ATO encouraging SMSF trustees to include ABN in annual return
When lodging the SMSF annual return (SAR), the ATO encourages trustees to report the ABN of the fund as this then allows the ATO’s systems to match the correct members of that fund. It says this can be important should the member subsequently want to access compassionate release of super, early release of super, excess concessional contribution election, excess non-concessional contribution election, or Division 293 election.
Tax professional webcasts start up again for 2021
The ATO is re-launching its series of free, one-hour webcasts (livestreams) for the tax profession, called Tax Professionals Conversations. Covering key topics relevant to you, your practice and your clients, 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. They also feature a live chat facility. The next webcast is 4 March (CPD value).
Virtual AGM protocols extended to September
The Federal Government this week introduced the Treasury Laws Amendment (2021 Measures No 1) Bill. The EM explains that the bill extends the temporary COVID-19 relief measures relating to virtual AGMs and dealing with electronic documents from 21 March 2021 to 16 September 2021. Without this relief measure, member meetings require an in-person meeting to be held. The legislation also spells out certain protocols for virtual meetings, such as notice and timing, participant conduct and communication of documents related to the meeting. The bill also provides that all civil penalty proceedings commenced under the continuous disclosure and misleading and deceptive conduct provisions must prove that an entity or officer acted with ‘knowledge, recklessness or negligence’ in respect of an alleged contravention.
Tax treatments for state and territory COVID-19 vouchers and subsidies
The ATO has published guidance on how government-issued stimulus vouchers need to be treated for GST and income tax purposes, and for business clients who accept these vouchers from customers.
SuperMatch annual statement of compliance due in one week
The SuperMatch service gives superannuation fund trustees access to details of active super fund accounts, including lost or ATO-held accounts. This helps super fund trustees with the consolidation of super accounts for their members. The new terms and conditions of use for SuperMatch introduced in June 2020 require trustees of funds connected to the service to provide an annual statement of compliance. The statement of compliance is due by “28 February” (a Sunday, therefore due 1 March) and must be emailed to SPREnablingServices@ato.gov.au.
Older clients keen to access a Federal Budget super measure need to be patient
A 2019-20 Federal Budget measure “Superannuation – improving flexibility for older Australians” aimed to make the super system more flexible for those aged 65 and older from 1 July 2020. It increased the age at which the work test starts to apply for voluntary contributions (both concessional and non-concessional) from 65 to 67; increased the cut-off age for spouse contributions from 70 to 74; and was to enable individuals aged 65 and 66 to make up to three years of non-concessional contributions under the bring forward rule. The first two changes were introduced by simply amending regulations, but the change to the bring forward rule can only be amended by an act of parliament, which the ATO advises has not happened yet. Should you have clients interested in accessing this measure, they need to understand that it is not yet available.
Statutory demand threshold permanent increase consultation opens
The level of debt owed to a corporation that triggers statutory demands (and can trigger entering insolvency) used to be $2,000, but was increased to $20,000 temporarily so that COVID-19 conditions were taken into account. The period where no response triggered a presumption of insolvency was also increased from 21 days to six months. These temporary measures have expired, and Treasury has now issued a consultation paper to examine the state and relevance of statutory demand metrics going forward. Submissions are due 5 March.
More mental health support for COVID-crunched Victorian businesses
The Victorian Government has announced an opening up of a third phase of its previously established mental health initiative. Business Victoria says support is to be directed at certain industries in particular, including hair and beauty and the hotel and retail industries. There is also a helpline (1300 375 330) which provides free, confidential, professional advice and support to all Victorian small business owners seven days a week.
Inquiry launched on financial services impact on Australia’s export future
The Joint Standing Committee on Trade and Investment Growth has commenced an inquiry into the prudential regulation of investment in Australia’s export industries. The inquiry will investigate the potential impact on investment opportunities for Australian exporters of changes in practices by banks, insurers and superannuation funds (such as the ongoing investment transition away from fossil fuels), as well as the advice and guidance provided by financial regulators that affects exporters.
Ruling issued on when deductions are allowed for employee travel expenses
TR 2021/1 covers income tax deductions for travel expenses and sets out when an employee can deduct transport expenses under section 8-1 of the Income Tax Assessment Act 1997. This includes the cost of travel by airline, train, taxi, car, bus, boat, or other vehicle, although the incumbent rule that ordinary travel between home and a regular place of work is not deductible still applies. TR 2021/1 includes a dozen examples when deductibility applies or does not, such as travel between home and an alternative work location, travel between home and work location is part of employment duties, travel between home and a regular work location when on “standby” and more.
