What’s changing on 1 July 2022?

A series of reforms and changes will commence on 1 July 2022. Here’s what is coming up: For business Superannuation guarantee increase to 10.5% The Superannuation Guarantee (SG) rate will rise from 10% to 10.5% on 1 July 2022 and will continue to increase by 0.5% each year until it reaches 12% on 1 July 2025. If you have employees, what this will mean depends on your employment agreements. If…  Read more

The 120% deduction for skills training and technology costs

It’s a great headline, isn’t it? Spend $100 and get a $120 tax deduction. Days after the Federal Budget announcement that businesses would be able to claim a 120% deduction for expenditure on training and technology costs, we started receiving marketing emails encouraging us to spend now to access the deduction. But, there are a few problems. Firstly, the announcement is just that, it is not yet law. And, given…  Read more

Can I claim a tax deduction for my gym membership?

There are lots of reasons to keep fit, but very few of them have to do with how we earn our income. As a result, a tax deduction for a gym membership isn’t available to most people. And yes, the Tax Office has heard all the arguments before about how keeping fit reduces sickness and therefore is important to earning an income, and the way I look is important to…  Read more

Fuel tax credit changes

The Government temporarily halved the excise and excise equivalent customs duty rates for petrol, diesel and all other petroleum-based products (except aviation fuels) for 6 months from 30 March 2022 until 28 September 2022. This has caused a reduction in fuel tax credit rates. During this 6 month period, businesses using fuel in heavy vehicles for travelling on public roads won’t be able to claim fuel tax credits for fuel…  Read more

ATO ramps up heat on directors

Throughout March, the ATO sent letters to directors who are potentially in breach of their obligations to ensure that the company they represent has met its PAYG withholding, superannuation guarantee charge, or GST obligations. These letters are a warning shot and should not be ignored. The director penalty regime ensures that directors are personally liable for certain debts of the company if the debts are not actively managed. The liability applies to…  Read more

Debts placed on hold by the ATO

The ATO has provided some brief updated guidance on the treatment of tax debts that are placed on hold (not pursued). These will not be visible on the balance of the taxpayer’s accounts. However, taxpayers should receive written notification of the decision to place the debt on hold. The ATO guidance also sets out how these debts can be viewed by using online services, for both the taxpayer and registered…  Read more

Federal Budget 2022: What it means for you

Treasurer Josh Frydenberg has released the 2022 Federal Budget ahead of a Federal election in a few months. This article has a summary of the “Winners and Losers” of the Budget and we’ve compiled a recap of the key points below. Get in touch with us if you have any questions. A Quick Overview Due to soaring fuel prices, the fuel excise tax will be cut in half, saving motorists…  Read more

Immediate Deductions Extended

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

Are Your Contractors Really Employees?

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

The ATO’s Attack on Trusts and Trust Distributions

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

Year of the Tiger: Roaring or Bellowing?

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

Pandemic Leave Disaster Payments rules change

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

Professional Services Firm Profits Guidance Finalised

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

2022: The year ahead

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

E-invoicing: A Huge Cashflow Win for Australian Businesses

The Australian government has made some important announcements over the past few months with regard to e-invoicing. In the 2021-22 Budget, the government committed $15.3 million to increase the adoption of e-invoicing, which guarantees accelerated payment terms. In this article, we will look deeper into what e-invoicing is and how any type of business can benefit from it. What is e-invoicing? Over 1.2 billion Business to Business (B2B) and Business…  Read more

The ‘Backpacker Tax’ and the High Court

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

The top Christmas tax questions

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

If Santa was an Australian tax resident

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

Tax and the Normalisation of Cryptocurrency

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

Did your super fund receive a compensation payment?

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

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