ATO news archives | Patane Accounting

ATO news archives

Below is a list of past ATO news:

Tax Time 2026: Key Changes Summary

Individuals

Work & Sharing Economy Claims – Heightened data matching on home office, vehicle expenses, short-term rentals, ride sourcing and digital platform earnings.
Foreign Income – Automated cross-border data tracking (CRS/AUSTRAC) targeting unreported worldwide income and foreign assets.
Car Related Expenses – rate has been increased to 91c per km.
Integrity Rules – Strict enforcement of s207-159 (unfranked dividends funded by capital raising) and anti-dividend washing rules.
Trust Distributions – Individuals receiving trust distributions MUST complete and attach the standalone Trust Income Schedule.

Companies

Form Layout – No new or removed labels on the main Company Tax Return 2026 form.
Compliance Focus: Active ATO monitoring of corporate tax transparency, cross-border payments, crypto assets and novated vehicle fringe benefits.

Partnerships, Trusts & Managed Entities

Trust Return – Added Labels B1 (Non-PP MIS amount), U2 (Franked distribution – investment amount) and H1 (Other foreign source investment amount). Removed Labels G (Other refundable tax offsets) and M (Exploration credits distributed).
Partnership Return – Item 54 Label M (Junior Mineral Exploration Incentive) removed.
AMIT/CCIVs – SBR software includes a compulsory check for Reportable Tax Position (RTP) schedule requirements.

Self-Managed Super Funds (SMSFs)

Contributions & Balance Caps – Updated threshold alignment for indexing concessional/non-concessional caps and the Transfer Balance Cap.
Asset Tracking – Heightened reporting accuracy required for non-standard assets, crypto holdings and foreign real estate investments.

To stay updated on the latest ATO tax developments, you can check the official ATO website for the full breakdown of their summary, or contact our office.

Fuel Tax Credit Rates

Businesses must use the rate applicable on the date the fuel was acquired. Rates may vary depending on whether the fuel is used in heavy vehicles traveling on public roads versus other business uses.

Rate Summary Table (1 July 2026 to 2 August 2026):

Eligible fuel type	Used in Heavy Vehicles (Travelling on public roads)	All Other Business Uses (Including auxiliary equipment)
Liquid fuels (diesel, petrol) Unit: cents per litre	20.2	36.6
Blended fuels (B5, B20, E10) Unit: cents per litre	20.2	36.6
Blended fuel: (E85) Unit: cents per litre	0	15.690
Liquefied petroleum gas (LPG) Unit: cents per litre	0	12.0
Liquefied natural gas (LNG) or compressed natural gas (CNG) Unit: cents per kilogram	3.2	25.1
B100 Unit: cents per litre	0	13.4

Use the fuel tax credit calculator to easily work out the amount to report on your business activity statement (BAS).

Key Notes:

Passenger Air-Conditioning: For heavy vehicles on public roads, the rate has included fuel to used to power passenger air-conditioning in buses and coaches since 1 November 2019.
Packaging/Supplying: Claims for packaging or supplying fuel can apply the “all other business uses” rate.
Road user Charge: From 1 July to 2 August 2026, the road user charge is set at 16.4 cents per litre for liquid fuels and 21.9 cents per kilogram for gaseous fuel (reducing the credit rate for heavy vehicles on public roads).

For more information, visit the official ATO website: Fuel tax credit rates have changed

Qualifying earnings: a new way of calculating super

Employers will switch from Ordinary Time Earnings (OTE) to Qualifying Earnings (OE) to calculate superannuation contributions starting 1 July 2026. This operational shift underpins the broader move to Payday Super.

Key Takeaways:

Employer Timeline: Contributions must reach super funds within 7 business days of payday.

Fund Timeline: Super funds will have only 3 business (reduced from 20 days) to allocate or return contributions.

Operational Shift: Funds will experience increased reporting frequency, higher transaction volumes, and a broader range of earnings types used for calculations.

STP Alignment: There will be a much closer alignment between reported earnings and paid contributions through Single Touch Payroll (STP), requiring high data quality and precise member matching.

Preparation: Organisations must review their system readiness, reconciliation processes, and allocation workflows before the 1 Jule deadline.

Understanding these changes is essential because the shift to Qualifying Earnings and tighter payment windows fundamentally alters payroll processing and cash flow management. Failing to adapt systems in time risks non-compliance with the new Single Touch Payroll and super fund data standards. Proactive preparation ensures a seamless transition and protects your organisation from processing delays or errors.

For more information, visit the official ATO website: Qualifying earnings: a new way of calculating super
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ATO app perks and features

The ATO app is a secure, free tool designed for individuals and sole traders to manage their tax and super on the go. To get the full benefit, users should link their myGov account and register their device for enhanced security.

Key features include:

2024-25 Tax returns: Track your return from lodgement to outcome, check pre-fill data, and view your notice of assessment.
myDeductions: Capture and organise tax records, receipts, and deductions. Data can be uploaded to pre-fill your return or emailed to an agent.
Super Management: View all super accounts including lost or ATO-held super and consolidate eligible accounts.
Account Controls: Set up “Quick login” (Face/Fingerprint ID), receive real-time security alerts for account changes, and use the “Account lock” feature if you suspect fraud.
Business Tools: Includes ABN Lookup, a Tax withheld calculator, and a business performance check for a small business benchmarking.

If you haven’t already downloaded the ATO app for your personal tax and super affairs, we encourage you to do so, register your device and use the new “Verify call” feature. You’ll also benefit from a range of other features and tools that will help you keep on top of your personal tax and super.

For more information, visit the official ATO website: ATO app ‘Verify call’ – yes, it’s really the ATO

Providing work vehicles or perks to staff

If you provide employees with non-cash benefits, such as work vehicles, parking, or other perks, you may need to pay Fringe Benefits Tax (FBT). These benefits are in addition to salary and can also apply when provided to employees’ family members or associates.

Key things to know:

FBT generally applies when a benefit is available for private use, even if it is not actually used
Work vehicles are a common example where private use includes commuting or taking the vehicle home
Some exemptions may apply (e.g. limited private use of certain commercial vehicles or minor benefits)

Your obligations:

Correctly identify and value fringe benefits
Keep accurate records (e.g. logbooks for vehicle use)
Lodge FBT returns and pay any tax owed on time

Providing perks can attract tax obligations, so it is important to understand FBT rules, track usage, and ensure compliance to avoid penalties. For more information on FBT obligations, please contact our office.

ATO Reminder – Simple Steps to Avoid Compliance Action

The Australian Taxation Office (ATO) is encouraging small businesses to take simple steps to stay on top of their tax obligations and avoid compliance action. Many tax issues occur due to common mistakes such as poor record-keeping, unreported income, or falling behind on tax payments.

The ATO advises that developing good financial habits and seeking professional advice early can help businesses remain compliant and avoid unnecessary penalties.

Small businesses can reduce the risk of compliance issues by taking practical steps such as:

Staying on top of tax debts and contacting the ATO early if you are unable to pay on time
Setting aside funds for GST and PAYG withholding to avoid cash flow issues at BAS time
Keeping accurate and complete records of all business income and expenses
Using digital accounting tools instead of manual or paper-based record keeping
Setting reminders for lodgement due dates to avoid late lodgement penalties

Businesses should also prepare for Payday Super, which will require employers to pay employees’ super guarantee at the same time as each pay cycle from 1 July 2026. Reviewing payroll systems and processes now can help businesses prepare for this change.

Our team can help review your tax obligations, ensure your records are compliant, and assist with lodgements to help you stay on track with ATO requirements, please contact our office.

Business expenses: Know what you can (and can’t) claim

Tax time is nearly over and managing your business finances effectively begins with knowing which expenses are deductible, and which ones are not.

ATO’s three golden rules, must be met to ensure business expenses are claimable for a tax deduction:

The expense must be for business use, not for private use
If the expense is for a mix of business and private use, you can only claim the portion that is used for business
You must have records to prove your claim

For tailored advice regarding your tax needs, please contact our office. Otherwise, further information is available on the ATO website.

Guidance on ATO interest denial

The ATO has developed additional guidance on ATO interest denial from 1 July 2025, as a result of the issues CPA Australia raised and tabled at the National Tax Liaison Group meeting.

Key topics and examples include:

the effect of the law change
when GIC and SIC are considered incurred with reference to a range of examples
implications for taxpayers with substituted accounting periods
the assessability of remitted GIC and SIC amounts
deductibility of interest on borrowings used to pay tax liabilities

For further information on ATO interest, visit the ATO website.

