Daily updates: 23-27 November

27 November

NEWS
Good news for some to hold on to over the weekend
The extra COVID-19 economic support payments announced by the Federal Government recently will start to hit people’s accounts next week. Eligible recipients will receive two separate $250 payments, with the first to be paid progressively from 30 November 2020 and the second from 1 March 2021. The payments will support more than 2.5 million Age Pensioners, about 400,000 self-funded retirees with a Commonwealth Seniors Health card, more than 1 million people with disabilities and carers, 760,000 low income families as well as other eligible pensioners and veterans.

Victoria’s Sole Trader Support Fund deadline extended
Applications for Victoria’s Sole Trader Support Fund are now open until 30 December to assist more sole trader businesses in specific industries with their transition to “COVID normal”. Grants of $3,000 are available to help with overhead costs. Apply with Business Victoria.

How many jobs did JobKeeper keep?
The Reserve Bank has produced a paper studying the outcomes of the JobKeeper payment scheme and the extent to which JobKeeper cushioned employment losses in the first four months of the program. To do this, the RBA researchers used worker-level data from the Labour Force Survey and an identification strategy that “exploits a threshold in eligibility to infer causality”. The paper does not consider the longer-run effects of JobKeeper on employment or the indirect channels through which JobKeeper may have affected employment.

Clients may need to act now to beat the early release of super Christmas rush
The ATO advises that should clients be contemplating accessing some early released super under this COVID-19 support measure, time is short. If they apply through ATO online services in myGov before 11 December 2020, the ATO says in most cases this should allow enough time for it to process their application. Note that if early release is based on compassionate grounds, the deadline is 4 December. Applications cannot be accepted after 31 December. If clients have trouble applying online, there is one more last minute window of opportunity where they can call 1300 662 211 for assistance between 29 and 31 December 2020 (10.00am and 6.00pm AEDT).

FULL EXPENSING ASSET WRITE-OFF Q&As

  • Please confirm that any business that has a turnover below $5 billion can fully expense and asset. We are a small business that does not use the small business depreciation concession. Can such a business fully expense a second hand asset? Read more
  • I assume that when our clients come to sell/trade in these assets in a few years, they are going to get the unpleasant surprise that they can’t deduct the sale/trade price off the general small business pool balance and will be assessed on the full sale/trade-in price? Read more

26 November

NEWS
First Peoples’ COVID-19 Business Support Fund
Applications are now open for the First Peoples’ COVID-19 Business Support Fund. Aboriginal businesses that have been affected by the pandemic, such as through temporary closure or trading restrictions, can apply for grants of up to $10,000 to help them get back on their feet. Applications with Business Victoria are open until 29 January 2021 or until funds are exhausted, whichever is earlier.

APRA publishes superannuation statistics to September 2020 quarter
APRA has released its quarterly superannuation performance publication and the quarterly MySuper statistics report for the September 2020 quarter. Among its findings was a 1.6% reduction in the value of total superannuation assets over the 12 months to 30 September 2020, which was primarily a result of investment losses sustained across the industry during the March quarter. 

First home owner state budget boost for regional Victorians
In case you missed it, also announced (scroll down) in the Victorian budget was that the First Home Owner Grant of $20,000 for new homes built or bought in regional Victoria will be extended by 12 months to apply for contracts of sale entered into before 30 June 2021.

Cheers: Some Sydney pubs are doubling the NSW Government’s shout
The Sydney Collective – which includes Watson’s Bay Boutique Hotel, Balcony Byron Bay, The Morrison Bar & Oyster Room, Imperial Erskineville, Park House, Northies, Daniel San and Republic Hotel – has announced it will double the value of the $25 “Out & About” vouchers the NSW Government is handing out to six million Sydney residents when they present them at any of the group’s venues. Sydney Collective says it wants to support the communities who have helped keep the local watering holes alive during the time of COVID-19.

FULL EXPENSING ASSET WRITE-OFF Q&As

  • Are solar panels for a commercial building that is rented to tenants able to be fully expensed? Read more
  • If a motor vehicle costs $100,000 and, therefore, only $59,136 is claimed as a tax deduction under the full expensing rules, when the vehicle is sold, what happens to the $40,864 that has not been deducted? Read more

25 November

NEWS
Victorian Budget handed down
Highlights include more than $2 billion in tax deferrals, including allowing businesses with payrolls of up to $10 million to defer their 2020-21 payroll tax liabilities for up to 12 months. There will also be a full refund and waiver of 2019-20 payroll tax for small and medium businesses, as well as exempting businesses in Victoria participating in the JobKeeper program from payroll tax and WorkCover premiums on additional wages paid to staff who were stood down or earned less than the JobKeeper payment. Businesses will get a tax credit of 10 cents for every dollar increase in taxable Victorian wages. The Government is also waiving 2020 and 2021 liquor licence fees, while the 2020-21 Fire Services Property Levy is frozen at the 2019-20 revenue target. Increases to the landfill levy have also been deferred. Also, for contracts entered into from 25 November to 30 June 2021, there will be a stamp duty concession of up to 50 cents in the dollar for homes valued at up to $1 million. Relief will be targeted at newly built or “off-the-plan” homes, which will receive the 50% waiver. Existing homes will be eligible for a 25% waiver. See the full suite of Victorian Budget papers here.

