Daily updates: 8-12 March

12 March

Grants of $30 million to support local manufacturing
The Federal Government has announced through its Advanced Manufacturing Growth Centre the establishment of a grants program called the Commercialisation Fund. Grants will target six priorities — medical products, food and beverage, resources technology and critical minerals processing, recycling and clean energy, defence, and space. Commercialisation Fund grants will be between $100,000 and $1 million and must be matched by industry. Your clients who fit the bill can apply here.

COVID-19 travel voucher regional scheme in Victoria extends to Melbourne
Based on the success of the Victorian Government’s Regional Travel Voucher Scheme, 40,000 vouchers will now be offered to Victorian residents to contribute to the costs of accommodation, tourism attractions or tours undertaken in any of the 26 local government areas comprising metropolitan Melbourne. Registrations open today at 10am and are offered on a first-come, first-served basis. The eligible travel period is 19 March to 16 May, with a claim period 26 April to 30 May.

Tasmania’s HomeBuilder Grant scheme extensions closing soon
The State Revenue Office of Tasmania is reminding eligible participants in its HomeBuilder scheme that its three-month extension to a 31 March contract signing cut-off is fast approaching, and that the scheme cannot be extended further. A construction commencement condition was also extended from three months to six months. The similar Federal Government scheme, with a reduced grant amount from 1 January, also closes 31 March. Applications for both close 14 April.

ASIC’s checklist when applying to be an approved SMSF auditor
The Australian Securities and Investments Commission has provided a checklist to use when submitting an application for registration as an approved SMSF auditor.  It includes the statement from applicant, an audit hours log book and the statement from supervisor.

Don’t get scammed — that email may not be from the TPB
The TPB has had reports that some tax practitioners have received emails claiming to be from it. The sender demands the recipient owes the TPB money and if they don’t pay their registration will be cancelled. But it is all a scam, with the TPB saying if you receive a suspicious email it recommends you contact the person or business separately to check the email is legitimate, don’t open any unknown links or attachments, and update your anti-virus software on all devices used to access email. It shares its cyber aware tips here.

Helping to protect your clients from the effects of illegal phoenixing
The ATO is very aware that some business owners look for ways to avoid paying their debts, intentionally winding up or liquidating, then starting a new company to continue the same business activities without the debt. It has compiled a few simple steps to stop illegal phoenix activity from compromising your client’s business.

In other news… Women at work during the COVID-19 crisis
In the same week as International Women’s Day, the Grattan Institute has released a study titled Women’s work: the impact of the COVID crisis on Australian women. The report contends that Australian women copped a triple-whammy — they lost more jobs than men (almost 8% at the peak of the crisis compared to 4% for men), they shouldered more of the increase in unpaid work, and they were less likely to get government support. Click here for the briefing charts.

11 March

SME Recovery Loan Scheme to be expanded
In an announcement released today on what has been dubbed a “replacement” to JobKeeper (a plan to offer half-price airline tickets, which readers will have seen in many news reports this morning) there was also an item that many of your clients may be more interested in. Scroll down this joint media release to what must be Josh Frydenberg’s contribution, and it is announced that the loan guarantee for SMEs will be expanded and extended. The SME Recovery Loan Scheme will see government take on more of the guarantee, moving from a 50/50 backing with banks to an 80/20 split. The expanded scheme will also increase the size of eligible loans, increasing from $1 million under the current scheme to $5 million. Businesses with a higher turnover will also benefit under the expanded scheme, with the maximum eligible turnover increased from $50 million to $250 million.

Super Scheme Smart, the spiv-busting initiative
Recently there has been an increase in schemes targeting people who are actively planning for retirement, as well as targeting the financial planners and advisers who specialise in providing SMSF advice to self-funded retirees. The ATO’s Super Scheme Smart information pack is designed to educate financial advisers, planners and other practitioners on retirement planning schemes that are of concern, and will also help you alert your clients to the dangers of these schemes.

Update your PI insurance details, urges TPB
The TPB says it is concerned that tax practitioners are letting their professional indemnity (PI) insurance obligations slip, and is reminding practitioners not to forget they still need to update their details. “As a registered tax practitioner, you are required to ensure your PI insurance details are up to date and that you are maintaining your ongoing registration requirements.” The TPB has also produced a video of step-by-step instructions.

The “at risk rule” and JobKeeper payments to R&D entity
The ATO is developing a determination on income tax and notional deductions for research and development activities subsidised by JobKeeper payments. The final determination will set out the Commissioner’s view on how the “at risk rule” applies to JobKeeper payments received by a research and development entity.

Business client reminder to renew relationship authorisation
If your client is listed as an indirect associate or responsible authority in Relationship Authorisation Manager (RAM), their business authorisation is valid for up to 12 months and needs to be renewed. The ATO advises checking authorisation before it expires to continue accessing government online services or managing authorisations for the business.

