Fuel tax credit recorded webinar
The ATO has a recorded webinar available, dealing with helping your relevant clients get more from fuel tax credits. If you or your clients claim less than $10,000 in fuel tax credits each year, you can use the basic method for heavy vehicles to calculate your claims. (CPD value.)
Hybrid mismatch rules for business revisited
Hybrid mismatch arrangements exploit differences in the tax treatment of an entity or instrument under the laws of two or more tax jurisdictions. These arrangements can end up with multinational companies gaining an unfair competitive advantage by avoiding income tax or obtaining double tax benefits. The hybrid mismatch rules were introduced to prevent this from happening, and were updated and clarified in September 2020.
TPB hosting two free (CPD value) webinars next week
Join us for two free webinars on 20 May. The first session will run from 11:00am – 11:45am (AEST) and will see TPB Board member, Greg Lewis, provide guidance on the appropriate use and disclosure of client TFN information in email communications (register here). Following this session, from 2:00pm – 3:00pm (AEST) Board member, Debra Anderson and Adam O’Grady from the ATO will discuss the different risk areas you need to consider this tax time (register here).
If you’re in Adelaide next week, drop in on the ATO’s super booth
The Conference of Major Superannuation Funds is being held in Adelaide next week. The ATO will have a booth at the conference on Tuesday 18 and Wednesday 19 May 2021 at the Adelaide Convention Centre, and staff will be available for to answer questions or for an informative chat.
Single body reforms take in tax (financial) advisers
In line with recommendations made by the Financial Services Royal Commission, a draft bill has been released for consultation. The draft bill will implement the Federal Government’s response to recommendation 7.1 of the Independent Review of the Tax Practitioners Board by introducing a single registration and disciplinary system for tax (financial) advisers. If you would like to respond to this consultation, you can submit responses to Treasury up until 14 May 2021.
Regarding the second item in the 7 May Daily Update. I was shocked to see this line in your information on working from home. “If you claim occupancy expenses, you may have to pay capital gains tax when you sell your home, even if it is your main residence.” As you would know, if the ATO deems part of your home to have been a place of business, then you will be liable for CGT on that part whether or not you have claimed occupancy expenses. The above line suggests that if you don’t claim them, then you are not liable.
SC, Normanhurst NSW
TSA replies: Please see IT 2673, para 24: Effect of foregoing allowable deductions. “The question has been raised with this office whether, in a situation in which the sole or principal residence exemption would otherwise be denied to a taxpayer because a dwelling is used for the purposes of gaining or producing assessable income, the exempt status of the dwelling would be preserved if the taxpayer made no claims under subsection 51(1) for allowable deductions in relation to the income earning activities. Whether or not deductions are claimed or allowed in relation to the income producing activities does not affect the capital gains tax status of the dwelling. Subsection 160ZZQ(21) applies where a sole or principal residence is used for the purpose of gaining or producing assessable income and does not depend for its operation on whether income tax deductions are claimed or allowed.”
In other news
Tax attitudes have been changed by the pandemic
The Per Capita Tax Survey 2021 provides valuable insights into public sentiment towards the Federal Government’s role in the post-COVID recovery. It finds that some of the shift in public attitudes has, so far, stuck. Appreciation of public services remains higher than it was pre-COVID, as does support for long-term government borrowing to fund investment in the economy. Views about personal tax contributions, on the other hand, are largely reverting to pre-COVID positions, although there is stronger support across all income and age groups for wealthy Australians to pay more tax.
Permanent establishment definition tweaked for a COVID specific
An addendum has been issued on the ruling on permanent establishments that re-defines an example of“a place at or through which [a] person carries on any business”. Applying from 1 March 2020, the COVID-inspired addendum inserts an example of when a period of six months or more might not constitute “temporal permanence”.
Claiming loss carry back before 1 July
The ATO points out eligible corporate entities who have an early balancer substituted accounting period (SAP) or who need to lodge a company tax return for a part year for 2020–21 income year can claim the loss carry back tax offset, but that in addition to lodging the claim form, loss carry back tax offset amounts need to be included in the calculation statement of company tax returns, at the refundable tax offset label (label E).
Statutory right to have the Commission give reasons? Sometimes, says IGTO
The Inspector-General of Taxation and Taxation Ombudsman (IGTO) has published an examination of when and under what circumstances a taxpayer may have a statutory right to receive reasons from the Commissioner. It looks at the options available, despite the limitations on a taxpayer’s legal right to reasons, if a taxpayer is met with a refusal by the Commissioner to provide reasons, or receives insufficient reasons and this impedes their ability to understand a decision or weigh up next steps.
FBT car parking threshold 2021-22
Announced this week is the threshold for car parking fringe benefits for the 2021-22 income year, commencing 1 April 2021. This is $9.25 (up from $9.15 for the previous year). Other FBT rates and thresholds can also be found on this page.
