Do you have SMSF clients with a TBAR obligation?
The ATO warns that if a transfer balance account (TBA) event occurred in your client’s SMSF between 1 January and 31 March 2021, and any member of the SMSF has a total super balance greater than $1 million, then your client is required to lodge a transfer balance account return (TBAR) by 28 April.
Risks of loss carry back and temporary full expensing measures
Consultation is being undertaken by the ATO about practitioner concerns and perceptions of risk regarding the loss carry back and temporary full expensing measures. The ATO is considering developing guidance (one of its useful “what attracts our attention” publications) on the measures. Email the ATO’s Amy James-Velagic, Private Wealth, with your input.
Changes to rollovers and release authorities for SMSFs
From 1 October 2021, self-managed super funds (SMSFs) will need to use SuperStream to roll over super to or from their funds. SMSFs will also be able to receive and action certain release authorities electronically via SuperStream.
Overview of ATO’s advance pricing arrangement program
The overview from the ATO provides general information about advance pricing arrangements and certain specific information for taxpayers. It says the program provides a mechanism for managing and mitigating transfer pricing risk by providing greater certainty on a prospective basis. This information needs to be read in conjunction with PS LA 2015/4.
ASIC releases advice fee consent and lack of independence disclosure legislative instruments
ASIC has made three legislative instruments that deal with advice fee consents and independence disclosure following the passing into law of the Hayne recommendations. These centre on trustees needing written consent before being able to pass on advice cost claims to the fund. It is likely to update existing regulatory guidance to reflect the new requirements in the Act before the reforms commence for new fee arrangements and the lack of disclosure statement on 1 July 2021. Download ASIC Corporations (Consent to Deductions – Ongoing Fee Arrangements) Instrument 2021/124) and explanatory statement, ASIC Corporations (Disclosure of Lack of Independence) Instrument 2021/125)and explanatory statement, and ASIC Superannuation (Consent to Pass on Costs of Providing Advice) Instrument 2021/126) and explanatory statement.
Quiet achievers went beyond the books during COVID-19
As the JobKeeper scheme nears its end, the role that tax agents and accountants have played to keep businesses — and people — afloat should not be underestimated.
In other news…
How Australia is faring in push towards renewable energy future
The World Wildlife Fund (Australia) has produced a report, Renewable Superpower Scorecard 2021, which looks at how our states, territories and Federal Government are performing in the race to a more renewable based energy future.
Interim Parliamentary report into skilled migration
The Joint Standing Committee on Migration has produced an interim report on the short-term considerations relating to Australia’s skilled migration program, focusing on the purpose of the skilled migration program and whether it is meeting its intended objectives, including if any immediate adjustments are necessary in the context of the pandemic recovery, and Australia’s international competitiveness in attracting entrepreneurs, venture capital, start-ups, and the best and brightest migrants with cutting edge skills.
Measure to give domestic violence victims early super access quashed
A proposed 2018 Women’s Economic Security Statement measure to give domestic violence victims access to up to $10,000 on extended compassionate grounds from their superannuation savings has been cancelled, as announced in Parliament by the Minister for Women Senator Marise Payne. See page 108 onwards of this Hansard extract.
Basic authorisation renewal for employees in RAM
An employee’s Basic authorisation in RAM is valid for 12 months. If you are the principal authority or authorisation administrator, you will receive reminders to renew the authorisation, and will also need to set up permissions again in Access Manager after renewal is completed.
changes legislation passes into law
The Social Services Legislation Amendment (Strengthening Income Support) Bill 2021 has been passed by both houses and is now law. It increases the rate of the JobSeeker Payment, Parenting Payment and other working-age payments from 1 April. Other measures will be extended to 30 June, including expanded qualification criteria for recipients of JobSeeker and Youth Allowance (other) payments in circumstances where the person is required to quarantine or self-isolate due to COVID-19, waivers of the ordinary waiting period for JobSeeker, Parenting Payment and Youth Allowance, and the portability period for certain age pensioners and recipients of the disability support pension.
ASIC announces “no action” strategy on virtual AGMs
ASIC will shortly adopt (no date set yet) a temporary ‘no action’ position in relation to the convening and holding of virtual meetings. In order to provide the market with a degree of certainty, ASIC’s ‘no action’ position will support the holding of meetings using appropriate technology, facilitate electronic dispatch of notices of meeting including supplementary notices, and allow public companies an additional two months to hold their AGMs.
Downsizer contributions to super
Older individuals aged 65 years or more may be eligible to make a downsizer contribution, of up to $300,000, to their super fund from the proceeds of selling or partially selling their home which is their main residence. They can only access this downsizer arrangement once, contributing from the sale of one home, including the sale of a partial interest in that home. The resulting contribution does not count towards the contribution cap.
ATO lists key changes over March in Online service for agents
Over March, there were some central improvements to some of the facilities in Online services for agents. You can now you can view payments made for JobMaker Hiring Credit claims, and amend a submitted JobMaker Hiring Credit claim for a claim period that has not ended (visit JobMaker Hiring Credit key dates). Also the form for lodging an objection now includes fields for you to provide the grounds for the objection and reasons for your client not lodging the objection on time. It is no longer mandatory to upload an attachment to this form.
