5 minute tax update: 12-16 October

Data matching and the reporting of asset disposals for CGT
Is ATO being put on a cost-of-operation diet?
FFC hands decision win in Healius appeal to Commissioner
STP reporting: ATO has compiled a troubleshooting page
Withholding schedule update released post budget rates changes
Guideline on SMSF penalty administration
Change made so super providers do not re-use payment reference numbers
SMSF auditors reminded to stay alert to SAN misuse
ATO states its compliance approach to in-house SMSF audits
Digital Business Plan details
Treasury releases JobKeeper data based on postcode
GST and assignment of payment streams addendum released

Data matching and the reporting of asset disposals for CGT
The ATO has reached out to practitioners with the advice that its enhanced data matching capabilities means it is now able to pay much closer attention to capital gains made on shares, property and cryptocurrency. Its advice is to remind clients that they need to inform you of asset disposals, which can include an asset’s sale, loss or destruction. The type of capital gains tax (CGT) event that applies can affect how a capital gain or loss is calculated and when it is included in a net capital gain or loss.

Is ATO being put on a cost-of-operation diet?
Buried in Federal Budget 2020-21 paper number 4, “Agency Resourcing”, is what many would see as a sobering fact. On page 176 the ATO is listed in the table “Departmental Expenses”, which includes wages but excludes net capital investment. The ATO is shown as having operating costs of a little over $4.2 billion for 2020-21, which over the forward estimates out to 2023-24 drops to a tad over $3.2 billion. So a shrinking of the ATO’s pool of operating cost allocation of a cool billion dollars.

FFC hands decision win in Healius appeal to Commissioner
The Full Federal Court handed down its decision in Commissioner of Taxation v Healius Ltd [2020] FCAFC 173. The court found in favour of the Commissioner holding that the lump sum payments made to the medical practitioners by the taxpayer were capital in nature.

STP reporting: ATO has compiled a troubleshooting page
Single touch payroll, like any initiative, has had some teething problems. But now the ATO has enough issues solved to be able to compiler a handy troubleshooting table on STP. Read all the situations, and the answers, here.

Withholding schedule update released post budget rates changes
After the Federal Budget tax rates changes, it became necessary for the ATO to re-work the withholding schedules to be applied for working out amounts to be withheld under the PAYG system. This is now updated, but note that schedules 1-3, 5-9, 11-13 and 15 apply to payments made on or after 13 October 2020.

Guideline on SMSF penalty administration
The practice statement law administration PS LA 2020/3 provides guidelines for ATO staff on the administration of the penalties outlined in subsection 166(1) of the Superannuation Industry (Supervision) Act 1993 for contraventions in relation to self-managed superannuation funds, including:

  • when an entity becomes liable to one or more administrative penalties under the Superannuation Industry (Supervision) Act 1993
  • which entities are liable to pay the administrative penalty, and
  • the Commissioner’s remission considerations.

Change made so super providers do not re-use payment reference numbers
The ATO advises that it has made a change to prevent super providers from re-using payment reference numbers (PRNs) in different unclaimed super money (USM) data messages within a 12-month period. This change has been implemented in accordance with the SuperStream data and payment standards that provide that PRNs cannot be used more than once in a 12-month period.

SMSF auditors reminded to stay alert to SAN misuse
The ATO advises that its SMSF auditor number (SAN) mailout finished last month, but that in the meantime SMSF audit firms should still keep an eye out for SAN misuse. The mailout aimed to identify instances of SMSF auditor details being incorrectly reported on the SMSF annual return (SAR), or where the SAR is being lodged prior to audit completion.

ATO states its compliance approach to in-house SMSF audits
The new Independence Guide (Fifth Edition, May 2020) makes it clear to the ATO that auditing firms will need to overcome several hurdles when performing in-house audits of self-managed super funds (SMSFs), to meet the requirements of the restructured APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

Digital Business Plan details
The Federal Government’s $800 million Digital Business Plan package aims to enable businesses to take advantage of digital technologies. The Government says the COVID-19 pandemic has accelerated the adoption of digital technologies by Australian businesses and consumers, which has enabled many to transform their operations and continue to trade through the crisis. Several initiatives have been sketched out in the announcement.

Treasury releases JobKeeper data based on postcode
Treasury has released JobKeeper postcode data, in the form of a spreadsheet. The information provided is based on the total number of processed applications for organisations for the April fortnights – 30 March 2020 to 26 April 2020, May fortnights – 27 April to 24 May 2020, and June fortnights – 25 May to 21 June (as at midnight 1 September 2020).

GST and assignment of payment streams addendum released
The ATO has released an addendum to the ruling GSTR 2004/4A7 on the assignment of payment streams, including under a typical securitisation arrangement. It provides advice on determining whether a home loan lender is entitled to GST credits for common acquisitions made to arrange home loans when these are securitised as part of a typical securitisation arrangement. It includes examples of common acquisitions under these circumstances.

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