FBT rates and thresholds, 2021-22
From the 2020-21 FBT year onwards, tax determinations will only be published for Motor vehicle (other than a car) – cents per kilometre rate and Reasonable food and drink amounts for employees living away from home. All other rates and thresholds are available on this ATO page.
Webcast recording on practitioners helping small business
The ATO’s Tax Professionals Conversations page has a one-hour webcast recording you can access, titled Recovering from 2020: How tax professionals can support small business clients. The expert panel discussed the tools and resources available for tax professionals and their small business clients to help them recover following a difficult 2020. Panel members are Sylvia Gallagher (Assistant Commissioner, Intermediaries Engagement and Support, Individuals and Intermediaries, ATO), Andrew Watson (Assistant Commissioner, Small business experience, ATO), Michelle Allen (Senior Director, Economic Stimulus, ATO), and Daniel Crick (Executive Director, COVID-19 Response Taskforce, Fair Work Ombudsman). CPD value.
Tasmania increases threshold for stamp duty concessions
The SRO Tasmania has announced duty concessions for first home buyers, and for pensioners downsizing. The dutiable value of a property that may be eligible for the 50% discount on property transfer duty has increased from $400,000 to $500,000. Additionally the Tasmanian Government has announced that it will introduce a suite of measures to land tax in the 2021-22 financial year — the tax-free threshold will be doubled from $25,000 to $50,000; the premium penalty interest rate will be halved from 8% to 4%; land tax bills of more than $500 will be able to be paid in three instalments; and the upper threshold will be increased from $350,000 to $400,000.
NSW payroll tax relevant contracts update
Revenue NSW has issued practice note CPN 016, which sets out the application of the relevant contracts provisions under s32 of NSW payroll legislation to businesses providing financial services under an Australian Financial Services (AFS) Licence, and credit services under an Australian Credit (AC) Licence. See also CPN 007, which outlines the general application of the relevant contracts provisions for independent contractors.
Improved online objection form
Note that the Online Services for Agents objection form now has space to include the grounds for the objection as well as the reasons cited for not lodging the objection on time. The updates to the form mean there is no longer a requirement to upload an attachment to the objection.
Telematics technology provider checklist for fuel tax credits
If you have clients who are telematics technology providers, you can use the ATO’s new checklist when applying for a product or class ruling for fuel tax credit purposes. The technology includes such tools as GPS, engine diagnostics and vehicle sensors.
Activity statements for Q3 available now online
The ATO advises that quarter three activity statements are now available online. When they are due can be ascertained by checking the ATO’s lodgment and payment due dates in Online Services for Agents (or the Practitioner Lodgment Service), or you can run on demand reports.
Latest SMSF stats
There are 593,790 SMSFs, which have a total 1,114,972 members. The estimated total value of assets held by SMSFs are just over $764 billion. The top asset types held by SMSFs (by value) are 1) listed shares (27% of total estimated SMSF assets), and 2) cash and term deposits (20%). Members are 53% male and 47% are female, and 86% of SMSF members are 45 years or older. These and other amazing SMSF facts can be found in the latest statistical report (to December 2020) from the Federal Government’s national data repository data.gov.au.
ATO’s top 10 rental property owner common tax mistakes
The ATO has issued a list of tips that should help rental property owners avoid what it has found are their 10 most common errors. (Bonus: PDF brochure you can give to clients)
Franchising changes on the way
A bill, Franchising Laws Amendment (Fairness in Franchising) Bill, has passed the Senate. It intends to enable the Australian Small Business and Family Enterprise Ombudsman to appoint a mediation and franchising adviser to assist in resolving franchising disputes where mediation has failed, or where both parties agree to arbitration; to give the Ombudsman the power to assist with multi-party mediation and arbitration in franchising disputes where multiple parties have identical issues that require resolution; and to increase the civil penalties provisions for breaching the Franchising Code of Conduct.
