In The News
What the “full expensing” write-off deduction means for business
The Federal Budget measure of allowing businesses to fully write-off eligible assets is a boon to Australian businesses, even though temporary. Just to recap, businesses with aggregated annual turnover of less than $5 billion will be able to deduct the full cost of eligible new or second-hand capital assets acquired from 7 October 2020 and first used or installed by 30 June 2022. (December 2020) Read more
Both tax and SMSF audits are still on ATO’s radar, but some leniency given
While the ATO has been focusing on the rollout of stimulus measures, it has flagged that audit work is not off the table completely. While it was stated earlier that a “conscious choice” was made not to initiate new audits during the pandemic peak, the takeaway for everyone is that audits will not go away and you’ll need to have your affairs in order. So what are the main tax audit triggers? (December 2020) Read more
Claiming interest expenses for rental properties
Interest is a common deduction and is generally seen as being deductible where it is incurred in gaining or producing assessable income. An established factor from court cases is that the deductibility of interest depends on the purpose of and use of borrowing the principal. In this article we explain what you can and cannot claim. (December 2020) Read more
ATO’s cyber safety checklist
Scammers never seem to rest, with ATO reporting it has received reports of email scams about JobKeeper and backing business investment claims with fake emails stating the ATO is investigating your claims. So what should you do to protect yourself? (December 2020) Read more
The investment option that can hide unexpected GST
New residential property is a popular investment for many, especially SMSF’s, however investors should be aware that it may bring with it unexpected GST obligations. The ATO says that from 1 July 2018, most purchasers must withhold an amount from the contract price at the date of settlement and pay it directly to the ATO and they will need to lodge two forms. (December 2020) Read more
Calling time out on your business? Some essentials you’ll need to know
When you first went into business probably the last thing on your mind was when you would close the door for the last time. But it’s important to know what’s involved when the time comes to close your business. We outline the steps to make the transition as smooth as possible. (December 2020) Read more
JobKeeper rules, conditions and payment rates have changed
Legislation has been put in place to extend the JobKeeper scheme beyond its original sunset date, although the rates of payment and certain other details have been altered. The scheme is now to run until March next year, with one version lasting until 3 January and another version in place from then until 28 March. (October 2020). Read more
New data matching programs initiated by Federal Government
The government has initiated two new data matching programs. Of these, one will look specifically at comparing information held by the ATO in relation to the JobKeeper payment and information reported to Services Australia’s “customers” in relation to social security payments. The other exchange of data involves comparing information held by the ATO in relation to Single Touch Payroll (STP) and Services Australia’s databases. (October 2020). Read more
SMSF regulations to allow six members under new legislation
A bill has been introduced into Parliament that partially implements a measure to allow an increase in the maximum number of allowable members in self-managed superannuation funds and small APRA funds from four to six. (October 2020). Read more
SMEs: ATO confirms JobKeeper payments do not contribute to aggregated turnover
From the outset, it has been emphasised that JobKeeper payments are assessable income. However some concerns had been raised as to JobKeeper payment status in regard to being statutory income or ordinary income. And if the latter, whether it is ordinary income derived in the ordinary course of carrying on a business. (October 2020). Read more
The JobKeeper scheme gets an update, plus an extension
The JobKeeper payment, which was originally due to end after 27 September, will now continue to be available to eligible businesses (including the self-employed) until 28 March 2021. However there are some changes to consider, one being that businesses will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover) from 28 September. (September 2020). Read more
Has your super fund got you covered for insurance? With COVID-19, maybe not
From 1 July 2019, the government adopted new rules that aim to prevent the unnecessary erosion of people’s retirement savings through inappropriate insurance arrangements. As such, super providers, excluding SMSFs and small APRA funds, are unable to provide insurance by default when an account has been inactive for more than 16 months, that is if the account has not received any contributions or rollovers for 16 months or longer. (September 2020) Read more
Rental property: Tax approach adjusts for COVID-19
The COVID-19 pandemic has placed property owners and tenants in unfamiliar territory, with many tenants currently paying reduced rent or ceased paying. While rental income may be reduced, owners will continue to incur normal expenses on their rental property and will still be able to claim these expenses in their tax return as long as the reduced rent charged is determined at arms’ length. (September 2020) Read more
Where you stand with vehicles and the boosted instant asset write off
The extension of the instant asset write-off from $30,000 to $150,000 until 31 December 2020 provides an opportunity to look at its application to motor vehicles. As with all assets that are eligible for the instant asset write-off, the vehicle must be first acquired between 2 April 2019 and 31 December 2020 and must be “used or installed ready for use” from 12 March 2020 to 31 December 2020. (September 2020) Read more
Tax return tips
Despite COVID-19 the procedures for completing and lodging tax returns remains pretty much the same. These days pre-filling takes care of a lot of the paperwork, and if you wait until late July or mid-August the ATO's systems will most likely be able to provide most of the information from employers, banks and other third parties. We outline the points to remember, what can and what can't be deducted. (July 2020) Read more
Instant asset write off extended to 31 December
Businesses with a turnover of up to $500 million a year will be allowed to continue writing off newly purchased assets worth up to $150,000. The extension gives businesses additional time to acquire and install new or second hand assets, and provided each costs less than $150,000, until the end of the calendar year. (July 2020) Read more
Varying PAYG instalments due to COVID-19
To assist taxpayers experiencing financial difficulty as a result of COVID-19, the ATO is providing flexibility to manage your expected tax liability on income from your business or investments for the current year by varying the amount or rate. Furthermore, if you vary your instalments it may be possible to claim a credit on instalments already paid. (July 2020) Read more
Last-minute tax planning tactics
The end of the financial year is almost here, but there are still strategies you can employ to make sure you pay the right amount of tax and maximise any refund entitlement. Proper tax planning is more than just sourcing bigger and better deductions. The best tips involve assessing your circumstances and planning your associated income and deductions. (June 2020) Read more
COVID-19 and residential rental property claims
Many residential rental property owners have had their rental income affected by COVID-19. As a result of this income year not being business as usual, the ATO has provided answers to some typical scenarios that may crop up in this area for tax time. (June 2020) Read more
Expatriates: Part-year resident or non-resident for tax purposes?