Focus areas of ATO’s crime taskforce announced
The ATO says serious financial crime costs the Australian community millions of dollars in lost revenue every year. Its Serious Financial Crime Taskforce (SFCT), an ATO-led joint-agency taskforce, has found that the current COVID-19 situation has provided a platform for criminals to become more active, targeting vulnerable people at a time when they need help. It is now targeting cybercrime (technology enabled crime) affecting the tax and superannuation systems, offshore tax evasion, illegal phoenix activity, and serious financial crime affecting the ATO-administered measures of the Commonwealth Coronavirus Economic Response Package.

Point-of-sale record manipulation an ATO target
An electronic sales suppression tool (ESST) is a hardware or software tool connected to a business’s point-of-sale (POS) system that manipulates sales records asnd allows sales and income to be under-reported. The ATO is warning that if one of your business clients does not removing their ESST when they have one, or does not come forward when they are involved in producing or supplying an ESST, they will be at serious risk of an ATO audit, amendments to tax assessments and significant penalties. Coming forward now could result in remission of penalties that apply.

Tax Wrap podcast, episode 234: Debt forgiveness and CGT
Tax Wrap once again gets Tax & Super Australia’s CGT maven Kirk Wilson on the line to go over the CGT consequences of forgiving a debt. There are also traps and exceptions to watch out for.

Recovery road: What clients are telling us about the year ahead
We conduct regular surveys of members on issues that affect both their own working lives as practitioners and also the feedback they receive from their many and varied clients. The latest Tax Temperature survey asked how clients fared during the pandemic, and how they were feeling about the year ahead.

10 March

Be prepared: FBT year end is just weeks away
In the interest of keeping members and their clients up to speed regarding FBT matters for 2021, here is a link to the ATO’s FBT and COVID-19 information page. It notes that benefits not usually provided may have arisen on the back of the pandemic, so extra (and careful) guidance may be required. Note also that while the ATO has been in consultation and discussion with various parties about new car parking fringe benefits guidance, so far its position remains as described in TR 2019/D5.

New guide to family business succession planning
Produced with your family business clients in mind, the office of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has created the Introductory Guide to Family Business Succession Planning, developed in partnership with Family Business Australia. The publication provides a step-by-step guide to passing a family business on to the next generation.

ASIC’s online service for SMSF auditors
Applications to be registered as an approved SMSF auditor are now to be submitted via the ASIC Regulatory Portal. If you’re an existing SMSF auditor, you will maintain your registration details and submit your annual statements from within this portal as well. It replaced the previous online channel for approved SMSF auditors (ASIC Connect). The new portal features more pre-filled application and transaction data using information you have previously supplied, improved tracking of applications and transactions and the ability to attach supporting documents. Existing SMSF auditors will be required to register for an ASIC Regulatory Portal user account as a first step.

APRA urges super funds to address sustainability of insurance
The Australian Prudential Regulation Authority (APRA) has written to registrable superannuation entity (RSE) licensees and life insurers, urging them to address concerning trends and practices in the provision of insurance to superannuation members. APRA has noted significant deterioration in group life insurance claims experience in 2019 and 2020, with the potential for the re-emergence of unpredictability and volatility in insurance premiums.

ATO’s open forums March to June schedule released
The following link will take you to the schedule and registration details of ATO open forums for March to June 2021. Through these forums, the ATO will be delivering online conversations with various subject matter experts, discussing upcoming changes in the tax and super systems. Naturally, these contribute to your CPD requirements.

BFF (Boosting Female Founders) initiative re-opens
If you have a woman entrepreneur client, they may be grateful for you pointing out that business.gov.au has just opened round 2 of the initiative known as Boosting Female Founders (BFF, so you could become the other BFF). The program provides grants of between $25,000 and $480,000 on a co-contribution basis to successful applicants and is open to startups that are majority owned and led by women. BFF commenced last year to support women entrepreneurs to help grow and scale their startups into domestic and global markets by providing access to early stage capital. Expressions of interest for round 2 are now open (closes 22 April).

Whacky tax fact: Lincoln’s income tax
In 1861, strapped for cash with which to continue the civil war, then US President Abraham Lincoln signed a bill that imposed a 3% tax on incomes between $600 and $10,000 and a 5% tax on higher incomes. The law was amended in 1864 to levy a tax of 5% on incomes between $600 and $5,000, a 7.5% tax on incomes in the $5,000 to $10,000 range and a 10% tax on everything higher. The law was repealed in 1871 and declared to be unconstitutional, but Capitol Hill got over that inconvenience by 1909 and a personal income tax was again raised, this time to stay.

9 March

Reasonable food and drink table had unreasonable typo
In the FBT reasonable food and drink amounts table updated by the ATO on 3 March, a figure of $1,142 was published instead of what should have been $142. TD 2021/3 has now been corrected. See Table 1, in the footnote about the amount for additional adults.

