 2016 Practice Update

September 2016 Practice Update

Wed, 31 Aug 2016 23:00:00 GMT

September 2016 Practice Update

August 2016 Practice Update

Sun, 31 Jul 2016 23:00:00 GMT

August 2016 Practice Update

July 2016 Practice Update

Thu, 30 Jun 2016 23:00:00 GMT

July 2016 Practice Update

Tax Return Checklist FY2016

Wed, 15 Jun 2016 23:00:00 GMT

Tax Return Checklists: Individual & Business

June 2016 Practice Update

Tue, 31 May 2016 23:00:00 GMT

June 2016 Practice Update

May 2016 Budget Update

Mon, 02 May 2016 23:00:00 GMT

May 2016 Budget Update

May 2016 Practice Update

Sat, 30 Apr 2016 23:00:00 GMT

May 2016 Practice Update

April 2016 Practice Update

Thu, 31 Mar 2016 22:00:00 GMT

April 2016 Practice Update

March 2016 Practice Update

Mon, 29 Feb 2016 22:00:00 GMT

March 2016 Practice Update

January & February 2016 Practice Update

Sun, 31 Jan 2016 22:00:00 GMT

January & February 2016 Practice Update

Accounting, Business, Martin Lord & Co., Hornsby, Australia

July 2024

ATO's 'main residence exemption tips'

June 2024

ATO's three focus areas this tax time

Work related expenses:

Rental properties:

Failing to include all income in tax return:

May 2024

Government warns of 'malicious' myGov scammers

April 2024

How to claim working from home expenses

March 2024

Super contribution caps to rise

January & February 2024

Government announces changes to proposed 'Stage 3' tax cuts

December 2023

ATO warning regarding prohibited SMSF loans

November 2023

Does your SMSF invest in Crypto?

October 2023

September 2023

August 2023

July 2023

June 2023

2023-24 Australian Federal Budget

1. Personal income tax measures:

2. Small business measures:

3. Superannuation measures:

4. Tax integrity measures:

5. Other budget measures:

May 2023

April 2023

March 2023

Revised 67c fixed-rate method

Eligibility

Record Keeping

Further discussed in this month's edition:

January & February 2023

Also discussed in this month's update includes:

December 2022

Other important updates discussed in this month's update include:

November 2022

Other important topics address in this month's update:

October 2022

Other important news in this month's edition:

September 2022

Further discussed in this month's update:

August 2022

Also in this month's edition:

July 2022

Also in this month's update:

2022 End of Year Checklists

Tax saving strategies prior to 1 July 2022:

Common claims made by Individuals:

Maximising deductions for Businesses:

June 2022

ATO priorities this tax time

ATO priorities this tax time

Other topics covered in our practice update:

May 2022

No reduction in the Private Health Insurance rebate as of 1 April 2022

Also discussed in this month's edition:

April 2022

2022-2023 Budget Measures that are now law

Low and Middle Income Tax Offset

Reduction in Fuel Excise

Tax deductions for work-related COVID-19 tests

Other headlines from this month's update include:

March 2022

Tax deductibility of COVID-19 test expenses

Also discussed in this month's edition:

January & February 2022

Service NSW 2022 Small Business Support Program

Additional matters included in this month's update:

December 2021

Preparing for the new Director ID regime

Other matters covered in this month's edition include:

October 2021

Further in this month's update: