Newly registered tax practitioners encouraged to join the conversation
The ATO holds open forums on a regular basis, and is encouraging new practitioners to take part in the upcoming sessions. Attendees can ask questions and hear tips and tricks that will help advance their career. See a list of topics here, and scroll down for the registration details.
Lodgment deferral tips and traps
The ATO is asking practitioners to not telephone it to request a deferral as it says it cannot accept deferral requests over the phone. Instead is asks practitioners to download the current online application form for the appropriate deferral type. It has also provided some deferral tips to keep on hand.
GST and adjustable beds and pressure management mattresses
This week the ATO issued draft goods and services tax determination, GSTD 2021/D1. This draft determination discusses when the supply of an adjustable bed, pressure management mattress, pressure management overlay or spare part is GST-free under subsections 38-45(1) and 38-45(2) of the GST Act. The ATO issued the draft determination because the market for these products has developed and in some cases there is now uncertainty whether they meet the criteria to be GST-free. In summary, an adjustable bed, pressure management mattress or pressure management overlay is GST-free only if it is specifically designed for people with an illness or disability, not widely used by people without an illness or disability, and covered by table items 59, 60 or 66 of Schedule 3. The ATO invites comments by 21 May.
Hybrid mismatches and compliance risks draft guideline
PCG 2021/D3 contains practical guidance as to the ATO’s assessment of the relative levels of tax compliance risk associated with imported hybrid mismatches addressed by Subdivision 832-H of the ITAA97. It sets out the Commissioner’s approach to reviewing whether a taxpayer has undertaken reasonable enquiries in relation to the imported hybrid mismatch rule for non-structured arrangements.
STP Phase 2 expansion refresher livestream recording
The webcast “Introduction to Single Touch Payroll – Phase 2” was recorded by the ATO, where Services Australia and industry professionals discussed what STP Phase 2 is, what the changes will mean for you and your clients, and what you can do to get ready. There was also a panel discussion where audience members could submit questions. The recording is now available for you or your clients to refresh your knowledge and be better prepared. A transcript can also be downloaded.
In other news…
The stress of 2020 manifested under screw tops
In what may drive readers to reconsider signing on to “dry July” this year, new data from Roy Morgan’s Alcohol Consumption Report shows the proportion of Australians who drink alcohol increased by 0.8% points to 67% in 2020. Driving this increase were significant increases for wine and spirits during the COVID-19 pandemic. The number of Australians drinking wine increased from 8,065,000 Australians (41.0%) to 8,814,000 (44.3%) – an increase of 3.3% points over the year. In addition there were 6,277,000 Australians (31.5%) drinking spirits in 2020, up from 5,465,000 (27.8%) a year earlier – an increase of 3.7% points. However the long-term trends continued with fewer Australians drinking beer, cider, liqueurs and fortified wines in 2020.
Overview of Australia’s services sector productivity
The Productivity Commission says in a new report that Australia’s economy, like that of almost all other rich countries, is increasingly dominated by its service sector. This paper sheds light on the evolution of the services sector in Australia, busts some common misconceptions about services, and highlights the challenges associated with services productivity measurement and growth.
Remember the ATO live webcast, today 2pm AEST
The topic of today’s webcast is “Helping your clients with business investment measures”, with an expert panel hosted by Sylvia Gallagher, Assistant Commissioner, ATO. The discussion and Q&A session will talk about the temporary full expensing and loss carry back measures.
ABS says early access to super used to pay household bills
According to a new report released by the Australian Bureau of Statistics (ABS), most people who accessed their superannuation early due to financial hardship caused by COVID-19 used it to pay their mortgage, rent or other household bills. The ABS says 29% mainly used it to pay their mortgage or rent, while 27% used it for household bills. Another 15% used it to pay credit card or personal debts, while around one in eight people (13%) added it to their savings.
Industrial relations laws have altered to deal with casual employment
The Fair Work Act was amended very recently to change some workplace rights and obligations for casual employees. The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 introduces a Casual Employment Information Statement, a definition of casual employment, and a pathway for casual employees to move to full-time or part-time (permanent) employment. See guidance from the Fair Work Ombudsman here.
