The ATO has advised it is in the process of shifting from its previous engagement and communication focus on Single Touch Payroll (‘STP’). In particular, it will begin a ‘failure to lodge penalty’ process for small business employers (i.e., those with 19 or fewer employers) who have yet to commence STP reporting.
STP reporting has been mandatory for most small employers from the 2020 income year, with a final ‘nudge letter’ being issued to approximately 700 small employers in late January 2022.
Notably, the ATO advised that any remaining non-compliant small employers (i.e., those not subject to any appropriate reporting extensions or exemptions) will have been issued pre-penalty warning letters from 18 February 2022.
Where an employer receives a pre-penalty warning letter, they will have a further 28 days to take action by either starting to lodge or contacting the ATO before a failure to lodge penalty will be imposed.
Editor: Should you have any questions (or require any assistance) about any of the issues raised in this update, please feel free to contact our office.
Small businesses are to be afforded the ability to apply to the Small Business Taxation Division of the Administrative Appeals Tribunal (‘the Tribunal’) for orders to stay (i.e., temporarily suspend) specific ATO debt recovery actions. Broadly, amending legislation will allow the Tribunal to make such an order only if the proceeding is brought under the Small Business Taxation Division of the Tribunal.
This proposal (initially announced in the most recent Federal Budget) aims to provide small business entities (‘SBEs’) with a cheaper and easier way to pause the effects of an ATO decision to recover a tax debt whilst their tax dispute is being considered.
As announced in the 2020/2021 Federal Budget, legislation has now passed to allow eligible corporate entities (i.e., with, amongst other things, an aggregated turnover of less than $5 billion) a 12-month extension to claim a loss carry-back tax offset in the 2023 income year.
The temporary loss carry-back rules were initially implemented in 2020 to promote economic recovery by providing cash flow support to previously profitable companies that fell into a tax loss position due to the COVID-19 pandemic.
The law allows eligible companies to carry-back tax losses from 2020, 2021, 2022 and now the 2023 income year to previously-taxed profits in the 2019 or later income years.
A company that does not elect to carry back losses under this temporary (yet extended) measure is still eligible to carry losses forward as usual.
A plethora of superannuation law tweaks has recently been made (via recent legislative reforms) which include:
- Removing the $450 monthly super guarantee threshold.
- Reducing the eligibility age for making downsizer contributions from 65 to 60.
- Changes to facilitate the removal of the work test for those aged between 67 and 75 regarding non-concessional and salary sacrificed contributions. In addition, the bring-forward rule will now be available for people under the age of 75 (rather than 67, as is currently the case).
- Increasing the maximum releasable amount under the First Home Super Saver scheme from $30,000 to $50,000.
- Allowing super fund trustees to choose not to use the segregated assets method in certain circumstances.
Furthermore, the Government has also ‘made good’ on their promise to extend accelerated depreciation with legislation passing to allow current Temporary Full Expensing measures to continue for another 12 months (i.e., to 30 June 2023).
After much speculation, the Government announced that COVID-19 tests, including Polymerase Chain Reaction (‘PCR’) and Rapid Antigen Tests (‘RATs’), will be both:
- tax-deductible; and
- exempt from FBT;
broadly where they are purchased for work-related purposes.
This will require the introduction of new specific legislation (i.e., to clarify that work-related COVID- 19 test expenses incurred by individuals will be tax-deductible or FBT exempt where employers provide the tests to their staff) which will apply both where an individual is required to attend the workplace or has the option to work remotely.
The Government intends that these changes take effect from the beginning of the 2022 income year and will apply permanently once enacted.
Small businesses in the eligible defined areas listed below who were directly impacted by the recent South East Queensland Rainfall and Flooding, 22 February – 7 March 2022 may now apply for Extraordinary Disaster Assistance Recovery Grants of up to $50,000.
Applications close 5 September 2022.
The maximum total grant amount is $50,000 and is available through two separate applications, where eligibility criteria applies:
- An initial amount of up to $15,000 is available to support an initial claim with evidence of the direct damage including:
o tax invoices
o official receipts.
- A subsequent amount of up to $35,000 is available to support subsequent applications for which full evidence of payment is required.
Eligible clean-up, reinstatement activities and emergency measures include:
- Equipment and materials to undertake clean-up
- Additional labour costs (above and beyond normal wage expenditure i.e. day-to-day staffing)
- Disposing of damaged goods and stock, including associated costs
- Repairs to buildings (other than housing)
- Purchase or hire/ lease costs for equipment essential to the immediate resumption of the business
- Payment for tradespeople to conduct safety inspections
- Essential repairs to premises and internal fittings that is not covered by insurance
- Replacement of lost or damaged stock if the replacement is essential for immediately resuming operations
- Leasing temporary premises for the purpose of resuming operation.