More time to amend business income tax returns

Businesses with an annual aggregated turnover of less than $50 million now have up to 4 years from the date of their tax assessment to request amendments, without the need to lodge an out-of-time objection request. This applies to returns for the 2024-25 and later income years. Amendment requests should be lodged well before the end of the amendment period to ensure the Australian Taxation Office (ATO) can process them within the time limit.

If you want to amend a tax return after the time limit has passed, you can’t request an amendment but you can lodge an objection. You will need to include a request for an extension of time together with the objection.

For further information visit the ATO website

Changes to deductibility of interest on ATO debts

With changes to the deductibility of general interest charges (GIC) applying from 1 July, now is a good time to support your clients in addressing their overdue ATO debts. GIC applies to unpaid tax debts at the current rate of 11.17%. Your guidance can help businesses manage their cash flow by setting aside funds to address GST, pay as you go withholding, super or other tax obligations.

For further information, visit the ATO website

Student debt indexation factor: 2025 notice registered

The ATO has registered the notice announcing the indexation factor for student debt (HELP, ASSL and Financial Supplement debt) for 1 June 2025 is 1.032, being the lower of the Consumer Price Index (CPI) indexation factor and the Wage Price Index (WPI) indexation factor. The effective percentage increase is 3.2%.

For further information, read the notice

Working from home – 70c/hour fixed rate deduction update

The has ATO updated PCG 2023/1 to set a new rate (using the fixed-rate method) for calculating the work-related additional running expenses incurred because of working from home. From 1 July 2024 the rate is 70 cents per hour. It was previously 67 cents per hour. Alternatively, taxpayers can continue to claim their actual expenses.

More information on current working from home deduction can be found via the ATO website contact our office at 9721 1055.

ATO shifts to monthly GST for non-compliant small businesses

The ATO has announced that from 1 April 2025, it will be moving 3,500 small businesses from quarterly to monthly GST reporting – those with a history of non-payment, late or non lodgment, or incorrect reporting to improve their compliance.

Changes to reporting cycles will remain in place for a minimum of 12 months as part of the ATO’s ‘Getting it right’ campaign.

The ATO will contact small businesses and their tax professionals when their GST reporting cycle is changed from quarterly to monthly.

More information regarding monthly GST reporting can be found via the ATO website

ATO unsuccessful in appeal on Bendel – UPE not a loan for Division 7A

The Full Federal Court (FFC) has decided in Bendel’s case that an unpaid present entitlement (UPE) to a company does not constitute a loan for Division 7A. The FFC has concluded that 109D(3) which contains the definition of “loan” for the purpose of Div 7A, requires more than the existence of a debtor-creditor relationship. It requires an obligation to repay and not merely an obligation to pay.

“Division 7A is an anti-avoidance provision directed at in substance distributions of private company profits. It operates according to its terms. By the terms of Subdiv EA where company profits referable to a UPE make their way to a taxpayer who is subject to tax at personal rates, there is a deemed distribution to that taxpayer and the benefit of the corporate tax rate is lost. That was the mischief perceived by the legislature… The legislature did not perceive a mischief in respect of UPEs in the way that the Commissioner now perceives.”

Therefore, the decision rejects the current ATO views relating to private company entitlements to trust income, as set out in Taxation Determination TD 2022/11. (Commissioner of Taxation v Bendel [2025] FCAFC 15, Logan, Hespe and Neskovcin JJ, 19 February 2025.)

More information on trust entitlements can be found via the ATO website

Rental bond data-matching program

The ATO will acquire rental bond data on around 2.2 million individuals each financial year from rental bond regulators bi-annually for the 2023–24 through to the 2025–26 financial years.

The objectives of the Property management data-matching program are to:

identify and educate individuals and businesses who may be failing to meet their registration or lodgment obligations and help them:
- lodge their income tax returns
- correctly report assessable income from a rental property in their individual income tax return
- correctly report associated rental deductions in their individual income tax return
- comply with capital gains tax obligations for properties used to derive rental income
gain insights to help develop and implement strategies, which may include educational or compliance activities for individuals and businesses who lease or let real property
promote voluntary compliance and increase community confidence in the integrity of the tax and super systems.

More information can be found via the ATO

Introducing myID (formerly myGovID)

The Australian Government’s Digital ID app is now known as myID (formerly myGovID). It has a new name and look – but how you use it is the same.

There’s nothing you need to do. You still have:

The same details: there’s no need to set up a new myID. Your login details (including email address) and identity strength remain the same.
Continued use:your existing app should have automatically updated – if not, you can manually update it from the App Store or Google Play.
Access to services: you can continue to access the services you used with your myGovID. When logging into an online service, you may now need to select myID as your identity provider.

While the transition is in progress, you may see references to both myID and myGovID.

More information can be found here

90% of ATO tip offs deemed ‘suitable’ for further investigation

The ATO reported over 47,000 community tip-offs in 2023-24, mostly about tax avoidance in building, hospitality, and beauty services. Around 90% of these were suitable for further investigation. The ATO urges businesses in the shadow economy to consult a registered tax professional or contact the ATO to address their tax obligations.

The ATO estimates there is around $16 billion in stolen taxes because of businesses doing things like cash jobs each year. Businesses who have been operating in the shadow economy are encouraged to speak to their registered tax professional or the ATO to work to get it right.

More information can be found via the ATO media release

myGovID is changing its name to myID

Your myGovID app will soon automatically update to myID on your device. You won’t need to do anything.

It’ll have a new name and look, but you’ll continue to use it in the same way to access Online services for business.

The change to myID aims to reduce confusion between myGovID and myGov. The new name for the Australian Government’s Digital ID app reflects the community’s understanding of Digital ID and demonstrates how a whole-of-government ID provider can help protect Australians from identity theft and fraud.

Find out more via the Australian government website,

Three data-matching programs registered: ATO

The ATO has registered three data-matching notices on 26 August 2024 for compliance related purposes:

Notice of a lifestyle assets: The ATO will acquire lifestyle assets data from insurance providers for 2023-24 through to 2025-26 for specified classes of assets, where the relevant asset value is equal to or exceeds the nominated thresholds. The data items include client identification and policy details.
Notice of a Property management:The ATO will acquire property management data from property management software companies for 2018-19 through to 2025-26. The data items include property owner identification and property transaction details.
Notice of an Officeholder:The ATO will acquire officeholder data from ASIC, the ORIC, the ACNC, and ABRS for 2023-24 through to 2026-27. The data items include name, contact details, date of birth, ABN, organisation details, state of incorporation, officeholder type, including officeholder role start and end dates.

For more information on data matching protocols, visit the ATO website

Changes to self-education deductions claim label

From the 2023–24 income year, eligible deductions for work-related self-education expenses will be claimed at Label D4 – Self-education expenses.

Previously, formal education courses connected to work, were claimed at D5 – Other work-related expenses. These expenses now need to be included at Label D4 Category A.

For assistance in calculating these expenses, use the ATO calculator

Pitfalls for lodging tax early before “tax ready”

The ATO says taxpayers who lodge their tax return before their income statement is “tax ready” have a higher chance of mistakes and incomplete information.

From late July, most information from employers, banks, government agencies and health funds will be automatically loaded into a taxpayer’s tax return. Once a taxpayer’s information has been pre-filled and finalised by their employer, their income statement will be marked as “tax ready”.

For more information, visit the ATO website

No changes to instant asset write-off threshold or eligibility

The House of Reps has voted down proposed senate amendments to the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 which would have increased the amount of the instant asset write-off from $20,000 to $30,000 and broadened the concession’s eligibility to medium businesses, with an aggregated turnover of less than $50 million.

The bill was returned to the senate, who then voted against House of Reps decision. This means that the bill is still before the senate and the amendment is still “live”. The bill is in a political limbo, i.e. parliament in stand-off mode.

For more information on the instant asset write-off visit the ATO website

No Australian tax break for international posting

The AAT has affirmed that a taxpayer remained a “resident of Australia” as defined in section 6(1) of the ITAA 1936 for the duration of their international posting to the United Arab Emirates, pursuant to the ‘ordinary concepts’ and ‘domicile’ tests of Australian tax residency. In reaching its decision, the Tribunal considered the taxpayer’s numerous ties to Australia, including that the taxpayer:

continued to own and pay the costs associated with a family home where at least one of his daughters resided rent-free throughout the relevant income years;
would always use his leave periods to return to Australia to stay with his family in the family home (other than one leave period where the family holidayed outside Australia);
intended to return to Australia to retire after the expiration of his overseas posting;
had maintained vehicle registrations and his Australian drivers licence, which allowed him to seamlessly return to using his Australian vehicles whenever he returned to Australia;
held a visa and accommodation in the UAE which were tied to the length of his employment assignment;
had failed to demonstrate he had any connection to the UAE other than his employment; and
had maintained his Australian health insurance throughout the duration of his overseas posting.

