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ABN ‘intent to cancel’ program

The ATO is reviewing Australian business numbers (‘ABNs’) to identify potentially inactive ABNs for cancellation, and it has introduced a new automated process to allow taxpayers (or their tax agents) to confirm if their ABN is still required via a secure voice response system.

An ABN may be selected if the taxpayer has not reported business activity in their tax return, or there are no signs of business activity in other lodgments or third-party information.

The ATO reminds taxpayers that any income earned under an ABN needs to be reported in their tax return, regardless of the amount.  By keeping their tax obligations up to date, the ATO can see they are actively undertaking a business (so, therefore, their ABN should not be cancelled).

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Super is now following new employees

The ATO is reminding employers that, as of 1 November 2021, there is an extra step they may need to take to comply with the choice of super fund rules.

If a new employee does not choose a super fund, most employers will need to request the employee’s ‘stapled super fund’ details from the ATO to avoid penalties.

A stapled super fund is an existing super account which is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.

When a new employee starts, employers need to:

  • offer eligible employees a choice of super fund;
  • if the new employee does not choose a super fund, the employer will need to request stapled super fund details using Online services for business; and
  • pay super contributions into one of the following:
    •   the super fund they choose;
    •   the stapled super fund the ATO provides if they have not chosen a fund; or
    •   the employer’s default fund (or another fund that meets the choice of fund rules) if the employer cannot pay into the two above.
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Government payments data-matching program

The ATO will acquire government payments data from government entities who administer government programs for 2017/18 to 2022/23 financial years.

The data items include:

  • service provider identification details (names, addresses, phone numbers, email, dates of birth, service type, ABN, ACN); and
  • payment details (service provider ID, name of service, type of service linked to program, value of payments received for the financial year, count and type of claim, withholding and re-credit amount).

The ATO estimates that records relating to approximately 36,000 service providers will be obtained each financial year (including approximately 11,000 individuals each financial year).

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AUSTRAC transaction report information data-matching program

The ATO will acquire transaction report information data from AUSTRAC for the period of 17 June 2021 through to 30 June 2027.

Editor: AUSTRAC (the Australian Transaction Reports and Analysis Centre) is the Australian Government agency responsible for “detecting, deterring and disrupting criminal abuse of the financial system to protect the community from serious and organised crime”.

The data elements made available to the ATO will depend on what is captured in the reporting process and can include identifying information of customers and institutions facilitating transactions, identifiers such as ABNs, ACNs and Australian Financial Services Licence details, and transaction details (including transaction type, accounts, instruments, amounts and currency).

The ATO estimates that records relating to approximately nine million individuals will be obtained each financial year.

The data will be acquired and matched to ATO data to support the administration and enforcement of tax and superannuation laws, including registration, lodgment, reporting and payment responsibilities.

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Permanent changes to AGMs and electronic communications

The Government has introduced into Parliament a Bill to permanently allow companies to use technology to meet their regulatory requirements, and ensure that companies can continue to meet their obligations amid the uncertainty of the COVID‑19 pandemic.

Editor: These reforms build on the recently renewed temporary relief, which we reported in September 2021, and which will remain in place until 31 March 2022.

Specifically, the new permanent reforms will:

  • ensure that meetings can be held physically, as a hybrid, or (if expressly permitted by the entity’s constitution) virtually, provided that members, as a whole, are given reasonable opportunity to participate in the meeting;
  • ensure that companies (and registered schemes) can meet their obligations to send documents in hardcopy or softcopy, and give members the flexibility to receive documents in their preferred format; and
  • allow documents, including deeds, to be validly executed in technology neutral and flexible manners, including by company agents.
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Varying PAYG instalments due to COVID-19

Taxpayers can vary their pay as you go (‘PAYG’) instalments throughout the year if they think they will pay too much, compared with their estimated tax for the year.

To assist taxpayers who continue to be affected by COVID-19, the ATO has stated that it will not apply penalties or interest on varied instalments for the 2021/22 income year for excessive variations when the taxpayer has taken reasonable care to estimate its end of year tax.

The ATO says this means making a reasonable and genuine attempt to determine the tax liability.  When considering if a genuine attempt has been made, the ATO takes into account what a reasonable person would have done in the same circumstances.

Note that variations do not carry over into the new income year.

Therefore, if a taxpayer made variations in the 2020/21 income year, they may need to vary again in 2021/22.  The varied amount or rate will apply for all of the remaining instalments for the income year, or until the taxpayer makes another variation.

The ATO encourages taxpayers to review their tax position regularly and vary their PAYG instalments as their situation changes.

If a taxpayer realises they have made a mistake working out their PAYG instalment, they can correct it by lodging a revised activity statement or varying a subsequent instalment.