Be COVID-19 fraud aware, says business.gov.au
The government website business.gov.au is warning all business owners to be very wary of COVID-19 scams and fraud schemes. It says scammers target small business owners as they recognise they are busy and usually have limited resources to keep their systems safe. Scam risks have increased as a result of the COVID-19 pandemic, so the Federal Government has compiled a Be COVID Fraud Aware guide.
ATO increases scope for clients to be able to manage payments online
The relatively recently introduced portal, Online services for business, enables businesses and approved SMSF auditors to engage with the ATO online on multiple devices, including smart devices such as a mobile phone or tablet. The service has been updated with new payment features that enable clients to add and manage up to three credit or debit cards in their account profile, set up a payment plan with automatic direct debits from a card, and make one-off payments using a card. Note that the incumbent portals, the Business Portal and electronic superannuation audit tool (eSAT), are being decommissioned soon.
GST and lease arrangements: Erratum to erratum action
An erratum has been issued, GSTR 2015/2ER1ER1, which corrects the application date for the addendum to GSTR 2015/2 (development lease arrangements with government agencies). The addendum to that (GSTR 2015/2A1) applies on and from 31 March 2021.
Deductibility of lump sum payments to secure medical centres’ business model
A Full Court of the Federal Court Australia has held that the Commissioner correctly denied tax deductions to a business operating medical centres on the basis that lump sum payments made by the business to medical practitioners, which secured the practitioners’ exclusive practice at the centres, were on capital account.
SMSF audit COVID concession extended
To help practitioners cope with SMSF auditor obligations in the ongoing pandemic environment, the ATO has announced that it is extending its transitional compliance approach to non-arm’s length expenditure. SMSF auditors do not need to modify Part A of the SMSF IAR where the compliance approach for non-arm’s length expenditure applies for the 2021-22 income year. PCG 2020/5 now covers from the 2018-19 to 2021-22 income years.
JobMaker scheme access widens for STP-constrained employers
An instrument has been registered that alters some reporting obligations from the primary instrument which had locked out employers that were unable to provide information in the required manner due to STP software constraints. The new legislative instrument provides an alternative mechanism to meet reporting requirements for the scheme.
Opt out of full expensing schedule for SAP entities or early return lodgment
The ATO has provided a schedule for individuals, companies, partnerships, trusts and attribution managed investment trusts (AMIT) who are claiming a deduction or opting out of temporary full expensing or backing business investment, and either have an approved substituted accounting period with a year ending before 30 June 2021, or need to lodge a tax return for part of the year (NAT 75345).
Small business oversight moves to Treasury
As part of the Machinery of Government rearrangement, the responsibility for small business policy and programs, and the Small Business and Family Enterprise Ombudsman Act, has been moved from the Department of Industry, Science, Energy and Resources to Treasury. Another central change was that the Digital Transformation Agency shifted to the Department of Prime Minister & Cabinet from Services Australia. The Administrative Arrangements Order was signed last week.
Margin scheme update not quite updated yet — but very soon
An item from yesterday’s Daily Update, Margin scheme guidance enhanced, jumped the gun a little in that the updated web material has not yet been published. The ATO will let us know when this has been put in place.
Fair Work guidance updated on COVID vaccinations and the workplace
The Fair Work Ombudsman has expanded its information on COVID-19 vaccinations and issues that might arise at workplaces. For both employers and employees, Fair Work says there are methods that can be used to help resolve any workplace issues, as well as access to suitable tools and resources and guidance on where to go for the right help.
Whacky Tax Fact
The introduction of electronic lodgment of tax forms over the final decades of the last century not only reduced the time it took to send out returns from 10 weeks to two weeks but had a significant impact on the incidence of repetitive strain injury among data processors at the ATO. The introduction of GST in 2000 may also have had an impact on RSI incidents for ATO staff over the following decade.
Single disciplinary body for financial advisers
The Federal Government has released for consultation a draft bill that expands the role of the Financial Services and Credit Panel within ASIC to operate as the single disciplinary body for financial advisers. The draft legislation and its EM also creates new penalties and sanctions that apply to financial advisers found to have breached their obligations and introduces a new annual registration system. Responses are being taken until 14 May.