As such, the AAT affirmed the relevant objection decisions under review.

For more information, view the Quy v Commissioner of Taxation [2024] AATA 245 case.

Depreciating assets – composite items

Ruling TR 2024/1, with retrospective effect, provides guidance and 14 examples on determining whether a composite item is itself a depreciating asset or whether the component parts are separate assets.

It sets out a series of “guiding principles”, including whether the item has a separate identifiable function, whether it performs a discrete function, the degree of physical or functional integration of the components, and whether multiple components are purchased as a system to function together as a whole.

Other issues considered include whether a modification or alteration to an existing depreciating asset can itself be a depreciating asset, intangible depreciating assets and jointly held tangible assets.

For more information, visit the ATO website

Fuel tax credits: are you eligible?

If your business uses fuel, you may be eligible for fuel tax credits.

Fuel tax credits are claimed by businesses for the fuel tax included in the price of fuel used in their business activities. You can claim for taxable fuel that you purchase, manufacture or import. Just make sure it’s used in your business.

You can claim for business activities in:

machinery
plant
equipment
heavy vehicles over 4.5 tonnes
light vehicles on private roads (not on public roads)

For information regarding Fuel Tax Credits visit the Business.gov website

Classifying workers as employees or contractors

Taxation Ruling TR 2023/4 explains when an individual is an “employee” for PAYG withholding purposes, while Practical Compliance Guideline PCG 2023/2, sets out the ATO’s compliance approach for businesses that engage workers and classify them as employees or independent contractors.

Date of Effect:

TR 2023/4 applies retrospectively
PCG 2023/2 applies from 6 December 2023

For more information on classifying workers, visit the ATO’s website

ATO’s lodgement penalty amnesty

Do you have overdue income tax returns, business activity statements or fringe benefits tax returns? Time is running out to take advantage of the Australian Taxation Office’s small business lodgment penalty amnesty. You only have until 31 December 2023 so get in quick.

When you lodge your eligible income tax returns, business activity statements and fringe benefit tax returns, failure to lodge penalties will be remitted without the need to apply.

To be eligible for the amnesty you must meet the following criteria:

Have had an annual turnover under $10 million when the original lodgment was due.
Have overdue income tax returns, BAS or FBT returns that were due between 1 December 2019 and 28 February 2022.
Lodge between 1 June and 31 December 2023.

The amnesty doesn’t apply to privately owned groups, or individuals controlling over $5 million of net wealth.

Ato.gov.au is being updated – find out what’s changing and when

Get ready for a better website experience with ato.gov.au in November.

Our updated website features improved search functionality, more streamlined navigation and refreshed design. This is the result of extensive consultation and feedback from you.
We’re excited to offer you a better website experience. Get ready to discover a more user-friendly website that will simplify your interactions with us.

More information describing this program is available from the ATO.

How to keep your myGovID secure

Your myGovID is unique to you and gives you access to a range of government online services such as Workforce Australia for Business.

It’s important that you take steps to protect it and your personal information to ensure security.

If you have upgraded your mobile device recently, you will need to set up your myGovID again and re-verify your identity. Find out how to keep access to your myGovID.

Visit myGov to learn more about their security, and for more business information, visit Workforce Australia..

Claiming a deduction for digital product expense

The ATO has released further information for business owners in working out what tax deductions they can claim for the cost of digital products used in their business.

This includes what expenses you can claim:

small business technology investment boost
operating expenses; capital expenses;
software expenses;
calculating your claim;
records you need to keep and examples

For more queries, visit the ATO website.

Tips on getting STP Phase 2 Reporting right

The ATO have seen some mistakes as employers have moved to STP Phase 2 Reporting. Most common mistakes:

Pay codes are setup correctly and that payments including allowances, paid leave and overtime are listed separately.
Employee details such as an employee’s name, TFN and date of birth help to match STP records with employees.
Reporting accurate information about your employee’s employment basis such as full time, part time or casual each time the payroll is ran.
Continuity of YTD reporting if moving to STP Phase 2 part-way through the financial year, YTD amounts already reported through STP Phase 1 need to be maintained. This does not apply if an alternative method is used for transitioning to STP Phase 2.

More information can be found on the ATO website.

Electric Vehicles and Fringe Tax Benefits

A factsheet has been created by the Australian Taxation Office (ATO) for employers regarding their Fringe Tax Benefit (FBT) obligations when providing their employee with an electric vehicle and associated items for their private use.

The highlight key points are:

An FBT exemption may apply to a car benefit arising from making available an electric vehicle (VE) to an employee, or their associates’ for their private use
Private use of plug-in hybrid VE is no longer eligible for exemption after 1^st April 2025 unless:
Use of plug-in hybrid VE was exempt before 1^st April 2025

AND

The employer has a financially-binding commitment to continue providing private use of that vehicle on and after 1^st April 2025
If an employer or lessor provides an employee with the use of a car by means of a lease arrangement, the benefit provided is only a car benefit if it is a bona fide car leasing arrangement
Associated benefits arising from the provision of certain car expenses provided with the VE are also exempt from FBT, which is not included when calculating the reportable fringe benefit amount
Providing an employee with a home charging station is a fringe benefit
Exemption can still apply if the use of car and associated car expenses are provided under salary sacrifice arrangement
The employer must calculate the taxable value of the car benefit provided to determine if the employee has a reportable fringe benefit amount, even if an exemption applies

For more information on electric vehicles and FBT is available on the ATO website.

ABN Details Update

It is time for Australian Business Number (ABN) holders to refresh and update their details.

ABN information is important as government agencies and emergency services uses the ABN details to identify businesses and assist in determining who need support during or after a disaster.

Holders are at risk of missing out on important assistance, updates or opportunities (i.e. financial grants) if the ABN details are out of date.

Details that should be updated include:

Authorised contacts
Business physical location
Postal address
Email address
Phone number
Business activities

ABNs must be cancelled, if it is no longer in use. The ATO may also cancel ABNs, if there are no sign of business activity.

ABN details can be updated through the Australian Business Register website. However, you can contact our office if you require further assistance.

Director ID Deadline Update

It has been confirmed by Chris Jordan from the Australian Business Registry Services (ABRS) that the director ID deadline has been extended by two weeks.

Currently, over 1.8 million directors have applied for their ID and it is estimated around 700,000 still need to apply.

It is a requirement for all directors to apply for a director ID and all existing directors appointed prior to 31^st October, must apply their ID by the 30^thof November. However, ABRS will now apply a pragmatic compliance approach on directors who are supposed to have their ID by the 30^th, if they apply by 14^th December 2022 – though penalties or offences can still apply.

The director ID is free to apply and can be done through the ABRS website online.

For those who have registered for a director ID, please contact our office by email or phone us to let us know so we may update our records accordingly.

Motor vehicle for business purposes

The ATO has summarised four things to keep in mind when claiming motor vehicle expenses such as fuel, repairs, and registration for your business.

If your business operates as a sole trader or partnership where one partner is an individual, the method that can be used to calculate depends on the type of vehicle.

For cars, the methods that can be used is known as cents per kilometre or logbook. It is defined as motor vehicles which include four-wheel drives and are designated to carry a load less than one tonne and fewer than nine passengers.

For all other vehicles, it includes motorcycles and vehicles that are designated to carry a load more than one tonne and more than nine passengers. The method that must be used is the actual costs method where the actual costs of expenses incurred can be claimed based on receipts.

If you use logbook or actual costs method, you can only claim the business-use portion of your motor vehicle expenses.

If your business operates as a company or trust, the method that can be used is the actual costs method regardless of the type of motor vehicle you use.

If you use the logbook or actual costs method, you can only claim the business-use portion for depreciation or decline in value on a motor vehicle. The maximum claimable for a deduction for the depreciation of your car in 2022 financial year is $60,733 or the cost of the vehicle (whichever is less). You may also be eligible to claim depreciation under the temporary full expensing

If you require assistance with claiming motor vehicle expenses as a tax deduction there is a web content designated on motor vehicle expenses available on the ATO website. Otherwise, you can call our office to book an appointment to discuss more with our tax agents.

2022 Tax Time Guidance and Toolkit for Small Businesses

The Australian Taxation Office (ATO) have published a 2022 small business tax time toolkit to provide ease during tax time. Useful information, tools, calculators, learning resources and other support and services available has been updated.

Specifically, there are also information on COVID -19, Fringe Benefits Tax and factsheets for primary producers on:

Landcare and riparian maintenance – expenses
Preventing and preparing for fire emergencies – expenses
Tree farming (forestry operations) – income and expenses

Employers can also assist their employees by providing them with the occupation and industry specific guides. This has been created for individuals to allow them to understand what needs to be reported as well as what they can claim as a deduction.

