5 minute tax updates: 16-20 March

Option to switch to monthly GST on back of COVID-19
SMSF status to change if overdue return
Deeming rates to be cut from 1 May
ATO has concerns about SMSFs and property development
New cents per kilometre rate for car expense deductions
Appeals and legal wranglings
After SG amnesty, TPB reviewing its “BAS services” instrument
Timing of PAYG instalment variation COVID-19 measure clarified
TPB support for practitioners in time of coronavirus
Scam COVID-19 SMS doing the rounds
Independent review of ATO audit position pilot expanded

Option to switch to monthly GST on back of COVID-19
The ATO says businesses on a quarterly reporting cycle may elect to change their GST reporting and payment to monthly, to get quicker access to GST refunds they are entitled to. You can only change from the start of a quarter, so a change now will take effect from 1 April 2020. More details here (scroll down).

SMSF status to change if overdue return
If an SMSF is more than two weeks overdue on any annual return lodgment due date and the trustee did not request a deferral, the ATO has announced that it will change the status of the SMSF on Super Fund Lookup (SFLU) to “Regulation details removed”. This status will remain until any overdue lodgments have been brought up to date.

Deeming rates to be cut from 1 May
The government has announced that pensioner deeming rates will be cut. The lower deeming rate will be cut from 1% to 0.5% for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples. The upper rate, which only affects about 40% of payment recipients with deemed assets, will decrease from 3% to 2.5%. The government announcement said the extra money will start to be seen from 1 May.

ATO has concerns about SMSFs and property development
Published on 13 March, the ATO’s SMSFRB 2020/1 sets out its concerns about SMSFs entering into certain arrangements, with related or unrelated parties, involving the purchase and development of real property for subse quent disposal or leasing. While not prohibitiing an SMSF investing directly or indirectly in property development, the ATO said it is concerned about any arrangements that are being used to inappropriately divert income into super.

New cents per kilometre rate for car expense deductions
The ATO has issued MVE 2020/D1, an instrument commencing on 1 July 2020, that sets out the new cents per kilometre deduction rate that applies to work-related car expense deductions. The rate will be 72 cents per kilometre (previously 68 c/km) at which those deductions may be calculated.

Appeals and legal wranglings
The Commissioner has appealed the decision of the Federal Court in case where a person who was a dual resident of Australia and Thailand was treated as a resident solely of Thailand. In Pike v FCT {2019] FCA 2185, the taxpayer has also cross-appealed.

In Stallion (NSW) Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCA 1306, the taxpayer tried unsuccessfully to contest a disallowance of input tax credits and LCT decreasing adjustments.

And an appeal has also been made in a case where the Federal Court held that a trust was not entitled to deduct a loss made due to foreign currency loans. Sole Luna as Trustee for the PA Wade No 2 Settlement Trust v FCT [2019] FCA 1195 decision said that the loss was not made in producing assessable income.

A tax agent had their registration cancelled in August 2019 and was banned for three years for breaches of the TPB’s code of professional conduct. The AAT has now reduced that to two years in the case of Ridden and Tax Practitioners Board [2020] AATA 422).

After SG amnesty, TPB reviewing its “BAS services” instrument
The TPB has announced that it is reviewing the Tax Agent Services (Specified BAS Services) Instrument 2016, which declares certain services as BAS services. In particular it will be looking at if the services in the instrument should be expanded to include additional services relating to super guarantee contributions, which may include services relating to assisting clients in preparing and lodging superannuation guarantee statements and making payments under the SG amnesty. 

Timing of PAYG instalment variation COVID-19 measure clarified
The ATO felt it necessary to clarify the timing of varying PAYG instalments (as part of the government’s support for business for the COVID-19 response). Its original announcement of the administrative concessions said businesses would be allowed to vary PAYG instalment amounts to zero for the “April 2020 quarter”. This has been revised in its media release to clarify that it applies from the “March 2020 quarter”. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.

TPB support for practitioners in time of coronavirus
Support for practitioners has been offered by the TPB in the form of an extension of time to meet registration obligations, such as registration renewals or annual declaration forms. The TPB advises practitioners who have been affected to contact TPB to resolve any outstanding matters.

Scam COVID-19 SMS doing the rounds
The ACCC has raised the alarm about a new text scam. Its Scamwatch page is warning Australians not to click on links in suspicious texts that claim to be from the Australian government. It says text messages may try to appear as though they are from the government and say “You’ve received a new message regarding the COVID-19 safetyline symptoms and when to get tested in your geographical area” and is accompanied by a link (don’t click on it). Report any such SMS to the ACCC and Scamwatch here

Independent review of ATO audit position pilot expanded
The ATO has advised that it has extended and expanded its pilot program which offers an independent review service to eligible small businesses disputing income tax related audits. The pilot will continue until 31 December 2020. As originally set up, the pilot was limited to small business disputes involving income tax audits in Victoria and South Australia. It has now been expanded to include eligible small businesses with disputes involving: income tax; GST; excise; luxury car tax; wine equalisation tax; and fuel tax credits.

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