What happens from a tax point of view if you left Australia part-way through the income year? Primarily it depends on whether you ceased to be a “resident of Australia” at the time you left, the precise facts and your intentions. (June 2020) Read more
Concerns on property development and SMSFs
There has been an increase in the number of SMSF trustees entering into arrangements involving buying and then developing property that is subsequently sold or leased. SMSF trustees should be aware that the ATO is taking an active interest in this activity and has provided some guidance. (June 2020) Read more
Bankruptcy laws changed to cope with COVID-19
Temporary changes to bankruptcy law have been made to protect people who are facing unmanageable debt as a result of COVID-19. If you are in financial difficulty, application can be made for temporary debt protection, preventing recovery action by unsecured creditors, for six months. (June 2020) Read more
Answers to COVID-19 work-from-home expenses questions
Have you been forced to work from home over the COVID-19 period? Get the facts on what can and can’t be claimed, and how to calculate these. Or perhaps you have concerns about any consequent CGT issues when later selling a property from which people have been coerced to work from during this time. We answer your questions. (May 202) Read more
Your business & the JobKeeper scheme
There has been much discussion in the media about the JobKeeper Payment scheme, which is intended to support businesses that are financially affected by COVID-19 to help keep their staff employed. So how does it work, what’s the eligibility criteria and how do you enrol? (May 2020) Read more
COVID-19 instant asset write off & accelerated depreciation
While many of the COVID-19 payment-related stimulus changes have dominated the deadlines, it’s important that business don’t overlook the significance of the $150,000 instant asset write off provisions. From 1 July 2020, the instant asset write-off threshold will revert to its original level of $1,000. (May 2020) Read more
Early release from super a relief, but comes with risks
To help deal with the adverse economic effects of COVID-19 the government is allowing the early release of superannuation for individuals, and a temporary reduction in minimum pension drawdown rates for retirees. However, many economists say taking money out early should be done only as a last resort. (May 2020) Read more
Government's Stimulus Package
We explain the Government's Economic Stimulus Package as we attempt to survive the ever changing restrictions we are faced with. Click to download the PDF for a broad summary, such as Income Support for Individuals - Tax-free payments, early access to super, reducing minimum drawdowns for super pensions, social security deeming rates; and Cash flow assistance for businesses - Stage 1 Payment, Stage 2 Payment, Small & Medium Business Entities, Accelerated depreciation deductions. Download PDF
Borrowing for Immediate Cash Flow Needs
The Government, Reserve Bank and APRA have introduced a Coronavirus small to medium enterprises (SME) Guarantee Scheme which will provide a guarantee of 50% to SME lenders to support new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending, and assist otherwise viable businesses across the economy who are facing significant challenges due to disrupted cash flow to meet existing obligations. Download the Fact Sheet - Supporting the Flow of Credit
Support Packages being offered by Lenders
Many banks have recently announced COVID-19 support packages that provide affected borrowers with an option to defer their repayments for a period of up to six months. These packages have mainly been offered to small business, investment property loans and home loan customers, including chattel mortgages, hire purchase contracts, etc. If a deferral is required, this can be obtained online through your Internet Banking or by contacting your Bank directly.
Australian Workplace Laws
For up to date information on Employer/Employee obligations regarding entitlements for workers who need to have time off, want to or are directed to work from home, or are being stood down or terminated, please follow the link to the Fairwork Site
Accounting Client Newsletter
APRIL 2020 - The overwhelming issue in recent weeks has of course been the coronavirus. The government's stimulus package launched in response to the crisis is welcome.
In this issue we spell out what this means for different taxpayers, and how the measures will work:
- The COVID-19 Stimulus & rescue packages
- JobKeeper payments
- Instant asset write-off
- Accelerated depreciation incentive for businesses with less than $500m turnover per year to invest in plant & equipment and other depreciating assets
- The cash flow boost which provides for payments to support employers by boosting their cash flow
- The early release of superannuation, and superannuation drawdowns
- The superannuation guarantee (SGC) amnesty for missed super payments. What are the benefits and who is eligible?
Disclaimer
All Client Newsletter Library material is of a general nature only and is not personal financial or investment advice. It does not take into account one individual’s particular objectives and circumstances. No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional adviser. To the fullest extent permitted by law, no person involved in producing, distributing or providing the information through this service (including Tax & Super Australia Incorporated, each of its directors, councillors, employees and contractors and the editors or authors of the information) will be liable in any way for any loss or damage suffered by any person through the use of or access to this information.