If you have any queries regarding taxations, please contact our office.

Taxable payments reporting

The Taxable Payments Annual Reporting (TPAR) include businesses in the building and construction industry, cleaning services, courier services, road freight, information technology and security, investigation, or surveillance services.

You will need to report if all of the following apply:

You are in one of the businesses listed above
make payments to contractors for one of the above services
have an Australian business number (ABN).

Using the information from the invoices you receive from your contractors, you then need to report the following information:

their Australian business number (ABN)
their name
their address
the gross amount you paid them for the financial year (this is the total amount paid including GST)
the total GST included in the gross amount you paid.

TPAR is due by the 28^th of August each year and you can lodge online or by paper. You can also obtain TPAR forms, from our new office located at Unit 2, 78 Blair Street BUNBURY WA 6230. If you require any further information, please contact our office.

Areas of focus for 2022 Tax Time

For the 2022 Tax year, the Australian Taxation Office (ATO) has recently announced four areas of focus that will be prioritised to ensure there is an appropriate level of scrutiny on income and deductions reported, and these are:

Record-keeping
Work-related expenses
Rental property income and deductions
Capital gains from crypto assets, property, and shares

The ATO are targeting areas where they see taxpayers are making mistakes on what they report on their tax returns. As mentioned by the Assistant Commissioner, Tim Loh, “it is important that taxpayers rethink their claims and ensure they are able to satisfy 3 golden rules”.

Ensure that the money is spent yourself and not reimbursed
You can only claim the portion of expenses related to producing income if the expense is for a mix of income producing and private use
You must have a record to prove it

Record-keeping

It is advised for taxpayers to start organising all income and deduction records throughout the financial year to ensure a “smooth” tax time and claiming deductions that are entitled.

Lodging correctly

The ATO has seen many mistakes on returns lodged early in July as income from bank interest, dividends, other government payments and private health insurance are often missed. This information is generally automatically pre-filled in tax returns by the end of July. Hence, for taxpayers wanting to lodge their returns early July, it is advised to take extra time to manually add all income.

Before you lodge, it is also important to ensure that your income statement is marked “tax ready” and that your pre-fill is available to avoid any amendment to be made. This may cause a delay in processing your refund.

The availability and readiness of your pre-fill information can be viewed on the ATO app.

Work-related expenses

1 in 3 Australians have been claiming work from home expenses in their returns last year as some taxpayers have changed to a hybrid working environment since the pandemic. Therefore, if your working conditions remain the same, the ATO are expecting to see a corresponding reduction in motor vehicle expenses, clothing, and other work-related expenses such as parking.

There are three methods available to claim a deduction for home office expenses – shortcut, fixed rate, and actual cost methods.

It is advised to not “copy and paste” prior year’s claims if your working arrangements have changed. It is also important to only claim the work-related portion of the expense if the expense is used for both work-related and private use. For example, you cannot claim 100% of mobile expenses if the mobile is used to attend private calls and messages.

More information on deductions is available on the ATO website.

Rental income and deductions

Rental property owners are advised to ensure all income (including short-term rental arrangements, insurance payouts and rental bond money) received from rental/s are reported in their tax returns. There may be a delay in processing your refund, if the ATO notices any discrepancies. Therefore, it is important to keep good records on all rental income and expenses for you or your tax agent to record on your return and ease the process of providing any supporting documents to the ATO when requested.

More information on residential rental properties is available on the ATO website.

Capital gains from crypto assets, property, and shares

A capital gains or loss must be calculated and reported on your tax returns of you have disposed any property, shares or crypto asset (including non-fungible tokens).

The ATO is aware that many Australians are buying, selling, and exchanging digital coins and assets through their data collection processes. It is seen that crypto is becoming more popular and the ATO are expecting to see more gains or losses reported in this financial year tax return.

It is important that taxpayers are aware of the tax obligations that occur in the purchase, sale, and exchange of these assets. More information on crypto is available on the ATO website.

When lodging your 2022 financial year tax return, it is crucial to ensure that all income and appropriate expenses are recorded correctly to avoid any amendments and delays in processing your refund. If you require assistance in lodging your tax return or have any queries on your tax return, please contact our office to book an appointment with our accountants.

Business Tax Debt Disclosure and Director Penalty Notices

Under the Disclosure of Business Tax Debt measure, businesses may have their tax debts disclosed to Credit Reporting Bureaus (CRBs).

Currently, the ATO are preparing letters to eligible businesses to have their debt information released. The letter will be sent to the postal address listed on the ATO account. The purpose of this measure is to raise an awareness for taxpayers when no action is taken to manage tax debts.

Fortunately, the letter will give businesses an opportunity to engage effectively with the ATO to manage debts and avoid disclosure. Where full payment or payment plan is made, your debts will not be disclosed.

A formal Intent to Disclose Notice will be issued where no action is taken. This is the final notice that will be issued, and businesses have 28 days from the letter received date, before the ATO release businesses debts to CRBs.

Also, under the Director Penalty Notice (DPN) program, former or current director/s of a company will also be notified of their personal liability for the company’s tax debt and the potential issue of DPN.

It is the director’s responsibility to ensure that the company meets its net GST, PAYG withholding and SGC obligations. Where your company fails to meet these obligations, you will be liable personally for director penalties equal to the business’ unpaid amount. The amounts owed are the same for all directors if there are more than one director in a company.

Please contact the ATO immediately, if you disagree with the current debt balance. It is important to have your tax debts managed and that lodgements are current to avoid any penalties. Despite the disclosure of business tax debts, collection action as well as the accrual of general interest charge will continue until addressed.

Tax Avoidance Taskforce – Targeted Trusts

New information has been released by the ATO regarding their Tax Avoidance Taskforce targeting higher risk trust arrangements in privately owned and wealthy groups.

Their taskforce was funded by the government since the 2014 financial year budget, to act against taxpayers involved in tax avoidance or evasion. The trust taskforce continues to be operational since 1^st July 2017. Their aim is to build and encourage confidence and voluntary compliance in the Australian community through publicising their activities. The risks that are focused on include:

Lodgement of trust returns
Unidentified beneficiaries
Cross border and international risks
Complex distributions
Avoidance and evasion
Trust and taxable income mismatches

In relation to trusts, the ATO currently prioritises to:

Undertake focused compliance activity on privately owned and wealthy groups involved in tax avoidance and evasion arrangements using trust structures
Target known tax scheme designers, promoters, individuals, and businesses who participate in such arrangements
Lead cross-agency action to pursue the most egregious cases of tax abuse using trusts
Undertake projects to gather intelligence on and deal with specific risks

More information on Tax Avoidance Taskforce – Trusts is available on the ATO website.

No deductions for late Notice of intent to claim or vary a deduction for personal super contributions submission

Recently, the Administrative Appeals Tribunal of Australia (AATA) has confirmed that taxpayers are unable to claim a deduction for personal super contributions if notice of intents are submitted late.

During the 2019 financial year, a taxpayer made and claimed personal super contributions of $9,600 to which his return for that year was lodged on July 3^rd, 2019, with his notice of intent submitted on July 17^th, 2020. Since he was over a year late in providing the required notice to his super fund, he was issued with a private ruling that states he is unentitled to deduct super for that financial year. More information regarding this ruling is available on the AATA website.

Hence, if you have made personal super contributions and intent to claim the contribution as a deduction, please ensure to provide your super fund with notice either:

The day you lodge your tax return for the year in which contributions were made

The last day of the income year in which you made the contributions

Instructions on Notice of intent are available on the ATO website. Otherwise, if you require any assistance regarding the Notice of intent form, please contact our office.

Cancellations of ABNs

The ATO are currently reviewing Australian Business Numbers (ABNs) to determine those that are potentially inactive for cancellation. There has been an improvement to the ABN cancellation program, where tax agents or their clients are able to confirm the ABN status through a secure voice respond system.

ABNs that are likely to be identified for cancellation, if there is no business activity being reported in their tax returns, lodgements or any information retained by third party services. Once identified, the ATO will notify you. From there if you still require the ABN, you are required to inform the ATO with a reason why you need the ABN.

Tax agents must advise clients to report any income earned (regardless of the amount) under their ABN in their return. In doing this, the ATO can differentiate ABNs that are active and inactive.

For tax agents where your clients have been selected for ABN cancellation, you may be contacted by the ATO and advise actions that must be taken to proceed or prevent the ABN from cancelling. Clients with a cancelled ABN but requires one can apply to reactivate.

More information on ABN cancellation program is available on the ATO website.

Stapled super funds

A stapled super fund is an existing super account linked to an employee. The purpose of this request is to prevent employees from incurring account fees with the creation of new super accounts every time they change occupation.

