5 minute tax updates: 8-12 June

Expanded instant asset write off extended to 31 December
ATO free webcast coming up
Ineffective deterrent element of shortfall penalty sees AAT vary imposition
Rates for GIC, SIC; July to September
Additional cash flow boost preparation
Individual income tax return manually entered information
No lodgment deferrals for certain clients
Client lodgment support
Draft PCG for GST apportionment for certain financial supplies
Not only but also… (accompanying GSTD to above)

Expanded instant asset write off extended to 31 December
The government has announced that the COVID-19-increased instant asset write off has been pushed out by another six months, to 31 December 2020. It means businesses with a turnover up to an expanded $500 million a year will be allowed to continue writing off newly purchased assets worth up to $150,000. In announcing the extension, Treasury said it would have a clearer idea of the take up of the expanded write off once income tax returns were filed in the near future.

ATO free webcast coming up
Save the date of 18 June for the next ATO Tax professionals conversations, its series of free, one-hour webcasts (livestreams) for the tax profession. The livestreams feature a panel of experts including members of professional associations, registered tax and BAS agents, digital service providers (software developers) and senior ATO staff. You can use the live chat facility to ask the panel of experts questions and interact with other viewers. Details here.

Ineffective deterrent element of shortfall penalty sees AAT vary imposition
In a case before the AAT, MJPV and Commissioner of Taxation (Taxation) [2020], shortfall penalty uplifts (20% on top of the base penalty) generally imposed in such instances were dropped as the Commissioner found that the punitive or deterrent value of the additional impost was in this instance lost — on one level as amended assessments that led to the shortfall were issued on the same day as becoming liable (so with no ability to change behaviour from the taxpayers) and another the fact that a taxpayer had passed away (so a deterrent or punitive value was no use).

Rates for GIC, SIC; July to September
The ATO has published the general interest charge (GIC) rates and shortfall interest charge (SIC) rates for the period 1 July 2020 to 30 September 2020.

Additional cash flow boost preparation
If your client received initial cash flow boosts, if they were eligible, they will automatically receive additional cash flow boosts when you lodge their activity statements for each monthly or quarterly period from June to September 2020. When you lodge your client’s June 2020 activity statement, they may receive the last part of their initial cash flow boost and the first additional boost as a credit.

Individual income tax return manually entered information
The ATO advises that granular data capability has been expanded to include additional schedules for 2019-20 individual tax returns. The amount of information you need to enter manually will depend on your software and access to your client’s pre-fill information. If any of their pre-fill data is not available when you are preparing their return, ask your client to provide relevant information to ensure you have all the details. The ATO has provided a checklist here.

No lodgment deferrals for certain clients
If any of your clients receive Child Care Subsidy and Family Tax Benefit payments from Services Australia, the client and their partners must lodge their 2018-19 tax return by the due date of 30 June 2020, regardless of any deferrals in place. See Services Australia for more information.

Client lodgment support
If you or your clients are unable to meet upcoming lodgment and payment obligations on time, there is now more you can do online to help your clients. These include requesting a remission of general interest charges, applying for payment-only deferrals, and setting up, adjusting or cancelling eligible payment plans. More details here.

Draft PCG for GST apportionment for certain financial supplies
The ATO has issued draft consolidation guideline PCG 2019/8DC1, which deals with the ATO’s compliance approach to the GST apportionment of acquisitions that relate to certain financial supplies. The draft outlines a proposed Schedule 2, dealing with transaction accounts for certain authorised deposit-taking institutions that supply an interest in or under an account covered by table item 1 in subsec 40-5.09(3) of the GST regulations. The draft schedule sets out the ATO’s risk assessment framework with four risk zones, examples of which are provided. When finalised, Schedule 2 will have effect from the start of the first tax period commencing on or after 1 October 2020. Comments on the draft are due by 3 July.

Not only but also… (accompanying GSTD to draft PCG)
Along with the above, the ATO has released draft GST Determination GSTD 2020/D1, advising that the supply of a transaction account is GST-free under table item 3 of subsec 38-190(1) of the GST Act to the extent that the account holder’s effective use or enjoyment of the transaction account takes place outside of Australia.

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