Financial supplement, HELP, TSL and VETSL: Indexation factors 2020-21
Published in the Commonwealth Gazette, the Federal Government has announced the indexation factors that are used to work out accumulated debts under Higher Education Loan Program (HELP), Vocational Education and Training Student Loan (VETSL), Trade Support Loan (TSL) and Financial Supplement for the 2020-21 financial year.
Widely based settlement arrangements
The ATO has provided details of current widely-based settlements that have been endorsed by the widely-based settlement panel for investment schemes and employee benefit arrangements. Investment schemes include joint venture loss arrangement, management investment schemes – purported partnership arrangement, and deduction scheme – refinancing home loans. Employee benefit arrangements include employee entitlement funds and employee savings plans.
E-invoicing and more investment in the digital economy
Following the commitment to make e-invoicing mandatory for Australian Government agencies by July 2022, the government is investing $15.3 million to improve awareness of the value of e-invoicing for business and to increase adoption.
Tax Wrap podcast: The Federal Budget
Tax Wrap gets all the good news, and otherwise, on the 2021-22 Federal Budget from Tax & Super Australia’s tax technical guru Neville Birthisel.
Tax & Super Australia’s commentary on Federal Budget 2021-22
The Government has decided to put its foot on the accelerator with the hope that the growth in the economy over a long period of time will help to pay down the debt that has been central to the Government’s response to COVID-19.
Tax time guidance for recent COVID-19 measures
With tax time fast approaching, the ATO has put in one place all the guidance on the temporary measures that were initiated to help the economy though the pandemic over the 2020-21 income year, in case any of your clients may need a refresher on the tax implications. Most of these measures relate to claiming tax concessions, deductions, and depreciation of assets at tax time, and include loss carry back, temporary full expensing, accelerated depreciation, instant asset write-off, increasing the small business entity turnover threshold, and the JobMaker Hiring Credit.
Practice woes (pandemic, ill-health, staffing) and access to ATO support
The ATO points out to practitioners that you can apply for “supported lodgment program assistance” if your whole practice has been disrupted by a significant event or issue. You can submit a request for supported lodgment program assistance through Online services for agents Practice mail. Use the topic “Debt and Lodgment” and the subject “Supported lodgment program”.
Queensland updates rules on First Home Owner grant
Details on residence requirements and penalty amounts have been updated on the Queensland Treasury’s website regarding the state’s First Home Owner grant scheme. A new public ruling clarifies what evidence the Commissioner will consider when making a decision about the home being a principal place of residence. And another ruling sets out the principles the Commissioner will apply in deciding whether to impose a penalty.
Unclaimed super money best practice
The ATO has re-issued (for information only, not for updates) the protocol for unclaimed and lost member superannuation money. The protocol covers non-member spouses, deceased members, former temporary residents, members aged over 65, lost member accounts, inactive low balance accounts, trustee voluntary payments, trustee voluntary payment of other amounts, eligible rollover funds and more.
Community shed parameters clarified for DGR status
The ATO says that a community shed is not required to have “community” or “shed” in its name to be eligible for DGR endorsement. But one of the characteristics required is for them to have open membership. To clarify, the ATO has updated its community shed webpage to provide more information on open membership, including examples.
Re an item in 11 May’s Daily Update. Could you please send the message back to the powers-that-be and the idiot “meeja” that “wage theft” is a complete lie. Tell these clowns the laws are so complex and ambiguous that no one knows what they are.
Payroll functions are outsourced to relax the stress levels between the employees of an organisation. Further, to do the job properly and to comply with the ever extending reaches of the law, which remove common sense and efficiency, employees have to spend more time on unproductive tasks rather than on productive tasks. This increases their time at work but the employer is unable to recover this time or on-charge this time to the customer. All of this is compounded by high wages, which paying overtime due to long winded legal process causes cost pressure which the customer is unable to bear.
Please send the message through the “meeja”. Perhaps we could start educating the journos, teachers and legals with the first lesson – grow up and stop throwing s*** at people who are trying to improve themselves and everybody else.
— John Stankevicius, Kent Town, SA
Whacky Tax Fact
Primary industry suffered severely in the 1930s due to drought and the Depression, so the government introduced three new taxes to support farmers: the apple and pear tax, the flour tax, and the wool tax — in the 1930s, the Australian wool industry was considered to be going through a crisis.
Pre-budget survey of TSA members
A survey distributed last week to the Tax & Super membership showed that a substantial majority (63%) believe the idea of a standard deduction for individuals is not a great idea. Another unmistakeable opinion (at 82%) was that the refund of franking credits should continue, and that individual tax rates need to be lowered (74%). Another solid result was on the CGT concessions for small business, with 74% of members convinced that the rules in this area of tax need to be simplified. The GST rate is considered to be at the right level by 64% of members, with 55% saying it’s base should not be broadened. Finally. A slight majority of TSA members think it a positive idea to abolish FBT for SMEs, and a slightly smaller cohort believe the LMITO needs to be extended again. Don’t forget TSA’s Federal Budget coverage will be distributed to everyone who signs up here.