The pandemic and the economic crisis: a global agenda for urgent action
The Institute for New Economic Thinking has issued an interim report that focuses on actions that need to be taken immediately to get the pandemic under control and to ensure a prompt and robust recovery. It takes an explicitly global perspective on these issues, with particular attention to what the international community needs to do to help those in the developing world and emerging markets.
What’s new in FBT?
The FBT year is ending in a week and a half (31 March), and the ATO usually publishes at this time of year its FBT return instructions for self-lodgers. However one element of this package of information that practitioners may find helpful is the section “What’s new in FBT?”. This lists proposed and recent law changes, administrative changes, and recent public advice and guidance. Given that the past year has been a singular period of adjustment and change, many may benefit from a quick refresher.
Guide to troubleshooting STP and JobMaker errors
The ATO has produced a list of errors, and the solutions to these errors, that may occur where an employer has incorrectly reported data in Single Touch Payroll (STP) enabled payroll software for the JobMaker Hiring Credit. The troubleshooting list shows a lucky total of 13 so far, but we assume more will be added as they are discovered.
ATO uploads online tool for employees to dob in bosses not paying SG
An online tool has been published on the ATO website to allow employees to inform on employers who are not paying compulsory superannuation contributions. It says it can only investigate an inquiry about unpaid super for a period once the employer’s due date for lodgment has passed, but helpfully includes a table of relevant due dates.
Responsible lending changes pass lower house
The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 has made its way to the Senate without amendment. The bill’s key elements include amending the National Consumer Credit Protection Act to provide that responsible lending obligations apply only to small amount credit contracts, small amount credit contract-equivalent loans provided by authorised deposit-taking institutions, and consumer leases. It also exempts reverse mortgage schemes from the application of the Age Discrimination Act as well as other amendments.
Queensland SRO changes exemption rule on transfer duty for cancelled agreements
The Commissioner of State Revenue in Queensland has amended public ruling DA115.1.3, effective from 11 March 2021, so that the previous exemption to duty on cancelled agreements over dutiable property transfers is limited to “cancellation” and not a result of conditions not being met. The relevant agreement must have been “ended” through cancellation rather than performance (rendered null and void after being voidable), before any of its commercial or practical purposes have been achieved.
Government reviewing Farm Management Deposit Scheme
The existing scheme, where primary producers can better manage cash flow by setting aside pre-tax income from good years to cover inevitable bad years, is being reviewed. The evaluation will assess the operation of the scheme, including if the policy objectives are being met and if the scheme is being administered effectively. The Department of Agriculture has set up a survey for your relevant clients to complete (submissions can also be uploaded from this site), which will be used to inform government decisions on the ongoing implementation of the Farm Management Deposit Scheme. Submissions close on 26 April 2021.
ATO “lifeline” for businesses voluntarily paying back JobKeeper
Tax & Super Australia welcomes the ATO helping to clarify circumstances for when JobKeeper repayments voluntarily made by a company are tax deductible.
When it comes to real estate and CGT, remind your client that timing is important
Although your client reports a capital gain or loss in the tax return for the income year in which the contract is entered into, they are not required to do this until settlement occurs.
Director Identification Number regime adoption begins
The adoption of the new Director Identification Number (DIN) regime, touched on by this newsroom recently, has begun in earnest with Treasury issuing four consultation documents this week. These include: Draft Data Standard, Draft Data Standard Explanatory Statement, Draft Disclosure Framework, and Draft Disclosure Framework Explanatory Statement.
Practitioner lodgment service user guide
The practitioner lodgment service (PLS) is the ATO’s online lodgment channel that enables tax and BAS agents (registered agents) to lodge forms including tax returns, activity statements and schedules, to access services such as client updates and direct debits, and to download reports and lists. The ATO has re-published, in case anyone needs to re-acquaint themselves with the PLS, an updated user guide. The guide supports Standard Business Reporting (SBR) enabled software documentation.