From 1^st November, employers must request stapled super fund details when:

Your new employee starts on or after 1^st November
You need to make super guarantee payments for that employee
Your employee is eligible to choose a super fund but does not

Ineligible employees will not need to be offered a choice of super fund, but a request of their stapled super fund may still be required. This includes employees that are temporary residents or covered by an enterprise agreement or workplace determination made before 1^st January 2021.

Employers may incur additional penalties if they do not meet the choice of super fund obligations. Therefore, it is important for employers to check and update the level of accessibility their authorised representatives have in the ATO online services. Hence, if your authorised representatives:

Do not have full access – an ‘Employee Commencement Form’ permission will be required for them to have the ability to request a stapled super fund

Do not need access – you will need to remove the permission

Steps to requesting stapled super fund details:

Step 1: Offer eligible employees a choice of super fund

Employers must provide eligible employees with a ‘Super standard choice form’ and pay super into the account stated on that form.

Step 2: Request stapled super fund details

If your employee does not choose a super fund, you will need to request their stapled super fund details. The request can be made yourself through the ATO’s Online services or your tax agents.

Once requested and confirmed that you are their employer, the ATO will provide your employee’s stapled super fund details. Super payments must be paid into the stapled super fund details provided by the ATO.

Step 3: Pay super into a default fund

Super payments can be paid into a default fund or other fund that meets the choice of fund obligation if:

Your employee does not choose a super fund

AND

The ATO have advised that your employee does not have stapled super fund

More information on stapled super fund is available on the ATO website.

Home address as your Business address

Some running expenses are claimable for small businesses operating from home. These include the cost of cleaning, electricity, telephone, and depreciation of business assets.

Below are the methods available for home office expenses calculation:

Actual cost method
52 cents per hour fixed rate – covers heating, cooling, lighting, cleaning and depreciation of furniture and furnishings
80 cents per hour temporary shortcut method – period claimable from March 2020 until June 2021, covering all expenses

It is advisable to keep good expense records to determine which methods works best.

Occupancy expenses for a specific area of your house is also claimable. However, it must be an area set aside for ‘business’. These expenses include mortgage interest, rent, rates and insurance.

Please note that you can only claim a portion of your expenses relating to operating your business.

More information on home-based small business eligibility and expenses are available on the ATO website. If you require further assistance regarding these claims, please contact our office to book an appointment.

Protect your information

Government services online can be easily access through myGovID, which is essential for businesses. It is important to always check who has access to your information and can interact on your behalf.

The Relationship Authorisation Manager (RAM) is a tool that allows:

Authorising new employees to act on behalf of your business

AND

Removing employees who have left the business or does not require access

Once authorisation in RAM is set up, you are able to ‘access manager’ to check employees’ permission on the amount of information they are allowed to manage.

Follow the links below for more information on myGovID and RAM Authorisations:

Taxable Payments Reporting

Taxable Payments Annual Reporting (TPAR) includes businesses in the building and construction industry, cleaning services, courier services, road freight, information technology and security, investigation or surveillance services.

You will need to report if all of the following apply:

You are in one of the businesses listed above
make payments to contractors for one of the above services
have an Australian business number (ABN).

Using the information from the invoices you receive from your contractors, you then need to report the following information:

their Australian business number (ABN)
their name
their address
the gross amount you paid them for the financial year (this is the total amount paid including GST)
the total GST included in the gross amount you paid.

The Taxable payments annual report is due by the 28^th of August each year and you can lodge your Taxable payments annual report online or by paper. You can obtain taxable payments annual report forms from our office or the ATO and if you require any further information please contact our office.

ATO on a look out on Cryptocurrency
The ATO are alerting taxpayers to be aware that cryptocurrency gains are not tax free and must be treated like other investments, hence capital gains tax (CGT) applies. In recent years approximately 600,000 taxpayers are invested in crypto-assets. This year the ATO will be prompting cryptocurrency investors to review prior year returns and to report any cryptocurrency gains or losses.

Assistant Commissioner, Tim Loh emphasizes that “gains from cryptocurrency are similar to gains from other investments like shares”. Therefore, investors who buy, sell, swap for fiat currency or exchange one cryptocurrency for another will be subjected to CGT and must be reported in the return. CGT also applies to the disposal of non-fungible tokens (NFTs). A discount may be entitled on capital gains if the cryptocurrency has been held for more than 12 months.

Please be aware that the ATO can determine if investors are paying the right amount of tax through data matching from cryptocurrency service providers. It is advised to keep accurate records of any cryptocurrency gains and losses, these include:

Dates of transactions
Value in Australian dollars at the time of transaction
What the transactions were for
Who was the other party

Businesses or sole traders that are paid cryptocurrency for goods or services will regard these payments taxed as income based on the value of the cryptocurrency in Australian dollars.

It is important to act fast if you realized that you have missed or incorrectly reported on crypto-assets to reduce possible penalties.

More information on cryptocurrency is available on the ATO website or through the cryptocurrency fact sheet.

Accessing myGov through myGovID

MyGovID can now be used to sign into myGov. It is necessary to connect your myGovID to your myGov account. This ensures signing in:

Simple – set up once and use it to unlock government online services
Flexible – able to still use existing myGov sign in as well as myGovID to avoid losing access to your account when using SMS codes
Secure – your personal information is encrypted and verified against existing government records
Streamlined – access multiple government online services for both personal and business matters

More information on how to connect your myGovID to your myGov account can be found on the ATO website.

JobMaker Hiring Credit

Eligible employers are still able to claim for the first JobMaker Hiring Credit for additional eligible employees hired between October 7, 2020 and January 6, 2021.

Employers must do the following to receive payments:

Register through ATO online services, online services for business or registered tax or BAS agent by April 30^th
Nominate eligible additional employees through STP by April 27^th
Claim payments through ATO online services, online services for business or registered tax or BAS agent by April 30^th

Registrations are open until the scheme ends, which should only be completed once before the end of the claim period.

More information on JobMaker eligibility, registration and key dates are available on the ATO website.

JobMaker Hiring Credit

The first claim period for the JobMaker Hiring Credit is currently open and closes on April 30^th. During this period, eligible employers should register, if requiring Government assistance with the cost of hiring more employees.

To submit your claim, you will need to:

Register through the ATO online services, the Business Portal, or your registered tax agent
Nominate eligible employees through Single Touch Payroll
Provide your employee headcount and payroll for the JobMaker Period

The ATO has created a JobMaker Hiring Credit Guide to ease your registration. If you require further assistance regarding your registration, please contact our office to book an appointment.

Extension 2 of JobKeeper

The Government’s extension of JobKeeper is now in progress and will be available between 4^th January to 28^th March 2021.

Individuals who were not eligible for the first JobKeeper payouts may now be eligible. Those that are eligible can apply until the end of the program.

Eligibility is dependent on the declined in actual GST turnover for the December 2020 quarter compared to a relative period (i.e. December 2019 quarter).

The payment rates for eligible employees for JobKeeper 2 are:

Tier 1: $1,000 per fortnight (before tax)
Tier 2: $650 per fortnight (before tax)

Below are the extended reporting dates:

December business monthly declaration was due on the 28^th January 2021
Dateline for JobKeeper fortnights 21 and 22 payments (starting on 4^th January and 18 January) eligibility was due on the 31^st January 2021.

More information on JobKeeper extension 2 can be found using the resources from the ATO website. Otherwise, if you require further information or discussion regarding the second extension you can contact our office.

STP Data-Sharing

Employers are now reporting your payroll information to the ATO, through Single Touch Payroll (STP). For every time employees are paid, the ATO will exchange this information to Services Australia. This is completed through a data-matching program. The purpose of providing your information to Services Australia is to assist their administration on the welfare system.

Services Australia have the capacity to use the STP data to ease their process on gathering information for their customers for taxation, Centrelink payment and fringe benefit purposes. Hence all employers must start reporting payroll through STP. Follow this link, for more information on how to report STP.

More information on Data-matching programs are available on the ATO website.

Changes to PAYG Withholding

Personal tax cuts have been introduced and is effective from July 2020. An updated tax table is available on the ATO website. The ATO advise employers to ensure that correct amounts are withheld from their employee’s salary and wages for pay runs processed from November, 16.

No adjustments or refunds will be made. Payroll software providers will be updating their software to reflect these changes. Any over amount withheld, prior to the software update or process are to be included in the employee’s end of year income tax assessment.

Tax options available for struggling businesses through COVID-19

The Australian Taxation Office are aware of how tough the year has been and advises businesses to contact the ATO or your registered tax agent if you are feeling overwhelmed and require extra assistance with your tax affairs. There are a range of possible tax options available, including a deduction for losses for businesses affected by the pandemic.

