Guidance on applying SG rate rise when pay period crosses June-July
The rate of 10% will need to be applied for all salary and wages that are paid on and after 1 July 2021, even if some or all of the pay period it relates to is before 1 July 2021.
Ruling finally issued on FBT treatment of car parking
The long awaited final fringe benefits tax (FBT) ruling on car parking benefits has seen light. Taxation Ruling TR 2021/2 provides clarification on when a car park is a “commercial car parking facility”, including the objective characteristics that should be taken into account, complete with examples. Although the ruling does not take into account the decision in Virgin Airlines decision (that is, the meaning of “primary place of employment”), further amendments are expected to address this issue. Note that in the meantime the ATO has published a “compendium” of the feedback it has received and its responses.
Custom duty free period extended for medical/hygiene COVID-19 products
The “free” rate of customs duty for COVID-19 related medical or hygiene products that was put in place late last year is to be extended via legislation introduced into Parliament. The Customs Tariff Amendment (Incorporation of Proposals) Bill 2021 amendment makes the duty “free” by simply not applying the tariff, and covers face masks, gloves, clothes or gowns, goggles, glasses, eye visors, face shields, soaps, COVID-19 test kits and reagents, viral transport media and disinfectant preparations.
ASIC market integrity rules set out in instrument
This instrument sets out capital requirements in market integrity rules that apply to participants in the licensed markets operated by the ASX, Chi-X Australia, National Stock Exchange of Australia, Sydney Stock Exchange, Australian Securities Exchange, and FEX Global. It acts to move futures market participants from the existing net tangible asset regime to a risk-based regime, subject to a minimum core capital requirement of $1 million; increase the minimum core capital requirement for securities market participants to $500,000; include a requirement to calculate an underwriting and sub-underwriting risk amount; and simplify the capital requirements by removing redundant rules and forms.
ATO reminding businesses of importance of keeping ABN details current
In the lead up to tax time, the ATO reminds business owners that while keeping ABN details up-to-date may not be high on the tax time checklist, it’s an important step to ensure the right people have the right permissions to act on behalf of their business, that government agencies have current information, and businesses are ready for new government services when they become available. Business owners need to update details within 28 days of becoming aware of changes.
Fuel tax credits from 1 July 2021
The ATO has published the fuel tax credit rates from 1 July 2021 to 1 August 2021. This includes a link to its fuel tax credit tools and calculator to help your clients report amounts on their activity statement. It has also supplied the rates for non-businesses.
UNSW report backs
housing price action
A new report from UNSW urges the establishment of a royal commission and that the Reserve Bank of Australia (RBA) as well should address the effect of soaring house prices on productivity and economic stability. It also finds all levels of government must collaborate to expand housing supply and the infrastructure needed to support it. Housing: Taming the Elephant in the Economy noted that national household debt has more than doubled, from 70% of GDP in 1990 to almost 185% in 2020, exposing a ticking economic time bomb should interest rates rise in future.
Tax time 2021 webcast, today (CPD value)
Join the ATO’s expert panel hosted by Sylvia Gallagher, Assistant Commissioner. The panel will discuss the key changes and considerations for the tax profession this tax time. The panel includes Adam O’Grady, Assistant Commissioner, Risk & Strategy, Individuals, and Tim Loh, Assistant Commissioner, Experience and Government, Individuals and Intermediaries and Tax Time 2021 spokesperson. The webcast runs for one hour, today 2pm AEST.
Guidance on discretion to disregard Div 7A updated
Law Administration Practice Statement PS LA 2011/29 has been updated in regard to the authorisation of certain officers within the ATO’s Small Business line to exercise discretion on certain Div 7A deeming matters. The statement provides relief for taxpayers who trigger a deemed dividend as a result of an honest mistake or inadvertent omission. In section 109RB, the Commissioner has the discretion to either disregard a deemed dividend, or allow it to be franked.
Transfer balance cap indexation, new personal caps available soon
From 1 July 2021, the general TBC will be increased in line with indexation from $1.6 million to $1.7 million. However individuals will have their own personal TBC, which will be between the above to figures, depending on their own retirement savings circumstances. The ATO has indicated that personal TBCs will be available online from 5 July 2021. It notes however that the released TBC may vary after that date should more information come to hand due to tardy reporting and so on.
SA trainee and apprentice payroll tax exemptions extended
The 12-month payroll tax exemption for apprentices and trainees in South Australia announced last year is to be extended in this year’s SA state budget (to be tabled Tueaday 22 June). SA’s Premier Steven Marshall announced that relevant training contracts entered into from 10 November 2020 to 30 June 2022 will be exempt (the exemption was due to expire 30 June this year).
Legislated allowances for COVID-19 recovery payment and disclosure concessions
A bill has been introduced, the Treasury Laws Amendment (COVID-19 Economic Response) Bill 2021, which amends the income tax law to extend the concessional tax treatment of payments received by eligible businesses under eligible COVID-19 recovery grant programs administered by a state or territory government. It also amends the tax secrecy provisions in the Taxation Administration Act 1953 to allow protected information to be disclosed to Services Australia for the purposes of administering the COVID-19 disaster payment.
Proper funding source for COVID-19 payments legislated
The bill COVID-19 Disaster Payment (Funding Arrangements) Bill 2021 is a necessary administrative step to establish special appropriation to draw funds from consolidated revenue. The COVID-19 disaster payment provides time-limited financial assistance to eligible workers who are unable to earn their usual income as a result of public health restrictions. Due to the urgency of payments needing to be made, unspent prior year annual appropriations to the Department of Home Affairs were used to make initial payments. The availability of these appropriations was fortuitous and may not be repeatable in the 2021-22 financial year. As of 1 July 2021, responsibility for the payment will shift to the National Recovery and Resilience Agency (NRRA).