Apple devices now have myGovID screen reader
The ATO advises that screen reader functionality is now available for Apple devices with the latest version of the myGovID app. The Android version is not far away. Go to Accessibility in your device and turn on VoiceOver.
ATO experiencing delays in excess contribution advice
The ATO is approaching super funds to release excess funds and other charges for clients who did not make a choice on the tax treatment of excess non-concessional contributions, however it is experiencing a delay in the process. Affected clients may appreciate the advice.
5 tax tips for navigating the small business CGT concessions
There are certain central elements that must be understood in order to negotiate a safe but effective way through the small business CGT concessions. These include knowing who or what an affiliate is, a significant individual or stakeholder, connected entity and much more.
New: Access myGov through your myGovID
The ATO has just announced that you can now use myGovID for personal matters, allowing you to sign in to your myGov account with your myGovID. Once connected, you can still use your existing sign in option as well as myGovID, helping you avoid losing access to your account when using other sign in options. You can disconnect your myGovID from myGov at any time.
NSW assistance for flood and storm affected businesses
The NSW Small Business Commissioner is offering businesses in certain local government areas (see below) loans of up to $130,000 at a fixed concessional interest rate to small businesses, primary producers and non-profits directly affected. Also one-off financial assistance for individuals at a rate of $1,000 per eligible adult and $400 per eligible child (claims can be lodged with Services Australia for up to 6 months). Also a fortnightly income supplement that is available to primary producers and sole traders who have lost income as a direct result of the disaster. More details are to come (check this page, and to see the 34 local areas covered).
NSW Rural Relief Authority offers help
The authority can make available assistance for natural disasters to help communities and individuals directly affected by flood, fire, storm damage or any other declared natural disaster. See what may be available here.
Queensland disaster recovery grants
The Small Business Disaster Recovery Grant, funded by the Queensland Government, will provide funding of up to $10,000 (excluding GST) to eligible businesses. A single grant payment will be made directly to the business and is to be used for business plan development, retraining, business mentoring, financial counselling, and exploring options for business sustainability. Eligibility criteria apply, and application guidelines have been provided.
ATO assistance on back of flooding
Depending on circumstances, the ATO says it can give extra time to pay debt or lodge tax forms such as activity statements, help find lost TFNs after verifying identity, re-issue income tax returns, activity statements and notices of assessment, help reconstruct lost or damaged tax records, prioritise any refunds owed, set up a payment plan tailored to circumstances, including an interest-free period, and remit penalties or interest. For more support options, see this ATO web page.
TPB reminder: Two of its COVID-19 concessions are still available
A couple of the COVID-19 concessions introduced by the TPB are available to practitioners until 30 June 2021. It has waived the requirement to complete annual declarations for some tax practitioners. If your annual declaration is due on or before 30 June 2021, you do not have to complete it until 2022 or 2023 (if your registration renewal is due in 2022). And it has temporarily removed the 25% cap for relevant technical/professional reading activity in its CPE policy until 30 June 2021.
Certain electronic payments proposed to be exempt from third party reporting
A determination has been registered that proposes certain electronic payments be exempt from the requirement to report information to the Commissioner. It proposes, from 1 July 2020, the administrator of a payment system will be exempt from third party reporting in relation to a transaction where the transaction was initiated by another entity, the other entity is required to provide information to the Commissioner (under table item 9 in section 396-55 of Schedule 1 to the TAA), and if the transaction is processed before 1 July 2020, the administrator is an authorised deposit-taking institution.
A little good news for your base rate entity clients
With the generally subdued mood of the SME landscape recently, some of your small business clients may need reminding that there’s a little good news on the horizon in the form of changes to company tax rates. While the full company tax rate is 30%, others may be eligible for a lower company rate. If your client is a base rate entity, their company tax rate is 27.5% from the 2017-18 to 2019-20 income years, but 26% for the 2020-21 income year and 25% from the 2021-22 income year onwards.
Reuniting more super with members bill is now law
The bill Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 has been passed into law. The bill amends relevant legislation to facilitate the closure of eligible rollover funds (ERFs) by 30 June 2022 and allow the Commissioner to reunite amounts received from eligible rollover funds with a member’s active account. In the 2020-21 Federal Budget, Treasury announced that the date by which ERFs are required to transfer accounts below $6,000 to the ATO to 30 June 2021. Also announced was the transfer date of remaining accounts, which will be 31 January 2022. The bill also permits trustees to transfer any account to the ATO where this in in the member’s interest.
Correction in Outlook magazine(issue 11, March/April)
In the latest Outlook magazine, an article titled “Transfer balance cap indexation: What SMSF advisers need to know” there were incorrect amounts included in calculations. In the second last paragraph in Example 1 (page 32) and in second paragraph in Example 2 (page 33). The PDF for that issue has been updated with these corrections and can now be downloaded.
Whacky tax fact
Around 1700, the Russian emperor Peter the Great placed a tax on beards. It is documented that he developed anti-beard sentiments after his 1697 grand tour of western Europe. The tour famously convinced the monarch that Russia was desperately behind-the-times — economically, scientifically, and sartorially — and inspired him to undertake substantial efforts towards modernising his country’s male population with the clean-shaven look.