Current year losses can offset against other assessable income, such as your salary and investment income in the same year if criteria are met. Otherwise, the loss can be carried forward and be used when you gain a business profit. It is advisable to keep your tax records for five years. Please note that deductions such as donations, gifts and super contribution cannot be used to increase or create a tax loss.

Businesses that must temporarily close are required to try their best to keep up with their tax affairs. For additional time and support, you will need to contact the ATO or your registered tax agent.

Businesses that must permanently close down are required to:

Lodge any outstanding activity statements
Lodge any outstanding instalment notices
Make GST adjustments on your final activity statement
Lodge your final tax returns

This allows the ATO to finalise your account and issue out refunds that are owed to you. After your final lodgement, you will also need to cancel your ABN and GST registrations. Even after the business closure, tax records must be kept for at least five years.

No penalties and interests will be applied for excessive variation of income estimation for PAYG Instalments.

A series of webinars are made available for businesses through the ATO website. To find out more about business losses and how to claim them, follow this link. Otherwise, you can contact our office to discuss on your eligibility.

Car Fringe Benefit and COVID-19

Garaging a car at an employee’s home

Where your employee is garaging a work car at home, you may be providing them with a car fringe benefit.

The taxable value of the car fringe benefit is calculated by using either:

Statutory formula method – taxable value is a set formula based on the car’s cost price
Operating cost method – taxable value is based on the operating costs of the car, minus any business usage

An employee’s private use of taxi, panel van or utility vehicle designed to carry less than one tonne is exempted from FBT if its private use is limited to:

Travel between home and work
Incidental employment related travel
Minor infrequent/ irregular non work related travel

More information on exempt car benefits, see Fringe benefits tax – exempt motor vehicles.

If a home-garaged car is not being driven

In situations where a car has not been driven or driven briefly for maintaining the car, will not be accepted for the purpose of providing fringe benefits to your employee. There will be a nil taxable value for the car, therefore no tax liability, if the operating cost method is used. Records of the odometer will be required as evidence. Otherwise, the statutory formula method applies, resulting in an FBT liability, because keeping the car garaged is taken to be available for private use.

If a home-garaged car is being driven

The operating cost method can be used to reduce the taxable value of the car benefit to nil if an employee is driving a car for business purposes only. However, a logbook record will need to be kept for 12 continuous weeks or less than 12 weeks to date when the car is being garaged at home.

Logbook requirements for car fringe benefit

Logbook requirements depends on:

If you are using operating cost method and have an existing logbook
If it is your first time using the operating cost method

First timers to the operating cost method or a logbook year for the car must:

Keep a logbook for a continuous period of at least 12 weeks
Keep odometer records of the total kilometres travelled in the logbook period as well as the total kilometres travelled during the year.
Estimate the number of business kilometres travelled during the FBT year

If COVID-19 has impacted driving patterns and you have an existing logbook

Despite any changes in driving patterns due to COVID-19, you can still rely on an existing logbook. However, odometer records for the year must be kept as prove of how much the car has been driven during the year. A reasonable estimate of business usage must be made by taking into account the logbook, odometer records and changes in business use pattern throughout the year.

Otherwise, you can choose to keep a new logbook provided that the period is representative of your business use percentage that was affected by the pandemic, regardless the fact that it is not held a logbook year. This will provide an accurate representation of business usage.

Reportable fringe benefits

An FBT year is from April 1^st til 31^st March. The grossed up taxable value of those benefits exceeding $2,000 in an FBT year must be reported on their payment summary. However, where the car is shared or pooled, the use of the car is not reported in their payment summary.

More information and examples regarding Fringe Benefits and COVID-19 is available on the ATO Website.

Taxable payments reporting

Last year the ATO expanded the Taxable Payments Annual Reporting (TPAR) to include business in the building and construction industry, cleaning services, courier services, road freight, information technology and security, investigation or surveillance services.

You will need to report if all of the following apply:

you are in one of the businesses listed above
make payments to contractors for one of the above services
have an Australian business number (ABN).

Using the information from the invoices you receive from your contractors, you then need to report the following information:

their Australian business number (ABN)
their name
their address
the gross amount you paid them for the financial year (this is the total amount paid including GST)
the total GST included in the gross amount you paid.

COVID-19 Super Guarantee Amnesty Update

Applications for Super Guarantee (SG) amnesty must be submitted on 7^th September 2020 by 11:59PM to be eligible. From there, a payment plan can be established.

Payment plans may include:

Flexible payment terms and amounts which is adjustable to your circumstances.
The ability to extend the plan beyond 7^th September. Payments after the 7^th will not be tax deductible.

Any unpaid super that has been disclosed between 24^th May 2018 and 6^th March 2020 will not be required to apply or lodge. However, financial institution details must be correct for any eligible refunds to be issued in a timely manner. Any necessary updates can be made through the Business Portal.

Application procedures and form for SG amnesty is available on the ATO website. If you require any further assistance with your SG amnesty application, you can contact the ATO or our office.

A Summary of COVID-19 measures to support you – as an individual or entity

JobKeeper Payment

As you already know, a new measure has been created to support employers who are affected by COVID-19. However, it is not legislated yet although it is advised for businesses to register now for updates to be sent to you. The JobKeeper Payment support will be provided directly to eligible employers, once the legislation is enacted.

Early release of Super

From April 20^th, applications for the early release of superannuation will be accepted through myGov. This measure allows eligible individuals to access their superannuation of up to $10,000 in the 2020 financial year and an additional $10,000 in the 2021 financial year – no tax will be paid on the amounts taken.

Eligible Individuals

At least one of the following requirements must be met to be classified as an “eligible individual”:

You are unemployed
You are eligible for the newly released COVID-19 allowances/payouts, such as JobSeeker Payment.
As of January 1^st, 2020:
You were made redundant

Your working hours were reduced by at least 20%

Your business was suspended or there was a reduction in turnover of at least 20% – applicable for sole traders

Please note that:

Withdrawing your super can affect your income protection and life/total permanent disability insurance cover
Insurance may not be available on accounts that are withdrawn in full or have a balance of less than $6,000

Be Aware

The ATO warns taxpayers of scam or schemes. If you receive an offer providing assistance with the release of super, please do not provide your personal details or click on any link and directly contact the ATO to verify if the interaction is genuine.

Cash flow boost for Employers

Eligible businesses will receive a tax-free cash flow boost of up to $100,000 from 28 April 2020, through credits in the activity statement system, once you have lodged your monthly or quarterly business activity statements (BAS). Additional cashflow boosts will automatically apply for initial eligible entities, if you have lodged your BAS.

Eligible Employers

The cashflow boost applies to small or medium business entities, including sole traders, company, trust, partnership or not-for-profit organisations. However, an entity must:

Obtain an active ABN on 12 March 2020
Has an aggregated annual turnover less than $50 million – based on 2019 financial year
Made required eligible withholding payments, even if the amount is zero
Eligible withholding payments include (but are not limited to) salary and wages, directors’ fees, eligible retirement or termination payments, compensation payments and voluntary withholding from payments to contractors

AND

Obtained business income in the 2019 financial year and lodged the 2019 tax return on or before March 12^th

Made GST taxable, GST-free or input taxed sales in the last tax period and lodged relevant activity statements on or before March 12^th

Additional cash flow boost

There will be two types of cash flow boosts payout – initial and additional. The initial cash flow boost will be calculated based on your PAYG Withholding amount and the additional cash flow boost is calculated at percentage of the amount your received initially for each activity statement. Quarterly BAS will receive 50% of the initial payout and monthly BAS will receive 25%.

Access to the cash flow boost

Therefore, eligible entities must lodge before the due date for each relevant period for the payout to be applied in credit, to your account automatically. The boost will be applied to reduce BAS liabilities, meaning you will be required to pay the ATO less. However, a refund of the excess amount will be applied if the credit is more than your BAS liability.

For our eligible clients who completes their own BAS, please follow this link to ensure you lodge before the lodgement date.

Also, for any reason whereby you would need to defer lodgement, the cash flow boost will only qualify if a lodgement deferral has been granted by the ATO.

Tax Consequences

These cash flow boosts are considered as non-assessable non-exempt income, which means you are not required to pay back when your cash flow improves. However, if you have been paid more than what you are entitled, you will be required to pay the excess. Also, carrying out schemes such as restructuring your business or increasing wages paid to fall within the eligibility criteria or maximising the payout, will result your business to be unqualified for the cash flow boosts.

With all that is happening now, we hope you are staying strong. For more information please click on the relevant topic for the link, regarding your superannuation or cash flow boost. Otherwise, if you have any enquiry or would like to discuss this further, please do not hesitate to contact our office.