Indexation increases to social security rates
The Department of Social Services (DSS) has announced that from 20 March, due to indexation, social security payment rates will increase. This includes rates for Age Pensioners, recipients of the Disability Support Pension and Carer Payment, which includes the Pension Supplement and Energy Supplement. Also JobSeeker recipients and Parenting Payment Single recipients will see an increase. See this DSS web page for full details and rates. And pending the passage of the Social Services Legislation Amendment (Strengthening Income Support) Bill 2021, the rate of JobSeeker Payment, Parenting Payment and other working-age payments should increase again on 1 April.

Travel vouchers for Queenslanders to visit FNQ
Queensland’s Premier Annastacia Palaszczuk has announced a new tourism voucher scheme by the State Government. The vouchers, worth $200 each, will be available to Queensland residents and allocated by ballot. The Premier has confirmed a total of 15,000 vouchers will be offered in a bid to encourage Queenslanders to explore the state’s far north and boost tourism. The vouchers are called Cairns Holiday Vouchers, and Queenslanders have until 11:59am AEST Thursday 11 March to apply for a “special voucher code”. Register here.

Draft GST determinations issued on eftpos interchange services
Draft legislative instruments WAN 2021/D1 and WTI 2021/D1 propose, respectively, to allow a decreasing adjustment arising from an adjustment event in respect of an acquisition of eftpos interchange services attributable to a tax period, and to allow an input tax credit on a creditable acquisition of an eftpos interchange service. Comments on both close 6 April.

Ombudsman urges reforms on taxation of small business
The office of the Small Business and Family Enterprise Ombudsman has published a research paper titled A tax system that works for small business that which focuses on ways to make small changes to our tax system that will make a huge difference to small businesses. Some are policy changes that would make life easier for the small business community, and encourage spending with them, but the bulk are administrative changes that should be quick and easy to implement. A permanent $150,000 instant asset write off for small businesses, shorter ATO audit periods and abolishing FBT and are among the recommendations.

ITAA97 has a regulation house cleaning pre-sunset
Just issued regulations remake and improve the operation of the Income Tax Assessment Regulations 1997 by repealing redundant provisions, simplifying language and restructuring provisions for ease of navigation. The incumbent regulations have a sunset date of 1 April. See also these consequential amendments.

TPB’s latest survey reveals some trends
The TPB conducts surveys on a biannual basis, the latest of which (held last November) reveals that the confidence of Australians in the tax practitioner profession remains very high. The latest results show that consumers have a high trust level in their tax practitioner (88%) and the majority rated their experience as excellent (66%). The majority of consumers (58%) advise that they have used the same tax practitioner for more than five years.

Single Touch Payroll: Phase 2 link
Last Friday’s Daily Update included an item discussing Phase 2 of STP, but the included link failed. The ATO states that the mandatory start date for STP Phase 2 reporting will be 1 January 2022. It has listed the key changes on this web page (scroll down to “Expanding data collected from STP”), but further details are yet to be provided.

8 March

ATO’s response to the pandemic and regulatory stance moving forward
Assistant Commissioner Justin Micale addressed the SMSF annual conference, and gave an in-depth look at the ATO’s response to the pandemic to support SMSFs as well as key regulatory issues for 2021 and beyond.  

OECD calls for crackdown on professionals enabling tax and white collar crimes
Countries should increase efforts to better deter, detect and disrupt the activities of professionals who enable tax evasion and other financial crimes, according to a new OECD report. Ending the Shell Game: Cracking down on the Professionals who enable Tax and White Collar Crimes explores the different strategies and actions that countries can take against those professional service providers who play a crucial part in the planning and pursuit of criminal activity, referred to in the report as “professional enablers”.

IGTO releases Edition 15 of IGoT News!
The Inspector General of Taxation says that one of its key functions is to provide independent assurance to taxpayers, tax practitioners and advisers and the Tax Practitioners Board that Australian taxation administration laws, systems and outcomes are operating fairly, effectively, consistently as intended. Its regular IGoT news bulletins keeps tax professionals up to speed.

Treasurer addresses retirement income review
In a speech to the Council on the Aging (COTA) national policy forum on retirement income, the Treasurer, Josh Frydenberg, discussed the Retirement Income Review and the future of retirement policy in Australia. He said the three pillars of the system — the Age Pension, compulsory superannuation and voluntary savings — deliver adequate incomes in retirement for most Australians and will be viable for generations to come. In measuring the adequacy of retirement incomes the system delivers, the review considered that income in retirement should “replace” around 65% to 75% of disposable working life income. This balances living standards over a person’s lifetime, and is in line with the standard used around the world, including by the OECD.

Fiscal outlook published
The Parliamentary Budget Office has released the publication National fiscal outlook: As at 2020-21 mid-year fiscal updates. This annual publication, which provides a combined fiscal outlook across all levels of Australian government, shows how governments have ramped up their spending in response to the COVID-19 pandemic.  Since the start of the pandemic, the combined fiscal bottom line of governments has deteriorated significantly, and national net debt is forecast to triple pre-pandemic levels.

New insolvency reforms could be a lifeline for some businesses
The Australian Government has made changes to the ATO’s insolvency framework to help more small businesses restructure and survive the economic impact of COVID-19, especially after JobKeeper support winds up on 28 March


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