Draft FBT ruling issued on accommodation, travel and LAFH allowances
Also rich with examples to explain the application of the rules, TR 2021/D1 covers income tax and FBT regarding employees and accommodation, food and drink expenses, travel and LAFH allowances. The draft ruling comes with many worked examples that work through possible scenarios that include relocation, time away, personal circumstances and general principles that may apply. It replaces a previous ruling, and as it is in draft form at present, comments are invited by 19 March.
Compliance approach by ATO on travel claims aired with draft PCG In relation to the above, the ATO has issued PCG 2021/D1, which aid the determination of whether allowances or benefits provided to an employee relate to travelling on work or living at a location. The PCG sets out the practical administration approach to assist taxpayers in complying with relevant tax laws.
SMSFs must appoint an auditor within timeframes
The ATO is reminding SMSF trustees that they must appoint an approved auditor at least 45 days before the fund’s annual return is due. An audit is required even if no contributions or payments are made in the financial year. It is also keen to point out, on the back of auditor number misuse uncovered by an ATO mass mailout last year, that correct details about the auditor, such as the auditor number identifiers, are required to complete the return.
Superannuation bill introduced with aim to tighten controls
Yesterday the Treasurer, Josh Frydenberg, introduced the legislation Treasury Laws Amendment (Your Future, Your Super) Bill 2021. The aims of the bill, as stated in the EM, include limiting the creation of multiple superannuation accounts for employees who do not choose a superannuation fund when they start a new job, requiring APRA to conduct an annual performance test for MySuper products, and boost the rules around a trustee’s “best financial interests” duty.
Tax Wrap 233: The consequences of employers not paying SG
In this podcast, Tax & Super Australia’s Tax Counsel John Jeffreys is once again a guest on ABC Radio Adelaide. He addresses the consequences of the non-payment of the superannuation guarantee by employers, and the options open to taxpayers once these non-payments are discovered.
Further Hayne Royal Commission recommendations pass lower house
The legislation implementing a further four recommendations of the Financial Services Royal Commission to improve consumer protections was introduced into the House of Representatives late last year, has just passed through the lower house yesterday, and is now headed to the Senate.
Tax and SMSF audits on ATO radar, but leniency given
ATO time and efforts have been diverted to the rollout of the JobKeeper and JobMaker schemes and other stimulus measures, with the ATO sourcing staff for this work by redeploying people from initiating audits, saying it had been a “conscious choice” not to initiate new audits during the peak of the pandemic. But that, as they say in the classics, was then — and this is now.
Data collected via STP instrument registered
Earlier this month it was reported in Daily Update that STP phase 2 is to be delayed, from 1 July 2021 to 1 January 2022. The legislative instrument mentioned has now been registered, and its explanatory statement outlines that the instrument does not alter the approved form for reporting through STP, but instead determines amounts which the Commissioner may choose to include as required amounts to be reported when future changes are made.
ATO’s flexibility on “digital only” looks to be a once-off
On the back of this week’s interim ATO flexibility on paper statements and notices, it has re-emphasised its intention to work towards a digitally focused future by re-publishing its guidance on managing electronic activity statements and instalment notices. It points out that there are several options for electronic lodgment: Online services for agents (OSfA), practitioner lodgment service (PLS), Standard Business Reporting (SBR) enabled software, the business portal, and myGov (when a client links their account to the ATO).
SMSFs to join the SuperStream Rollover crowd
From 31 March 2021, the SuperStream Rollover message will be extended to include self-managed superannuation funds (SMSFs) and digital release authorities. The transition period for implementation and onboarding to SuperStream Rollover v3 is from then to 30 September 2021. The ATO has provided several onboarding resources as well as weekly update PDF reports.
Legislative instrument registered for ASIC cost recovery
The instrument ASIC Supervisory Cost Recovery Levy Amendment (Corporate Insolvency Reforms) Regulations 2021 has been registered by the Assistant Treasurer. It is intended to allow ASIC to recover costs from its regulation of activities undertaken by a small business restructuring practitioner in the new formal debt restructuring process. Regulated businesses will be required to pay a levy (the “cost recovery levy”) to enable ASIC to recover its regulatory costs. This is payable once ASIC issues the leviable entity with a notice setting out its liability.
Wacky Tax Fact
A controversial tax proposed in New Zealand in 2003, officially dubbed “agricultural emissions research levy”, came to be known as the fart tax by the farmers who would have borne the tax (being levied on livestock holdings to counter the cost of greenhouse gas emissions from their animals). Note however that reports have deemed the tax’s nickname a tad misleading, as most methane production is from the first stomach of bovine livestock, and therefore a byproduct of burping rather than from the other end. In 2004, a consortium from NZ’s livestock industry agreed to pay for a portion of this research (just not via taxation), although the government reserved the right to reconsider the tax if the industry withdrew from the agreement.