Changes to accessing ATO’s online services

Get ready to bid goodbye to AUSKey.

From 1 April 2020, the ATO is replacing it with:

- myGovID – a new way to establish your identity digitally to access government services online
- Relationship Authorisation Manager (RAM) – enables you to authorize an administrator to manage your business online

To set up your digital identity, simply download the myGovID app which is available on App Store or Google Play.

As the Principal authority, link your ABN to your myGovID using RAM. This will enable you to work on behalf of your business online as well as authorise other users to work on behalf of your business.

Remember not to share your myGovID log in, as everyone should have their own to access RAM. Thus, once you have authorised a user, they will need to use their own myGovID to accept the authorisation to access government services online on your behalf.

If you have trouble setting up, you can visit the ATO website for more detailed information on how to set up myGovID and RAM or contact our office.

It is important to distinguish between and employee and a contractor

Unfortunately there’s no one deciding factor that makes a worker an employee or contractor for tax and super purposes. As an employer, it’s a decision you can only make accurately when you review the whole working arrangement.

The only way to get to the right answer is to ask the right questions. Answer these six questions before you hire a worker:

Ability to subcontract/delegate: can they pay someone else to do the work?
Basis of payment: are they paid based on an agreed quote they provided?
Equipment, tools and other assets: do they provide their own tools and equipment needed to get the job done?
Commercial risks: are they legally responsible for their work and liable for fixing mistakes or defects?
Control over the work: do they decide how the work gets done subject to specific terms in the contract or agreement?
Independence: do they operate their own business independently of your business?

If the answer is no to some or all of these questions, please contact our office or visit the ATO website for more information.

Low and middle income tax offset (LMITO) now law

Great news, after the Federal budget announcement the Low and middle income tax offset (LMITO) was made law and the changes applied from the 2018 financial year.

From the 2018–19 income year:

The low and middle income tax offset increases from a maximum amount of $530 to $1,080 per annum and the base amount increases from $200 to $255 per annum.
Taxpayers with a taxable income:
- of $37,000 or below can now receive a low and middle income tax offset of up to $255
- above $37,000 and below $48,000 can now receive $255, plus an amount equal to 7.5% to the maximum offset of $1,080
- above $48,000 and below $90,000 are now eligible for the maximum low and middle income tax offset of $1,080
- above $90,000 but is no more than $126,000 are now eligible for a low and middle income tax offset of $1,080, less an amount equal to three per cent of the excess.

The LMITO is also expected to be extended out to the 2025 financial year and more information can be found on the ATO website.

Single Touch Payroll (STP) and software

Single Touch Payroll (STP) now applies to all employers from the 1^st of July 2019. This is one of the biggest changes to employers for many years and many clients have been able to transition well using current payroll software.

Clients using STP for the 2019 financial year haven’t found the change too disruptive and have benefited from being able to finalise the payroll year direct with the ATO and not have to issue Payment Summaries to employees.

However for clients without payroll software, the end of year process has been the same as in the past but will now need to look at engaging a no-cost/low cost STP solution provider by the 30^th of September.

Currently there are some extensions for closely held employees and more information can be found on the ATO website or viewing the newsletter below.

Single Touch Payroll Newsletter

Single Touch Payroll (STP)

Single Touch Payroll (STP) will apply to all employers from the 1^st of July 2019. This is one of the biggest changes to employers for many years, however once an adequate process has been put in place it shouldn’t cause too much disruption.

In short, STP will mean:

Payroll information (including SGC liabilities) will be sent to the ATO with each pay run
No longer having to provide individual PAYG Payment Summaries and the annual PAYG Payment Summary
PAYG errors will need to be corrected immediately rather than waiting to year end
Employees will be able to access their wages and superannuation details through MyGov in real time

For clients using current payroll software, STP can be set up relatively easily and will find the change won’t be too disruptive. However for clients without payroll software, will now at a minimum need to engage a no-cost/low cost STP solution – the ATO have provided a list of these providers.

Currently there are some extensions for closely held employees and more information can be found on the ATO website.

Sales suppression tools are now against the law

It is now illegal to manufacture, distribute, possess, use or sell electronic sales suppression tools.

The sales suppression tools are considered to serve no intention other than to intentionally evade income tax. The ATO have made it very clear that anyone doing this can face large penalties.

It is important to keep good records (in particularly cash receipts/records) and more information or the new laws can be found on the ATO website or please contact our office on 97211 055 to further discuss your record keeping requirements.

Taxable Payments Annual Reporting

Businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year using a Taxable Payments Annual Report.

The aim of the system is to improve compliance with tax obligations by those contractors who are not doing the right thing. The information reported about payments made to contractors will be used by the ATO’s data matching section to detect contractors who have not lodged tax returns or have not reported all of their income in their tax returns.

More information can be found on the ATO website including the recent proposed planned changes to expand the taxable payments reporting system to include contractors in the courier and cleaning industries.

Small Business Superannuation Clearing House (SBSCH) to join ATO online services

From early 2018, you will need to access the Small Business Superannuation Clearing House (SBSCH) via the ATO online services through the Business Portal. When this happens, the SBSCH will no longer be accessible with your current user ID and password authentication.

The Business Portal is a great way to deal with the ATO online and you can register to use it today! You can prepare and lodge your activity statements, manage your accounts and update your business registration details.

Access to these online services is via an authentication solution to identify you and your business – with either Manage ABN Connections through your myGov account or an AUSkey.

For more information on SBSCH you can visit the ATO website.

Reduced small business company tax rates for lodged returns

The ATO has advised that companies with a turnover of less than $2 million who have lodged their 2016-17 company tax return early, will have their returns amended by the ATO to apply the lower 27.5 per cent company tax rate.

Companies with a turnover from $2 million to less than $10 million who have lodged their return will need to review it and lodge an amendment if required.

For the 2016-17 income year, the company tax rate for small businesses decreases to 27.5 per cent. Companies with an aggregated turnover of less than $10 million are eligible for this rate.

For more information on ‘What’s new for small business’ you can visit the ATO website.

TFN Declarations can now be downloaded

You can now access TFN declaration forms direct from the ATO website. You no longer need to order the form and wait for it to be mailed to you. Just download it direct from ATO or even better ask your new employee to download the form and fill it in on the screen.

Once it’s filled in print it off, get your employees signature then send the original copy to the ATO using the address on the form within 14 days (and please remember it is good business practice to keep a copy for your files).

The TFN Declaration can be accessed direct from the ATO.

Changes to tax rates for working holiday makers

Given the recent changes the ATO now require employers of working holiday makers to register with the ATO to withhold tax at working holiday maker tax rates and to check Visa subclass using the Visa Entitlement Verification service.

If the employer and employee satisfy the requirements then from the 1^st of January 2017 you can withhold tax at a rate of 15% for earnings up to $37 000. Note foreign resident rates apply for earnings over $37 000 and they cannot claim the tax-free threshold.

If the employee is unable to provide a tax file number (TFN) then you will need to withhold tax at the top marginal rate and remember working holiday makers remain entitled to superannuation (where applicable). Also it is important to note that working holiday makers will need to be issued with two payment summaries this year if they worked before and after the 1st of January 2017.

ATO data matching programs

The ATO has given notice of three data matching programs relating to online selling, share transactions and to credit and debit card transactions.

Under the online selling data matching program, the ATO will obtain data from eBay Australia and New Zealand Pty Ltd identifying online selling account holders with annual trading activity that amounts to $12,000 or more during the 2015-16 to the 2017-18 income years.

The ATO will seek, under the share transaction data matching program, data on share transactions from 20 September 1985 to 30 June 2018 from a number of sources. The data sought will include identities of buyers and sellers, share sale price and quantities of shares acquired or disposed of.

The ATO will also collect data from a number of credit and debit card providers relating to payments to businesses under the credit and debit card data matching program. The data will be obtained for the 2015-16 and 2016-17 income years on the identifying details of merchants with credit and debit card merchant facilities and the amount and quantity of the transactions processed.

When is your tax return due?

Generally speaking most self-preparers income tax returns are due by the 31^st of October. However if you have a good lodgment history and are registered with a tax agent, your return may not be due until around May next year.

You should also ensure you are using a registered tax agent (and you can check the tax agent is registered with the Tax Practitioners Board) online by visiting the Tax Practitioners Board. Also note failure to lodge on time can incur late lodgement penalties.

Visit the ATO website ‘Is your tax return due soon?’ for more information.

ATO Focus on property developers and trusts

In recent years the ATO have focused on trusts developing and selling properties as part of their normal business. When these developed properties are sold, some trusts incorrectly claim a 50 per cent capital gains tax discount.