Client needs to revise an activity statement? There’s a sample form for that
Realising that the revision of activity statements can seem daunting for some clients, the ATO has released a sample document that can be used to ease clients through the process. The sample PDF form (download it here, or search NAT 3233) is provided for the purpose of information only and cannot be lodged. Examples of mistakes include (but are not limited to) clerical or transposition errors, classifying a GST-free sale or purchase as taxable, classifying a taxable sale or purchase as GST-free, or double counting some of your purchases.
Self-governance for not-for-profit organisations
The ATO has provided a checklist to check how well a client’s not-for-profit (NFP) organisation understands its tax and super obligations. The checklist will assist with an NFP’s governance practices.
R&D bill introduced in and passes Senate, heads to House
The Industry Research and Development Amendment (Industry Innovation and Science Australia) Bill 2021 passed unamended from the Senate, where it was introduced, to the lower house. It amends the Industry Research and Development Act 1986 to rename “Industry and Innovation Australia” to “Industry Innovation and Science Australia” and amends the Income Tax Assessment Act 1997, Pooled Development Funds Act 1992, Taxation Administration Act 1953 and Venture Capital Act 2002 to make consequential amendments.
Queensland re-makes its land tax regulations
Administrative anomalies have meant certain aspects of land tax in Queensland have had a re-do. Changes in Land Tax Regulation 2021 cover primary production activities for the purposes of the primary production exemption, the ways to apply to the Commissioner for a clearance certificate and the associated fees, the period and documents required to elect to pay land tax by instalments plus other administrative matters.
First Home Owner Grant rules re-made for Queensland
The regulations have been tweaked to cover certain rules regarding (but not limited to) declaring certain interests that are relevant, prescribe persons included as an applicant, outline the acceptable payment methods in relation to amounts payable to the Commissioner, prescribe the rate of any interest payable by instalments, and prescribe a completion requirement for particular eligible transactions for the grant scheme.
R&D offset payment for ultimately ineligible refund can be reclaimed by Commissioner
The Full Federal Court has found the Commissioner to be entitled to recover a tax refund relating to a research and development tax offset claim for activities subsequently found to be ineligible for the offset. In Auctus Resources v FC of T, the section in play in this regard is s 8AAZN.
Online tools and calculators for you to bookmark for your practice
Current for 2020-21, tax practitioners may find the following tools and calculators to be a useful resource to keep bookmarked (or bookmark this page, since they’re all grouped together here).
Responsible lending changes face delay in Senate, so SME credit exemption extended
The National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 has made its way to the Senate without amendment. However now it is reported that the bill will not be debated in Senate until the next period of sittings, set for 11 May. One of the bill’s key elements is to extend best interests duty obligations to more advisers. Given the delay, Treasurer Josh Frydenberg has announced an extension to the exemption for small-business credit from responsible lending obligations. This was due to expire 2 April.
COVID-19 early release from super payments exclusion
In preparation for the annual pay as you go (PAYG) reporting, the ATO is reminding super fund trustees that they should ensure their systems do not include COVID-19 early release of super (ERS) payments. COVID-19 early release from super payments are tax free and are therefore not included in a member’s assessable income and do not need to be reported to the ATO.
SMSF changes to trigger an alert message from ATO
The ATO says it will send an email or text message to SMSF members/trustees when changes are made to the fund’s details, the aim of which is to reduce the risk of fraud and misconduct. And from March 2021, it will also send an alert if a fund has requested verification of the SMSF with the intent to roll over money.
Social Security changes legislation passes Senate
The Social Services Legislation Amendment (Strengthening Income Support) Bill 2021 has been passed by the Senate. After becoming law, the rate of JobSeeker Payment, Parenting Payment and other working-age payments should increase on 1 April. Other measures will be extended to 30 June, including expanded qualification criteria for recipients of JobSeeker and Youth Allowance (other) payments in circumstances where the person is required to quarantine or self-isolate due to COVID-19, waivers of the ordinary waiting period for JobSeeker, Parenting Payment and Youth Allowance, and the portability period for certain age pensioners and recipients of the disability support pension.
SuperStream and SMSFs: Worked examples and FAQs
The ATO has provided several examples of how SuperStream works in different SMSF situations. It has also provided SuperStream and SMSF frequently asked questions to help clear up misconceptions or misunderstandings from SMSF trustees.
E-invoicing service provider list updated
An updated list of suppliers of E-invoicing providers has been published on the ATO website. The service providers included on the register have completed the Australian Peppol Authority accreditation process and are trusted to operate in the network. (Note that the list is sorted randomly and does not imply a preference.)
TSA calls for the ATO to simplify Personal Services Income rules
The ATO’s recent release of draft taxation ruling TR 2021/D2 has reinforced the difficulty that Australian small businesses have dealing with personal services income tax. A major reason for this is because the ATO persists with its long-held view that the general anti- avoidance provision of the tax law (Part IVA) can still apply — even when all of the anti-avoidance tests in the personal services income rules (Part 2-42) have been passed.