An applicant is not eligible for assistance under the scheme:
- for repairs to a building the applicant lets to a person for residential or commercial purposes, unless the applicant lets the property in the course of operating a business (superannuation funds and personal investment vehicles are not regarded as businesses); or
- if the small business is entitled to receive an amount under a policy of insurance for the relevant costs claimed; or
- for loss of income as a result of the eligible disaster.
Defined disaster areas: to be eligible for assistance your business must be located in one of the following areas:
- Brisbane City Council
- Fraser Coast Regional Council
- Gladstone Regional Council
- Gold Coast City Council
- Goondiwindi Regional Council
- Gympie Regional Council
- Ipswich City Council
- Lockyer Valley Regional Council
- Logan City Council
- Moreton Bay Regional Council
- Noosa Shire Council
- North Burnett Regional Council
- Redland City Council
- Scenic Rim Regional Council
- Somerset Regional Council
- South Burnett Regional Council
- Southern Downs Regional Council
- Sunshine Coast Regional Council
- Toowoomba Regional Council
How to apply
Visit the QRIDA website to read the full guidelines, eligibility criteria and what documents you need to have ready to apply. Applications close 5 September 2022.
Ensure you’re using the latest Google Chrome browser on a desktop or laptop when submitting your application.
To start your online application through the QRIDA portal click the ‘Apply online’ button below.
If you have already applied for assistance from QRIDA please have your QRIDA Client ID Number ready to apply. You can find it on any formal correspondence you have received from QRIDA including emails relating to an outcome of a decision.
The ATO has advised it will acquire Medicare Exemption Statement (‘MES’) data relating to approximately 100,000 individuals from Services Australia for the 2021 financial year through to the 2023 financial year inclusively, and compare it with claims made by taxpayers on their tax returns.
The ATO has issued a reminder to businesses that paying regular attention to their record-keeping and reporting tasks will help them better manage their cash flow and allow them to plan for the future.
The best way to make sure a business has enough cash available to meet its tax and other obligations is to do a cash flow budget or projection. This information will help the business to:
- see its likely cash position at any time;
- identify any fluctuations that may lead to potential cash shortages;
- plan for tax payments;
- plan for any major expenses; and
- provide lenders with information.
Accounting for income and expenses can help keep a business running smoothly — by giving it an overview of when it can expect money to come in and when it may go out, and highlighting where the business may need to direct its money.
The ATO provides resources about record keeping for business, and there is also information on business.gov.au regarding how to create a budget, and how to improve a business’s financial position.
Scamwatch is warning that scams cost Australian consumers, businesses and the economy hundreds of millions of dollars each year and cause serious emotional harm to victims and their families.
Cryptocurrency scams are the most ‘popular’ type of investment scams, representing over 50% of losses. Often the initial investment amount is low (between $250 and $500), but the scammers pressure the person to invest more over time before claiming the money is gone or ceasing communication and blocking access to the funds.
All age groups are losing money to investment scams, but the over-65s have lost the most, with $24 million lost this year.
Some simple steps individuals can take to protect themselves (and their businesses) are:
- Never give any personal information to someone who has contacted you.
- Hang up and verify the identity of the person contacting you by calling the relevant organisation directly — find them through an independent source such as a phone book, past bill or online search.
- Do not click on hyperlinks in text/social media messages or emails, even if it appears to come from a trusted source.
- Go directly to a website through a browser (e.g., to reach the MyGov website, type ‘my.gov.au’ into the browser).
- Search for reviews before purchasing from unfamiliar online traders.
- Be wary of sellers requesting unusual payment methods.
- Verify any request to change bank details by contacting the supplier directly.
- Consider a multi-factor approval process for transactions over a certain dollar amount.
- Never provide a stranger remote access to your computer, even if they claim to be from a telco company such as Telstra.
Editor: Feel free to contact our office if you need any help at all with this or anything else.
The High Court has held that the ‘working holiday maker tax’ (also known as the ‘backpackers tax’) did not apply to a taxpayer on a working holiday visa from the United Kingdom who was also an Australian tax resident, due to the application of the Double Tax Agreement between Australia and the United Kingdom.
The ATO has responded to this High Court decision, noting that it is only relevant where a working holiday maker is both an Australian resident for tax purposes and from Chile, Finland, Japan, Norway, Turkey, the United Kingdom, Germany or Israel.
Working holiday makers who may potentially be affected by this decision are encouraged to check the ATO website for updated guidance prior to lodging or amending a return or lodging an objection.
Employers should continue to follow rates in the published withholding tables for working holiday makers until the ATO updates its website with further guidance.
The ATO notes that a working holiday maker’s residency status for tax purposes is determined by the taxpayer’s individual circumstances, but most working holiday makers will be non-residents (consistent with their purpose of being in Australia to have a holiday and working to support that holiday).