Temporary full expensing enables your business to fully expense the cost of: new depreciable assets improvements to existing eligible assets, and second-hand assets in the first year of use. Introduced in the 2020-21 budget and now extended until 30 June 2023, this measure enables an asset’s cost to be fully deductible upfront rather than being claimed over the asset’s life, regardless of the cost of the asset. Legislation passed by… Read more
Two landmark cases before the High Court highlighted the problem of identifying whether a worker is an independent contractor or employee for tax and superannuation purposes. Many business owners assume that if they hire independent contractors they will not be responsible for PAYG withholding, superannuation guarantee, payroll tax and workers compensation obligations. However, each set of rules operates a bit differently and in some cases, genuine contractors can be treated… Read more
Late last month, the Australian Taxation Office (ATO) released a package of new guidance material that directly targets how trusts distribute income. Many family groups will pay higher taxes (now and potentially retrospectively) as a result of the ATO’s more aggressive approach. Family trust beneficiaries at risk The tax legislation contains an integrity rule, section 100A, which is aimed at situations where the income of a trust is appointed in… Read more
The Treasurer has announced that PCR and rapid antigen tests (RAT) will be tax deductible for individuals and exempt from fringe benefits tax (FBT) for employers if purchased for work purposes. There has been confusion over the tax treatment of RAT tests with the Prime Minister stating for some time that they are tax deductible, but in reality, the tests were probably only deductible in limited circumstances. If you have… Read more
The 2022 Luna New Year, Year of the Tiger, is courage and bravery. It is a year to drive out evil and one of momentum and change. The message; walk boldly with courage. And it seems the Reserve Bank Governor is aligned with this sentiment. The Tiger economy At a recent speech to the National Press Club, Reserve Bank Governor Philip Lowe was optimistic about Australia’s prospects in 2022. This… Read more
The rules for the Pandemic Leave Disaster Payment, the payment accessible to those who have lost work because they have had to self-isolate with COVID-19, or are caring for someone who contracted it, changed on 18 January 2022. The new rules change the definition of close contact in line with the harmonised national definition. The payment is now accessible if you are a close contact because you either usually live… Read more
Businesses struggling with the Omicron wave of the pandemic have been offered new grants and support in NSW, SA and WA. New South Wales The NSW Small Business Support package provides eligible employing businesses with a lump sum payment of 20% of weekly payroll, up to a maximum of $5,000 per week for the month of February 2022. The minimum weekly payment for employers is $750 per week. Eligible non-employing… Read more
The Australian Taxation Office’s finalised position on the allocation of profits from professional firms starts on 1 July 2022. The ATO’s guidance uses a series of factors to determine the level of risk associated with profits generated by a professional services firm and how they flow through to individual practitioners and their related parties. The ATO may look to apply the general anti-avoidance rules in Part IVA to practitioners who… Read more
2021 was to be the year we returned to a post-COVID normal however the pandemic has fundamentally changed the way many of us operate in our personal and work lives. Here is some of what we can expect this 2022: Federal Election The Federal election will be held between March and May 2022. Annoying text messages, robo messages and advertising are on their way! Federal Budget in March The timing… Read more
The High Court has ruled that the ‘backpacker tax’ is discriminatory. We look at the impact. Since 2017, the ‘backpacker tax’ has taxed the first dollar of income a backpacker earns in Australia – regardless of their residency status – at the working holiday maker tax rate of 15% up to: $37,000 in an income year for 2019-20 and earlier income years $45,000 for 2020–21 and later income years. When… Read more
Every year, we are asked about the tax impact of various Christmas or holiday-related gestures. Here are our top issues: Staff gifts The key to Christmas presents for your team is to keep the gift spontaneous, ad hoc, and from a tax perspective, below $300 per person. $300 is the minor benefits threshold for Fringe Benefits Tax (FBT) so anything at or above this level will mean that your Christmas… Read more
A lighter look at the complexity of Australian taxation laws and the year that has been. Dear Mr Claus, Thank you for the opportunity to provide strategic business, tax and compliance advice for your operation. We’re pleased you have initiated this advice as the Australian Taxation Office (ATO) has instigated a number of reviews that may impact your operations and your team, and its relationship to contractors. Some of these… Read more
Directors are now required to register for a unique identification number that they will keep for life. What is a director ID? A director ID is a 15 digit identification number that, once issued, will remain with that director for life regardless of whether they stop being a director, change companies, change their name, or move overseas. The introduction of the Director Identification Number (DIN) is part of the Government’s… Read more
The ATO has recently issued an alert on gifts or loans from overseas. The ATO is particularly concerned about schemes and arrangements designed specifically to circumvent Australian tax laws. In general, Australian-resident taxpayers need to declare their worldwide income in their Australian tax returns. Some schemes however disguise offshore capital gains or income as a gift or loan. So, how does the ATO know if money from overseas is a… Read more
The Australian Taxation Office recently updated its guidance on tax and cryptocurrency. In early November, the Commonwealth Bank announced that it is now Australia’s first bank to offer customers the ability to buy, sell and hold crypto assets, directly through the CommBank app. You know when the banks come on board, cryptocurrency has become normal. But cryptocurrency is only one part of the blockchain universe. Non-fungible tokens or NFTs (fungible… Read more
COVID-19 support will roll back as states and territories reach vaccination targets The National Plan, the road map out of COVID-19, does more than provide greater freedoms at 70% and 80% full vaccination rates, it withdraws the steady stream of Commonwealth financial support to individuals and businesses impacted by COVID-19 lockdowns and border closures. We look at the impact and the support that remains in place. For individuals The COVID-19… Read more
Superannuation is not like other assets as it is held in trust by the trustee of the superannuation fund. When you die, it does not automatically form part of your estate but instead, is paid to your eligible beneficiaries by the fund trustee according to the rules of the fund, superannuation law, and the death nomination you made. Death nominations Most people have a death nomination in place to direct… Read more
Is a financial services compensation payment to your superannuation fund a contribution? Of late, there have been several compensation payments made by financial services providers to customers that were inappropriately charged or overcharged for insurance premiums or services they did not receive, etc. New guidance from the ATO helps decipher whether these compensation payments are treated as contributions to your fund. The problem for some people is that where these… Read more
Running a business can be an isolating experience. And, with COVID-19 lockdowns and disruptions to trade, the pressure can be intense. NewAccess for Small Business Owners is a free and confidential mental health program developed by Beyond Blue to give small business owners the support they need. Whether you’re just feeling stressed, or completely overwhelmed about everyday life issues, they can help. Understandably, a lot of small business owners are reporting… Read more
New legislation will help prevent superannuation assets from being hidden during divorce proceedings. From 1 April 2022, the Australian Taxation Office (ATO) will be able to release details of an individual’s superannuation information to a family law court. The recently enacted laws are designed to ensure that there is procedural and economic fairness in divorce proceedings to prevent the under-reporting of superannuation assets. While a spouse’s superannuation information can be… Read more