If a taxpayer is unable to pay an instalment amount, they should still lodge their instalment notice and discuss a payment arrangement with the ATO to ensure they will not have a debt at the end of the year.

Editor: Contact our office if you need help with any PAYG (or any related) issues.

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Preparing for the new Director ID regime

As part of its Digital Business Plan, the Government announced the full implementation of the ‘Modernising Business Registers’ program.

This included recently enacted legislation introducing the new director identification number (‘director ID’) regime.

The director ID is a unique identifier that a director will need to apply for once and will keep forever.

The introduction of director IDs is intended to create a fairer business environment by helping prevent the use of false and fraudulent director identities, which “will go a long way to better identifying and eliminating director involvement in unlawful activity”.

Editor: Note that all directors will need to apply for a director ID, including directors of corporate trustees of self-managed super funds (‘SMSFs’) and of family trusts.

Individuals will be able to apply for a director ID from 1 November 2021 on the new Australian Business Registry Services (‘ABRS’) website (at abrs.gov.au) and will need to log in using the myGovID app (set to a ‘Standard’ or ‘Strong’ identity strength).

When an individual must apply for a director ID depends on the date they became a director.  For directors under the Corporations Act:

  • who became a director on or before 31 October 2021, they must apply for a director ID by 30 November 2022;
  • who become a director between 1 November 2021 and 4 April 2022, they must apply for a director ID within 28 days of appointment; and
  • who become a director from 5 April 2022, they must apply for a director ID before their appointment.

Individuals will need to apply for their director ID themselves to verify their identity (i.e., no one can apply for it on their behalf, including agents).

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Super choice rules will change from 1 November

You’ll have an extra step to take if you have new employees who start from 1 November 2021 and they don’t choose a super fund.

You may now need to request their ‘stapled super fund’ details from the ATO.

A stapled super fund is an existing super account of an employee that follows them as they change jobs.

This change aims to stop your new employees paying extra account fees for unintended super accounts set up when they start a new job.

What you need to know

You may need to request stapled super fund details when:

  • your new employee starts on or after 1 November 2021
  • you need to make super guarantee payments for that employee, and
  • your employee is eligible to choose a super fund but doesn’t

You may still need to request stapled super fund details for some employees even though you don’t need to offer them a choice of super fund. This includes if your employees are temporary residents or they’re covered by an Enterprise Agreement or Workplace Determination made before 1 January 2021.

You and your representatives can request stapled super fund details for your employees if you have full access to Online services for business. You need to review and update these accesses to protect the privacy and safety of your employees’ personal information.

You must meet your choice of super fund requirements and any stapled super fund obligations by the quarterly due date or you may face penalties.

What you need to do from 1 November 2021

Step 1: Offer your eligible employees a choice of super fund

You need to give your eligible new employees a Super standard choice form and pay their super into the account they tell you on the form. Most employees are eligible to choose what fund their super goes into.

There is no change to this step of your super obligations.

Step 2: Request stapled super fund details

If your employee doesn’t choose a super fund, you may need to log into our Online services and go to ‘Employee Super Accounts’ to request their stapled super fund details. Your agent or other tax professional can do this for you.

The ATO will provide your employee’s stapled super fund details after they have confirmed that you are their employer.

If the ATO provides a stapled super fund result for your employee, you must pay your employee’s super using the stapled super fund details the ATO provided you.

Step 3: Pay super into a default fund

You can pay into a default fund, or another fund that meets the choice of fund obligations if:

  • your employee doesn’t choose a super fund, and
  • we have advised you that they don’t have a stapled super fund.
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Time running out to register for the JobMaker Hiring Credit

The JobMaker Hiring Credit scheme’s third claim period is now open, so if a taxpayer has taken on additional eligible employees since 7 October 2020, they may be able to claim JobMaker Hiring Credit payments for their business.

Eligible businesses can receive up to:

  • $10,400 over a year for each additional eligible employee hired aged 16 to 29 years; and
  • $5,200 over a year for each additional eligible employee hired aged 30 to 35 years.

The JobMaker Hiring Credit is available to businesses for each additional eligible employee hired before 6 October 2021, so, if a business is thinking about taking on extra staff, they should check if they are eligible to participate in the scheme.

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Travel allowances and ‘LAFHAs’

The ATO has released a Ruling explaining:

  • when an employee can deduct accommodation and food and drink expenses when travelling on work;
  • the FBT implications, including the application of the ‘otherwise deductible rule’, where an employee is reimbursed for accommodation and food and drink expenses, or where the employer provides or pays for these expenses; and
  • the criteria for determining whether an allowance is a ‘travel allowance’ or a ‘living-away-from-home allowance’ (‘LAFHA’) benefit.

Whether accommodation and food and drink expenses are deductible depends on the facts and circumstances of each case, so the Ruling uses examples to show how to determine the deductibility of these expenses in a range of situations.