ATO provides confirmation in writing about reinstating paper statements and notices
Further to the item in yesterday morning’s Daily Update, the ATO published late that afternoon its own update on the issuance of paper PAYG and GST quarterly instalment notices, starting with the June 2021 quarterly notices. But the approach is interim, with the ATO committed to a digital future. “We will continue to work with the profession to develop a digital solution for the PAYG and GST instalment notices that is workable for you and your clients,” it says.
While JobKeeper still open, says ATO, it would prefer you call first
In an update that reminds taxpayers that JobKeeper remains open for new applicants until the scheme winds up in March, the ATO advises that employers looking to enrol in JobKeeper at this stage should phone it first on 13 28 56 so its staff can provide tailored advice based on applicants’ individual circumstances and to help streamline their application.
TPB concessions for approved courses extended to 31 June
The Tax Practitioners Board offered concessions for board approved courses that practitioners undertake during calendar 2020 due to COVID-19. It has now announced that these concessions will be extended to the end of June 2021. The concession centres on the TPB requirement for supervised assessments, and the fact that COVID-19 restrictions can render these impossible. The TPB’s guidance to access the concessions is divided into three options: Remote or online invigilation, software driven invigilation, and alternative arrangements.
ATO to host webinar on TBC indexation
SMSF professionals can book here for an ATO webinar to be held 2 March at 2pm AEDT on the indexation of the transfer balance cap. The webinar is one hour in duration and is free (CPD value) but registration is required. Practitioners should also note that past webinars on the TBC are recorded and can be accessed here.
Biggest promotor penalty in history of R&D tax incentive scheme
Penalties in the order of $22.68 million have been ordered in a Federal Court judgment against an adviser for a range of businesses in his capacity as a registered tax agent and chartered accountant giving advice on the R&D tax incentive scheme.
TPB provides the more common Q&As on cloud computing
The Tax Practitioners Board says it receives lots of questions from tax practitioners about using cloud technology services in a way that’s secure and practical, and that meets practitioners’ obligations under the TPB’s code of professional conduct. Areas discussed include functionality, security, providers, confidentiality of client information, and compliance.
Paper activity statements, instalment notices, to return (partially, temporarily)
The recent decision of the ATO to change paper-based activity statements to digital delivery from the month of November 2020 has been causing problems for agents and their clients. The ATO has now acknowledged that issues have arisen as a result of the change. The ATO states: “In acknowledging these concerns, as an interim approach, we will issue paper PAYG and GST quarterly instalment notices starting with the June 2021 quarterly notices.”
Changes afoot for CPD/CPE requirements from TPB
The Tax Practitioners Board has issued two exposure drafts for consultation on its CPD/CPE policy requirements to maintain registration. Some of the key changes from the current policy include increasing the minimum number of CPE hours to 120 hours over three years for all tax practitioners, allowing some educative health and wellbeing activities to count, and increasing the minimum CPE hours requirement per year to 20 hours for all tax practitioners. Have your say by 11 March 2021 by emailing email@example.com
Law changes to the Tax Agent Services Act
The TPB has advised that a number of changes to the act have taken affect from 1 January 2021. It says these changes are part of Treasury’s regular amendments process to ensure the law operates as intended — the changes affect professional indemnity (PI) insurance, lodgment of registration renewal application, surrender of registration with no formal investigation on foot, service of notices, and how documents may be given. An overview of the law changes affecting registered tax practitioners is summarised in a table on this TPB webpage.
Planning and tax reforms for NSW housing, and extension of stamp duty relief
To encourage build-to-rent housing development, the NSW Government will provide a discount equivalent to at least a 50% reduction on land tax, as well as an exemption from foreign investor surcharges for eligible build-to-rent developments until 2040. The measures are effective immediately. It has also announced an extension to relief on stamp duty out to 31 July 2021. Under the temporary changes the cap on the value of new homes at which stamp duty exemptions apply increased from $650,000 to $800,000, with concessional duty applied on higher values before phasing out at $1 million.
Make sure clients update their ABN: It can be vital
Government agencies regularly access data contained in the ABN registration, and where this is not up-to-date the taxpayer may be missing out on stimulus measures, grants, and other government support. This became painfully evident during the 2019-20 bushfires, and is now re-surfacing during COVID-19 when it was found that a concerning amount of ABN data was out-of-date. Read more.