STP expansion: Livestream update for practitioners
The ATO is hosting an online update session on the expansion of STP. The livestream event, to be held Monday 29 March (register here and add to your calendar), will bring together the ATO, representatives from Services Australia and industry professionals who will discuss what is involved with STP Phase 2, what the changes will mean for you, and what you can do to get ready. The ATO says it will provide an update about the guidance and support practitioners can expect from it. There’ll also be a panel discussion and an opportunity to ask questions.
March deadline for “modern slavery” reporting
The new Australian modern slavery reporting laws apply to Australian entities and foreign entities carrying on business in Australia with annual consolidated revenue of more than $100 million. Entities that fall into this category need to lodge an annual “modern slavery statement” which will be publically available on the Australian Border Force register. The deadline for reporting for entities with a year-end date of 30 June 2020 is 31 March 2021. The deadline for entities with a year-end date of 31 December 2020 is 30 June 2021.
Hundreds of unaudited SMSF returns leads to tax agent registration termination
The AAT has upheld a TPB decision to terminate the registration of a tax agent after it took disciplinary action for the agent lodging 125 SMSF annual returns over nine years. The TPB, in announcing the AAT decision, said there were serious consequences for failing to act honestly and with integrity. Ten tax practitioners have now been terminated by the TPB as a result of false declarations in SMSF annual returns, and it has also suspended the registration of four other practitioners.
Importance of SMSF auditor independence
Further to the above, the ATO has re-stated the requirement that approved self-managed super fund (SMSF) auditors must comply with independence requirements as part of their professional obligations under the superannuation laws. The independence requirements are set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards), produced by the Accounting Professional & Ethical Standards Board (APESB).
Evidencing SMSF property valuations
The ATO recently clarified the evidence that is required to support real property valuations within SMSFs, particularly in light of the unique challenges brought about by COVID-19.
Whacky Tax Fact
A tax on foods containing saturated fat was introduced in Denmark in October 2011 at a rate of €2.14 per kilogram of saturated fat. Believed to be a world first, the targets were butter, milk, cheese, pizza, meat, oil and processed food if they contained more than 2.3% saturated fat. Two Christmas dinners later, the “fat tax” was repealed in January 2013.
Lodgment widget display error advice
The ATO advises that the lodgment widget is currently showing information that may be different to what was displayed on Friday, and practitioners may receive calls or queries about this. The ATO says it recognises that this will cause irritation or concern but promises the widget will return to usual tomorrow, Wednesday 17 March (also the day the 85% on-time lodgment tool is to be brought back online, by the way). It has published more information on its troubleshooting page.
Issues paper released by ACCC on digital platform services
The ACCC is to examine the provision of web browsers and general search services to Australian consumers and the effectiveness of choice screens in facilitating competition and improving consumer choice. To inform a report due in September 2021, the ACCC is seeking views on the operation of browsers and general search services in Australia, and invites submissions by 15 April on the matters outlined in a just-published issues paper.
Draft determination on ATO’s compliance approach to benefits provided if travelling/staying
Draft practical compliance guidelinePCG 2021/D1 outlines the ATO’s compliance approach when determining if allowances or benefits provided to an employee relate to travelling on work, or living at a location, given that the ATO states that thenature of an allowance is not to be determined by reference solely to its name or the period for which it is paid. Comments are due this Friday, 19 March.
Treasury announcement on changing offshore banking rules
Australia’s Offshore Banking Unit, operating since 1992, provides a more attractive tax rate for offshore banking activity conducted by Australian registered banks. However a recent review by the OECD’s Forum on Harmful Tax Practices concluded that the concessional tax rate and the “ring-fenced” nature of the regime was a concern. As such, Treasury has announced a removal of preferential tax rates and closing the scheme to new entrants.
TFN scam alert – warn your clients
The ATO is receiving increasing reports of people losing money to automated phone scams. These scammers will tell the recipient their tax file number (TFN) has been suspended due to illegal activity. They will then ask them to pay a fine to release it or transfer funds into a holding account to protect it from further misuse. The ATO is advising practitioners to warn their clients to look out for this scam and ask them to contact you or the ATO if they are ever unsure whether an ATO interaction is genuine.