HomeBuilder scheme gets construction deadline extension
The Federal Government’s HomeBuilder scheme has had an extension given to the program’s construction commencement deadline. Existing applicants will now have 18 months to commence construction from the date the building contract is signed (previously there was six months granted to commence construction). Applicants who signed contracts between 4 June 2020 and 31 March 2021 (the HomeBuilder eligibility period) can access this extension.
FBT returns and payments due dates
The ATO has advised that while the statutory due date for FBT return lodgment and payment is 21 May, lodgment of 2021 FBT returns for all tax agents is 25 June if the return is lodged through the practitioner lodgment service (PLS), and 21 May if the return is lodged by paper. This is a permanent change in response to feedback from tax practitioners.
ACT payroll tax exemption updated to accommodate court decision
After the case Nationwide Towing & Transport Pty Ltd & Ors v Commissioner of State Revenue (see the decision here), the ACT Revenue Office has deemed it necessary to update the rules around payroll tax and some exclusions for contractors. The ACT will now adopt the Victorian position in that the Revenue Office does not need to be satisfied that a contractor conducts a genuine independent business in order for the exclusion to apply.
SuperStream mandatory for SMSFs from 1 October
The ATO is reminding trustees that from 1 October, rollovers into or out of any SMSF can only be performed using SuperStream. Additionally, certain release authorities may be processed in SuperStream (see SuperStream rollovers and release authorities for SMSFs). SMSFs must be able to receive employer contributions and the associated data electronically using the SuperStream standard.
Margin scheme guidance enhanced after user mistakes
If your client sells or develops property, they may be eligible to use the margin scheme, reducing the amount of GST payable on some property transactions. However the ATO says it has noticed errors to the two key parts to the margin scheme that taxpayers must get right – eligibility and calculation. It has therefore improved its web content, which includes new videos, updated examples, and a link to the GST property decision tool.
Instrument issued to define data required for director ID
An instrument issued spells out the information the registrar will require in order to be able to give a Director Identification Number (DIN) to an individual who has applied for one. The data standard includes how the registrar can collect information, and the manner and form in which information is to be given. Also issued is another instrument that authorises the disclosure of DIN information to public governance, performance and accountability bodies, courts and tribunals.
SMSF compliance checklists
Some SMSF trustees have a looming annual return (SAR) deadline of 5 June. To help, and not just for this SAR but more generally, the ATO has a range of SMSF checklists to keep track of at every stage of compliance and help manage the fund and meet each SMSF obligation.
Small business webinars from ATO
The ATO is hosting webinars suitable for your small business clients on a variety of topics that suit all small businesses and other topics that are specific to particular industries or circumstances. The webinars are interactive online seminars presented by experienced tax officers. They are live and attendees can ask questions, but must be online by the start time as the session will be locked 10 minutes after the webinar begins.
Financial Services Council green paper on financial advice
The FSC is seeking submissions (by 1 July) on the future of the financial advice sector, which it says is facing significant challenges, with rising regulatory requirements and cost pressures undermining its economics. The FSC supports the “best interests duty” remaining the bedrock of the advice sector and for advisers to be held to a high standard of education and subject to a code of ethics.
Granny flat legislation: Exposure bill seeks viewpoints
The Federal Government is seeking stakeholder views on exposure draft legislation and explanatory materials for amendments that would give effect to targeted capital gains tax (CGT) exemptions for granny flat arrangements. Under the measure, CGT will not apply to the creation, variation or termination of a formal written granny flat arrangement providing accommodation for older Australians or people with disabilities. Submissions close 29 April.
FBT draft legislation on retraining costs
The Federal Government is seeking stakeholder views on exposure draft legislation and explanatory materials for amendments that would give effect to the introduction of an exemption from fringe benefits tax (FBT) rules for employer-provided retraining and reskilling benefits for redundant, or soon to be redundant, employees, where these benefits are not sufficiently connected to their current employment. Submissions close 29 April.