The ATO continue to target arrangements that display the following characteristics:

Taxpayers have experience in either developing or selling property (or experience in the industry) and establish a new trust to acquire property for development and sale
Circumstances surrounding the arrangement are inconsistent with the stated purpose of developing the property as a long term investment
The development is advertised as available to purchase before completion or is sold soon after completion
The trustee claims the 50 per cent capital gains tax discount on the sale of the property.

Owning a rental property

The ATO has updated information on residential rental properties. It includes information on the obligations to keep records, working out deductible expenses, declaring rental-related income and working out any CGT on disposal.

It is important that new investors in rental properties pay careful attention to and seek professional advice on what they can claim as repairs and maintenance, particularly repairs to issues that existed when the rental property was purchased.

For more information on owning a rental property you can follow the ATO Link.

SuperStream

Every quarter as an employer you need to make the minimum payment of 9.5% of each eligible employee’s ordinary time earnings in super to a complying fund by the due date.

If you’re a business with less than 20 employees, or have an aggregated turnover of less than $2 million, you can use the Small Business Superannuation Clearing House to save time and avoid the super guarantee charge.

It’s fast and easy to use because you pay all of your super contributions in one transaction and the clearing house will distribute your payment to the various super funds on your behalf. Alternatively if you have compliant payroll accounting software payments can be done electronically through the software.

Start saving time by using the clearing house or payroll software (SuperStream).

ATO to send “certainty letters” to taxpayers

The ATO will contact more than 500,000 taxpayers as part of a pilot program to confirm that their recently submitted tax returns will not be subject to further review.

This initiative is part of the ATO’s focus on providing more support to taxpayers who do the right thing, and is aimed at taxpayers with straightforward affairs with taxable incomes of less than $180,000.

Taxpayers who do not receive a letter, however, need not to worry, as it is a pilot program and more information you be found at the following link.

Changes to receiving activity statements and instalment notices

The ATO are now delivering activity statements and instalment notices for some individual and sole trader clients who have a linked myGov accounts to the ATO, and will no longer be sending paper activity statements or instalment notices.

For more details see Paper activity statements and myGov.

Click for past ATO news.

Taxable Payments Annual Reporting

You should consider if you need to report and if you require any assistance reporting and lodging by the 28^th of August every year please contact us on 97211 055 or visit https://www.ato.gov.au/Business/Yearly-reports-and-returns/Taxable-payments-annual-report/

Important Information for Employers

The end of the financial year is approaching and as an employer you need to:

provide payment summaries to your employees by 14 July, and
send us your payment summary annual report.

Lodging your annual report as soon as you can will assist your employees to lodge their tax return.

There will also be changes to the car allowance being paid on a cents per kilometre basis and lodging Tax File Number (TFN) declaration forms. Note also the Tax Rates from 1 July will be changing.

The new tax tables and more information can be found at ato.gov.au/taxtables.

SuperStream

SuperStream is a relatively new government reform that is intending to provide a simple and single channel for employers to make super contributions electronically to all funds. This will affect employers, employees receiving superannuation contributions and members of a self-managed superannuation fund.

Through the use of technology, SuperStream is designed to be faster, with fewer errors and to provide a reliable electronic way of managing superannuation with the aim of reducing time and cost in the long term.

SuperStream is compulsory and all employers should be paying using SuperStream from the 1^st of July 2015. You can make contributions using:

SuperStream compliant superfund
Compliant payroll software Eg MYOB Account Right
Electronic clearing house (Small Business Clearing House for small employers)

With regards to SMSF clients, the;

SMSF must be able to receive SuperStream contributions
Provide the employer with:
1. ABN
2. Bank Account Details
3. Electronic Service Address (ATO list of SMSF messaging service providers)

Note contributions sent to a SMSF from a related party employer are exempt and can be made using existing processes.

It is important that you are compliant as soon as possible and for more information you can view the ATO website for Employers or for SMSFs.

Growing Jobs and Small Business

The Government has proposed to expand accelerated depreciation by allowing small businesses with aggregated annual turnover of less than $2 million to immediately deduct each asset that cost less than $20,000. The measure will apply to assets acquired from 7.30pm on 12 May 2015 until 30 June 2017.

Assets excluded from these depreciation rules include horticultural plants and in-house software allocated to a software development pool. In most cases specific depreciation rules apply to these excluded assets.

Assets that cost $20,000 or more (which can’t be immediately deducted) can be deducted over time using a small business pool. Under the pooling mechanism a deduction for 15 per cent of the cost is allowed in the first income year with a 30 per cent deduction allowed for each income year thereafter.

The balance of a small business pool can also be immediately deducted if the balance is less than $20,000 at the end of an income year that ends on or after 12 May 2015 but on or before 30 June 2017 (including existing pools).

The Government will also suspend the current ‘lock out’ laws for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for five years if they have opted out) until 30 June 2017.

This proposed measure commences 7.30pm (AEST) 12 May 2015 and will cease on 30 June 2017. For further information view the Media release.

Single Touch Payroll – ATO Discussion Paper

The ATO has issued a discussion paper on the proposed introduction of single touch payroll for employers from 1 July 2016. Under Single Touch Payroll, employers will be required to electronically report payroll and superannuation information to the Tax Office when employees are paid using Standard Business Reporting-enabled software.

In addition, Single Touch Payroll will streamline tax file number (TFN) declarations and Super Choice forms by providing a digital channel to simplify the process of bringing on new employees. Single Touch Payroll will be available from July 2016.

To meet their obligations employers would be required to use appropriate payroll software. The discussion paper seeks views on transitional issues, suggestions on how to minimise compliance costs and the potential for employers to remit employee Pay As You Go Withholding and the Superannuation Guarantee Charge contributions at the same time employees are paid.

Prime Minister Update

In a recent address to the National Press Club of Australia, Prime Minister Tony Abbott discussed matters including a “small business and jobs package”, the upcoming white papers on tax reform, and paid parental leave.

Notably, Mr Abbott said that the government is working on a “small business and jobs package”. A small business company tax cut on 1 July 2015 – “at least as big as the 1.5 per cent already flagged” – is proposed. He also said that the government will be inviting debate across the political spectrum for “a better tax system to deliver taxes that are lower, simpler and fairer”.

As for the paid parental leave scheme, he said that he will be “scaling it back, in a families package focused on childcare” and that a “bigger” parental leave scheme would be “off the table”.

View the full address.

Fuel Tax Credits have increased

The ATO has advised that since the carbon charge has been removed from the 1^st of July 2014 there will be an increase in fuel tax credits from the 10^th of November 2014, thus affecting the December 2014 BAS.

This will affect fuel you acquire for your business, you can:

- claim more for many off-road activities
- no longer claim fuel tax credits for non-transport gaseous fuels used in agriculture, fishing and forestry activities.

You can now also claim more for transport gaseous fuels and from the 10^th of November 2014 and there will be Fuel excise indexation. Rates will be indexed on 1 February and 1 August each year in line with the consumer price index.

Now that fuel tax credit rates are changing regularly, it’s important to keep good records to support your claim.

You can view how these rates have changed using the rates table or if require any assistance with your claims please contact us on 97211 055 or arrange an appointment today.

ATO reminder on building and construction reporting

The ATO has advised that it is writing to businesses in the building and construction industry who have not lodged their 2013-14 Taxable payments annual report. It said the letter will generally be sent to businesses and will remind them that the report is now overdue. Taxable payments annual reports were due by 21 July. The ATO said these businesses need to lodge their report immediately to avoid possible penalties. The ATO said it needs to be informed that an entity does not need to report if the business is no longer in the building and construction industry or did not pay contractors during 2013-14.

If you require any assistance with your reporting please contact us on 97211 055 or arrange an appointment today.

Taxable Payments Annual Report

You should consider if you need to report and if you require any assistance reporting and lodging by the 21st of July every year please contact us on 97211 055 or visit https://www.ato.gov.au/Business/Yearly-reports-and-returns/Taxable-payments-annual-report/

The New Tax Receipt

Starting from 1 July 2014, the majority of taxpayers will receive a tax receipt as part of the annual income tax return process. This is a new government initiative to increase transparency on how and where the government spends taxpayer money.

The tax receipt provides a breakdown of how your client’s tax has contributed towards government expenditure, and also includes information on the level of Australian government debt.

Note however the Taxpayers will only receive a tax receipt, if they have assessed income tax of $100 or more for the year 2013–14, and they lodged their tax return within 18 months from the end of the 2013–14 financial year.

The tax receipt will be included with your client’s original notice of assessment and will only be provided for income year 2013–14 and later years.

For more information on the tax receipt follow the link https://www.ato.gov.au/Individuals/Lodging-your-tax-return/Refunds,-assessments-and-amendments/Tax-receipt/