Small business handed help over ATO debt recovery action
As part of the 2021-22 Federal Budget, it has been announced that the government will allow small businesses to apply to the AAT to pause or modify ATO debt recovery actions where the debt is being disputed in the AAT. Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, so applying to the AAT instead can save SMEs fees and waiting time for a decision.
First Home Super Saver measures to expand
More details will be revealed with tonight’s Federal Budget, but for now Treasury has announced that the First Home Super Saver scheme will have the amount of voluntary contributions available for release increased from $30,000 to $50,000. It will also introduce a Family Home Guarantee, which aims to help single parents buy their first home with a small 2% deposit.
Treasury lists amendments to several taxation areas, including temporary full expensing
The bill Miscellaneous amendments to Treasury portfolio laws 2021 is open for comments until 25 May. In regard to temporary full expensing, the legislation clarifies that in working out the cost of a depreciating asset that is capital works for the purpose of calculating an entity’s total cost of investment for the 2016-17 to 2018-19 income years, sections 40-45 and 40-215 of the ITAA97 are disregarded. Also, as explained in the EM, it contains several amendments to existing legislation, including loss carry back choice, clarifications on franking account balances, certain consumer protections and civil penalties, recovery of overpayments, New Zealand auditors, and more.
Underpayment of wages: NSW introduces legislation
Legislation titled the Tax Administration Amendment (Combating Wage Theft) Bill 2021, which is aimed at the underpayment of wages by employers, will also strengthen the NSW Chief Commissioner’s powers to recover payroll tax on unpaid wages. Provisions in the bill will apply upon assent.
Bill passed in NT to allow more special
arrangements with Commissioner
The legislation, the Taxation Administration Amendment Bill 2021, will make room for special arrangements to lodge returns and access certain exemptions. The Commissioner of Territory Revenue, once the bill becomes law, will be given expanded powers to grant special arrangements dealing with matters other than tax returns (such as tax exemptions, settling liabilities etc) and in relation to agents or classes of agents. New provisions have also been added to impose penalties for non-compliance with these approved special arrangements.
Super data transformation: More FAQs on phase 1 from APRA
APRA has published additional frequently asked questions for registrable superannuation entity licensees to provide further guidance on meeting the Reporting Standards for Phase 1 of the Superannuation Data Transformation, which is due to commence 30 September 2021.
Super processing schedule updated
The ATO has published the schedules for May and June 2021 for its superannuation remittance and recovery processing schedule for SuperStream. SMSFs must be able to receive employer contributions and the associated data electronically using the SuperStream standard. From 1 October 2021, rollovers into or out of your client’s SMSF can only be performed using SuperStream.
Video games to be part of economic recovery — developers to enjoy a 30% tax offset
Part of the Federal Government’s digital economy push as announced by the Prime Minister (scroll down to “investment incentives”) is a 30% tax offset offered to digital games developers. The PM claims this is to support Australia taking a greater share of the $250 billion global game development market, and signals changes to the way Australian businesses can claim depreciation of intangible assets like intellectual property and in-house software.
Parliamentary Budget Office releases simple guide to understanding the Federal Budget
The PBO’s “Understanding the Budget” paper (download it here) has been issued ahead of the release of the 2021-22 Federal Budget tomorrow evening, and provides a guide to navigating the budget papers for non-technical users. The paper explains the four Budget books (“papers”), the “at a glance” pamphlets and the rest of the Federal Budget components. This guide complements the PBO’s online budget glossary. Tax & Super Australia will be providing comprehensive coverage of the Federal Budget tomorrow evening.
Payroll tax (NSW): Jobs Plus bill introduced
The Payroll Tax Amendment (Jobs Plus) Bill has been introduced into the NSW Parliament, which exempts employers from liability to pay payroll tax on wages that are the subject of Jobs Plus agreements. It also extends an exemption from payroll tax enacted in response to COVID-19. The amendment removes a limitation on the exemption so that wages funded by the Aged Care Workforce Retention Grant Opportunity program of the Federal Government, that are paid or payable on or after 1 January 2021, continue to be exempt from payroll tax.
NSW and Queensland communities affected by March floods
The ATO says the challenging conditions experienced by communities in NSW and south east Queensland in the face of the floods experienced in March will naturally mean that tax affairs are not top of mind. However the ATO is reassuring those communities that support is available.
WA’s bushfires and Cyclone Seroja natural disasters
The ATO is also reaching our to offer help to West Australians affected by the recent calamities of bushfires and Cyclone Seroja, and says there are a range pf practical options available to help. It says if taxpayers are struggling with tax and super obligations as a result of these natural disasters, there is help to be had from the ATO.
Warn your clients about this myGov impersonation email scam
Services Australia and the ATO are warning the community about a new email impersonation scam that is doing the rounds. The fake emails claim to be from “myGov” and include screen shots of the myGovID app. The email asks people to click a link to verify their identity using a ‘secure form’ which takes them to a fake myGov page requesting personal identifying information and banking details.