Ongoing fee arrangement update from ASIC
ASIC has released an information sheet (in the form of Q&As) dealing with ongoing fee arrangements. The aim is to give clarity to financial advisers and advice licensees on the obligations expected when providing advice to retail clients. In light of the updated guidance, amendments have also been made to the conduct and disclosure regulations.
Year end tax planning
The tax year-end is an important time to ensure your client’s business and personal tax affairs are in order. Here are some key things to remember.
Research and Development incentive draft guidance on eligible software
AusIndustry has issued draft guidance on what constitutes eligible software development activities to meet the requirements for core or supporting R&D activities as defined in the legislation. It has examples to help your client self-assess their software development activities. Submissions and comments are due this Friday, 18 June.
NSW property tax reform consultation continues
A “progress paper” has been released by NSW Treasury on the NSW property tax reform consultation that was initiated late last year. While the initial consultation period closed in March, comments may be submitted on the progress paper until 30 July 2021. The initiative has its own section on the NSW Government website, which has already submitted submissions and more information, with further updates included in a Treasury media release.
eSAT retirement delayed to allow improvements after auditor feedback
SMSF trustees should note that an earlier announcement of the shelving of the electronic superannuation audit tool (eSAT) has now been put on hold and eSAT will not be retired at the same time as the Business Portal. While the ATO consults with auditors on necessary improvements, eSAT will continue to be available, with the ATO’s Online services for business being available as its recommended option for auditors to lodge audit complete advices ACAs and auditor contravention reports (ACRs).
Draft determination on aggregated turnover and aligning income
A draft determination TD 2021/D1 has been issued, which affirms that when working out an aggregated turnover under section 328-115 of ITAA97 a taxpayer should calculate the annual turnovers of entities connected with the taxpayer and entities that are affiliates for the relevant period that aligns with the taxpayer’s income year, even if those entities have a different accounting period.
Super processing schedule June July
The ATO has published its superannuation remittance and recovery processing schedule for SuperStream for the months of June and July.
Is your business ready for the super guarantee rate rise?
On 1 July 2021, the super guarantee rate will rise from 9.5% to 10%. If your client has employees, they will need to ensure their payroll and accounting systems are updated to incorporate the increase to the super rate.
Whacky Tax Fact
The UK’s value added tax (VAT) pre-dates the introduction of the iconic Australian biscuits Tim Tams into Britain, which some blame/praise Boris Johnson for bringing into the country. But until this development, visiting Australians have long wondered why their favourite indulgence had to be packed with other “personal effects”. The answer is most likely due to a quirk in the UK’s tax laws. Targeting of the UK consumption tax at these snacks in general has always taken an exception the coatings applied to one’s morning cuppa accompaniment. No duty is payable on plain biscuits (zero rated), but cover it in chocolate and an extra percentage is piled on (standard rated). See this UK Government VAT guide, para 3.4.2. Note that VAT rates have been discounted temporarily due to COVID-19.
Priority processing of your clients’ returns
If your client believes or reports to you that they are experiencing financial difficulties or serious hardship, they may be eligible for priority processing, after the relevant tax return or form has been lodged. The ATO has set out the steps required to request priority processing, including the evidence that may be necessary.
Proposed widening of STP exemption
The draft instrument Taxation Administration – Single Touch Payroll – 2021-22 year Withholding Payer Number Exemption 2021 (STP 2021/D1) proposes to extend an exemption to reporting under single touch payroll for the 2021-22 income year to entities who do not hold an ABN but instead have a “withholding payer number”. It is proposed to apply from 1 July 2021, and retrospectively cover 2018-19 to 2020-21 as well. Comments close 8 July.
Self-managed super funds and PAYG withholding obligations
Trustees of SMSFs have pay as you go (PAYG) obligations to withhold tax for superannuation benefit payments paid to members who are; under 60 years old and the benefit is an income stream (pension) or a lump sum, under 60 years old and the death benefit is a pension which is a capped defined benefit income stream where the deceased was 60 years old or over when they died, or 60 years old or over and the benefit is a pension which is a capped defined benefit income stream. The ATO has provided guidance on these obligations.
GST and excise concessions
If you have clients who may have tax affairs that could benefit from one or more of the range of GST and excise concessions available to small businesses, the ATO has summarised what is available here. The guidance looks at accounting for GST on a cash basis, at paying GST by instalments, annual apportionment of GST input tax credits as well as excise concessions.
Video explainer for common tasks in Online services for agents
A new educational video series has been developed to help both tax and BAS agents use functionality in Online services for agents. The Tax professionals digital education series is a suite of instructional videos that demonstrate how to perform some common tasks. The ATO says more videos will be added in coming months.
Amending SA land tax bill for discretionary trust distributions has extension shaved
The South Australian legislation Land Tax (Discretionary Trusts) Amendment Bill 2021 has been passed, but has had an initial extension (out from 30 June 2021) for nominating a designated beneficiary for pre-existing trust land brought back from an earlier floated deadline of 30 June 2022 to 31 December 2021. The amended legislation also extends the time in which an objection to a 2020-21 land site valuation can occur.
Tax Wrap podcast Episode 240
Claiming self-education expenses. Tax Wrap speaks with Tax & Super Australia’s tax technical expert Nicole Wilson-Rogers about the tips and traps for taxpayers while navigating claims for the deduction of self-education expenses.