Free TPB webinars today; so register NOW
The TPB is hosting two free webinars for tax practitioners today. At 11am AEDT the topic is professional indemnity insurance  (register here), and at 3pm AEDT (register here) the TPB will showcase its compliance projects and its focus on targeting those cases with the highest risk. It will also share some recent compliance case studies.

Responsible lending changes resisted by consumer group coalition
A coalition of consumer advocates have published a submission to Treasury on exposure draft legislation that the group says would repeal responsible lending laws in the National Consumer Credit Protection Act. The submission (which is not yet published on the Treasury site) provides detailed analysis, including case studies, about what the group labels as concerning implications of the proposals.

FULL EXPENSING ASSET WRITE-OFF Q&As

  • If Division 40 depreciation is being used and there is a low value pool, do assets costing less than $1,000 have to be added to this pool or can they be expensed immediately? Read more
  • Is the instant asset write-off available to entities with an aggregated turnover of less than $500 million or $5 billion? Read more

24 November

NEWS
Corporate regulator consults on reference checks for financial advisers and mortgage brokers
ASIC has released a consultation paper, Implementing the Royal Commission recommendations: Reference checking and information sharing, which is looking for feedback on its proposed approach to implementing aspects of certain law reforms arising from the Hayne Royal Commission recommendations.

Your client should talk to you, but if not, here are the ATO’s business wind up red flags
Ideally your clients, when considering pausing, changing or closing their business due to the current economic conditions, will talk to you. But you could do them a favour and warn them about untrustworthy advisers who may recommend inappropriate or illegal behaviour. This could include illegal phoenix activity, where businesses intentionally remove their assets prior to winding up so that they can be used in a copy of the original business. The ATO has a list of red flags to watch for.

ATO is to call entities it believes have outstanding associated schedules
Depending on the information provided in an income tax return, the entity involved may have an obligation to lodge an associated schedule. In the coming weeks, the ATO will be contacting publicly listed and multinational business clients that have outstanding income tax schedule obligations. As their authorised tax adviser, you may be required to be involved.

Financial institutions needing to file a FATCA report
A Foreign Account Tax Compliance Act (FATCA) report is required from reporting Australian financial institutions every calendar year. The ATO has provided a “Small Reporter Tool” user guide to aid those required to lodge a FACTA.

FULL EXPENSING ASSET WRITE-OFF Q&As
The following builds on questions stemming from our recent Full Expensing of Assets webinar (access the recording here). Further Q&As will follow in coming Daily Updates.

  • If an entity is put into tax losses by fully expensing assets, what are the implications of having these losses? Read more
  • Are there any implications in relation to CGT event E4?  Read more

23 November

NEWS
More businesses to qualify for full expensing asset write off
Treasury has announced that the Federal Government is to expand the eligibility rules for the full expensing of assets to allow for a new alternative test to access the temporary measure. To satisfy the new test, companies must have less than $5 billion in total statutory and ordinary income (excluding non-assessable non-exempt income) in either the 2018‑19 or 2019‑20 income year; and invested more than $100 million in tangible depreciating assets in the period 2016‑17 to 2018‑19. Treasury says the change will mean businesses with an aggregated turnover of more than $5 billion due to the income of an overseas parent or associate will now be able to qualify provided they meet the additional investment requirements. The Government will also allow businesses to opt out of temporary full expensing and the backing business investment incentive on an asset-by-asset basis. It says this change will provide businesses with more flexibility in respect of these measures, removing a potential disincentive for them to take advantage of these incentives.

JobMaker ‘rules’ still open for suggestions and input
While the JobMaker Hiring Credit legislation has passed into law, the rules that govern the operational realities of this measure are still subject to consultation. But you’ll have to be quick, as submissions close at the end of this week.

ASIC releases consumer research on insurance in super
ASIC has released independent research on the experiences of superannuation fund members who directly engaged with their fund about insurance held through superannuation. The report, Consumer engagement in insurance in super, presents findings from research exploring the experiences of super fund members, who were not using a financial adviser and directly contacted their fund to make inquiries about or make changes to their insurance arrangements.

Guidance on remission of SG charge and penalty relief
Practice Statement PS LA 2020/4 sets out what ATO officers will need to consider in making a decision on the remission, in whole or part, of the additional super guarantee charge (SGC) imposed under subsection 59(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA) where an employer fails to lodge a super guarantee (SG) statement by the lodgment due date. This additional SGC is referred to as the Part 7 penalty. The PS LA 2020/4 also sets out when penalty relief is appropriate to be applied.

FULL EXPENSING ASSET WRITE-OFF Q&As
The following builds on questions stemming from our recent Full Expensing of Assets webinar (access the recording here). Further Q&As will follow in coming Daily Updates.

  • If a business has a turnover of between $10 to $50 million, can it become a small business entity in the year ending 30 June 2021 and write off the full balance of the small business pool at 30 June 2021? Read more
  • Assume an individual purchases an asset and uses it to partly produce assessable income as an employee and also to partly produce assessable income as a small business. What is the position in relation to the full expensing of the asset? Read more

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