July 2020 Newsletter

Contents:

  • Will a court ruling see the demise of casual workers?
  • $150k instant asset write-off extended for 6 months
  • Tax time 2020: ATO cautions early lodgers
  • Should you buy property with family and friends?
  • Do’s and don’ts of the HomeBuilder scheme
  • Understanding illegal phoenixing and directors’ personal exposure
  • Announcements

Will a court ruling see the demise of casual workers?

A court ruling that allows “permanent casual” staff entitlements, including sick and holiday pay, could deter businesses from hiring new staff, according to new research. Analysis by Roy Morgan shows the Federal Court’s ruling on casual staff will have an impact on 794,000 businesses in Australia, leaving one in three having to seriously consider staffing needs.
 
 

$150k instant asset write-off extended for 6 months

The instant asset write-off threshold of $150,000 for businesses with an aggregated turnover of less than $500 million will now be extended to 31 December 2020.
 
The extension, estimated to cost $300 million over the forward estimates period, will be available to around 3.5 million businesses.
 

Tax time 2020: ATO cautions early lodgers

The Tax Office has urged taxpayers to wait until the end of July to lodge their tax returns to minimise their risk of making mistakes. Accountants have begun bracing for a “horrendously busy” tax time this year as individual clients are expected to lodge early to get their hands on potential refunds as soon as possible.  
 
 

Should you buy property with family and friends?

Record-low interest rates and a fear of missing out on COVID-19 buying opportunities are leading many Australians to consider pooling resources together to buy a house. For the first time in almost a year, house prices have slightly fallen for the month of May, leading investors to consider it a good time to buy property.
 
 

Do’s and don’ts of the HomeBuilder scheme

A buyer’s agent is urging anyone looking to capitalise on the Australian government’s HomeBuilder scheme to start the process immediately, and weighed in on the types of projects offering owners the most bang for their 25,000 bucks. According to EPS Property Search’s Patrick Bright, “six months is not much time to finalise renovation plans – particularly those where you need council approval to commence works – so it’s important to get started quickly so you don’t get caught short of time”.

Understanding illegal phoenixing and directors’ personal exposure

With so much attention firmly focused on COVID-19 and the effect it’s having on business operations, we’re concerned directors could find they inadvertently neglect certain responsibilities — or put them on the back burner until they have the time to deal with them. But such action is unwise, especially in light of new director responsibilities following the passing of the illegal phoenixing bill in February.

Announcements:

This month we wish a Happy Birthday to Joanne & Paula and congratulate Brian on achieving 30 years service at Watts Price Accountants.
 
Joanne Dreckow Paula Toll  
Brian Watts    
 

Important Notice for All Employers

As the 2019 – 2020 financial year draws to a close, employers need to be aware of their obligation to lodge a Finalisation Report by July 14, 2020 (for employers with 20 or more employees). All employers will need to: Use their STP solution to ensure the Finalisation Report is lodged no later than 31 July 2020 (for employers with 19 or fewer employees) and inform their employees that:
  • They will not be issued with a payment summary
  • They can access their salary information via their myGov account via the ‘Income Statement’
  • Let employees know that they should not lodge their tax return until their status reads ‘Tax Ready’ (check myGov or ask your accountant)

NB: Employers that started doing their own STP reporting this year must use STP to provide a Finalistation Report, i.e. no paper forms will be accepted (as in previous years)!

Where Watts Price Accountants or Knights Accounting process your STP obligations:

  • We will be in touch this month to get the relevant employee wage information from you
  • You will need to provide us with a total by employee of the wages paid to date for the year
  • You will need to sign and return to us a ‘STP Finalisation Authorisation to Act’ form to allow us to process the finalisation on your behalf
  • Note: If you will not be paying any more wages between now and the end of the month please let us know
For more information see our Blog post or call us in Horsham (03) 5382 3001 or Rupanyup on (03) 5385 5330. NB: Single Touch Payroll for Closely Held Payees If you only have closely held payees then you are not required to start STP reporting until 1 July 2021. A closely held payee is one who is not at arm’s length. This means they are directly related to the entity from which they receive payments, for example:
  • family members of a family business
  • directors or shareholders of a company
  • beneficiaries of a trust

 


Superannuation Guarantee Amnesty 

On 6 March 2020 the government introduced a superannuation guarantee (SG) amnesty (the amnesty). The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018. Eligible disclosures will not incur the administration component ($20 per employee per quarter) or Part 7 penalty.

In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible.

Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again.

Employers who come forward from 6 March 2020 need to apply for the amnesty by 7 September 2020.

The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If we identify these employers before they come forward, they will not be eligible for the benefits of the amnesty. They will also be required to pay:

  • SG shortfall
  • nominal interest (10%)
  • administration component ($20 per employee per quarter)
  • Part 7 penalty (up to 200% of the SGC).

In addition, payments of the SGC won’t be tax deductible.

Paying super is an important part of being an employer. If you’re not eligible for the amnesty, or you have unpaid super for quarters that are not eligible, you must still lodge an SGC statement.

Source: https://www.ato.gov.au/business/super-for-employers/superannuation-guarantee-amnesty/
 
If you need any assistance in applying or calculating the SG Amnesty please contact our office, on 5382 3001 (Horsham) or 03 5385 5375 (Rupanyup).
 
All the best from the Watts Price Team!