Getting back on track, tax wise
If your client is struggling to manage tax obligations or pay tax, the ATO says it can work with them to find a solution tailored to the situations they may find themselves in and help get them back on track. It says it’s better to contact the ATO early, especially if they can’t lodge on time or will be struggling to pay a tax bill. Lodging activity statements and returns on time also indicates that taxpayers are aware of their obligations and are doing their best to meet them.
Tax liabilities can be taken care of by direct debit, in full or instalments
The ATO points out, for the “benefit” of your clients who are not caught in the situations above, that the following tax liabilities can be paid through direct debit — personal income tax, fringe benefits tax, business activity statement, instalment activity statement, company income tax, superannuation fund income tax, and superannuation guarantee charge. It has provided some guidance on making a direct debit request. There are also other payment options.
When is there an enterprise for GST purposes?
Determining whether an enterprise exists for GST purposes, particularly in relation to small-scale property developments, is already difficult. A recent case makes the issue even more complex and raises concerns about the ATO’s approach.
COVID-19 working from home FBT exemption fact sheet
The ATO points out that an employer’s fringe benefits tax (FBT) obligations may be affected if they have provided a benefit to their employee to facilitate working from home arrangements due to the affects of COVID-19. It has issued a fact sheet that covers certain residual, property or expense payment benefits that may be exempt from FBT or have their taxable value reduced under the “otherwise deductible” rule. Items covered may include work laptop, other portable electronic device and tools of trade, general office equipment including desks, chairs, cabinets, stationery, computer monitors and peripherals, and other items generally available for use in an office setting.
ATO identifies new illegal scheme targeting SMSFs
A newly identified scheme has been uncovered by the ATO where SMSF trustees are informed that they can set up a new SMSF to roll-over the fund balance from the old SMSF and then liquidate their old SMSF in an attempt to avoid paying potential tax liabilities. The ATO is warning trustees that taking part in this arrangement and others like it can result in civil and criminal actions and could ultimately put retirement savings at risk.
Commonwealth Gazette notifies of continued JobKeeper data matching
A notice has been published advising that the data matching of JobKeeper recipient data with other information held by government bodies is to continue as the JobKeeper scheme was extended to 28 March. The exercised focuses on the overlapping populations of people who may be registered for both the JobKeeper program and social security payments.
Draft ruling on PSI details key concepts
The draft TR 2021/D2 is about the personal services income (PSI) rules contained in Part 2-42 of the ITAA97 and how they apply to an individual or entity. It explains the meaning of PSI, what is not PSI, determining whose PSI it is, who is not subject to the PSI rules, the effect of the PSI rules, a personal service business (PSB), the PSB tests, PSB determinations, and the application of Pt IVA of ITAA 1936 to PSI rules.
Breach reporting regulations draft guidance
Treasury is seeking submissions on the draft regulation amendments and explanatory materials for changes to regulations that support the breach reporting rules on the back of the Hayne Royal Commission recommendations. Submissions are due by 9 April.
Guidance published on voluntary JobKeeper repayments
Late last week, the ATO published guidance in relation to JobKeeper voluntary repayments. “A voluntary repayment of JobKeeper may be deductible only in limited circumstances and only if the voluntary payment is clearly appropriate to achieve, or directed at achieving, the business objectives of the business,” the guidance notes, but goes on to state: “However provided you treated your original JobKeeper payments correctly as assessable income, if you then act in good faith and use your best endeavours to determine whether you are entitled to a deduction for the voluntary repayment, we will generally not apply compliance resources to confirm if the payment is deductible.”
Determination adds repeal provision to law on GST-free car parts for disabled
A legislative instrument has been registered that adds a repeal provision to the original determination that allows for vehicle parts to be provided GST free to the disabled. The new repeal date is set at 1 April 2024.
Financial complaints ombudsman breaks down its COVID-19 flash points
The Australian Financial Complaints Authority (AFCA) has compiled its COVID-19 complaint data from 3 March 2020 to 28 February 2021, which has revealed some trends.