Business leaders should turn their attention to how they plan on managing the government’s increase to the superannuation guarantee, set to come into effect from 1 July, to avoid penalties, says one tax expert.
An increase to the superannuation guarantee (SG) is set to go ahead from 1 July which will see the base rate rise from 9.5 per cent to 10 per cent, followed by incremental half percentage point increases each year to 12 per cent on 1 July 2025.
As tax time looms, the ATO has pointed to four key ineligible work-from-home claims it will be watching closely as taxpayers look to make the most of flexible working arrangements.
The ATO on Thursday urged all taxpayers to be aware that, while the temporary shortcut method will remain available to those claiming work-from-home deductions this year, personal and occupancy expenses, among others, cannot be claimed through any method.
The Morrison government has introduced a suite of concessions to single parents looking to buy their first home and those looking to invest in new builds, while bumping the cap on superannuation withdrawals under the First Home Super Saver Scheme.
The federal government on Saturday announced new incentives for first home owners off the back of its HomeBuilder program which are set to benefit 120,000 eligible Australians and kick-start more than $30 billion worth of residential construction.
The government has made an extension on the temporary reduction in superannuation minimum drawdown rates.
In a speech to the Liberal Party federal council meeting in Canberra on Saturday, Prime Minister Scott Morrison revealed the government had extended the 50 per cent temporary reduction in superannuation minimum drawdown requirements for a further year to 30 June 2022.
A new email scam targeting myGov and myGovID users has been uncovered, with the ATO warning people to steer clear from clicking on any links. The scammers masquerade as representatives from the “myGov customer care team” and are emailing people and asking them to update their myGov or myGovID details.
The FMD Scheme assists primary producers to deal more effectively with fluctuations in cash flows. It is designed to increase the self-reliance of Australian primary producers by helping them manage their financial risk and meet their business costs in low-income years by building up cash reserves. The scheme allows eligible primary producers to set aside pre-tax income which they can draw on in future years when they need it, such as for restocking or replanting when conditions start to improve.
This month we wish Brian a very Happy Birthday. We also congratulate Dee, Andrew and Gabi for bring up significant service anniversaries (25, 28 & 24 years respectively)!
Important ATO Dates
April monthly activity statements
May monthly activity statements
End of financial year – Start preparing STP Finalisation Report
Circuit Breaker Business Support Package
The Victorian Government has launched the $250 million Circuit Breaker Business Support Package to assist small to medium businesses and sole traders.
The package includes:
a $190.01 million second round of the Business Costs Assistance Program
a $40.7 million new round of the Licensed Hospitality Venue Fund
$20 million in targeted support for the events industry.
Single Touch Payroll (STP) is a new way of reporting tax and super information to the ATO. Using payroll software or another STP solution you will send your employees’ salary and wage information, pay as you go (PAYG) withholding and super information to the ATO each time you pay your employees.
Closely held payees 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
Your Obligations from 01/07/2021 If you only have closely held payees then you are required to start STP reporting from 1 July 2021, amounts paid to closely held payees must be reported through STP enabled software in any of the following ways:
Report actual payments on or before the date of payment
Report actual payments quarterly when your activity statement is due
Report a reasonable estimate quarterly when your activity statement is due
Note: You will be required to make Superannuation Guarantee contributions quarterly by the 28th of the following month to avoid SGC liabilities and General Interest Charges (even if using the quarterly estimate method). Also, you are still required to report STP each pay day for your arm’s length employees!
How to calculate the reasonable estimate amount With closely held payees you may need to estimate the pay amounts. The methods for estimating a reasonable amount includes:
Withdrawals taken by the payee. (Do not include payments of dividends or payments which reduce liabilities owed by the business to the closely held payee).
Calculating 25% of the total salary or director fees from the previous year (or year of the last lodged tax return of the closely held payee).
Vary the previous years’ amount of the total salary or directors’ fees up or down by 15% to take into account current trading conditions.
How to lodge the quarterly STP report The quarterly STP report needs to be lodged through an STP-enabled solution which must be registered with the ATO. You can either lodge the report yourself or have your registered agent lodge on your behalf. Please note that the STP report can’t be lodged through ATO portals. It is not an additional label on your activity statement.
Finalisation declaration due dates If you report for your closely held payees on a quarterly basis, you will have up until the due date of your income tax return to make your finalisation declaration. Finalisation is still required by 14 July for all arms-length employees.
Need Help? Looking for a cost effective STP compliant software option? We recommend and use Keypay (https://www.keypay.com.au/) but can advise on other popular options. Alternatively, we can process the STP reporting on your behalf for a nominal fee.
The team at Watts Price Accountants & Knights Accounting are here to help, you can contact us at: Watts Price Accountants 03 5382 3001 or firstname.lastname@example.org Knights Accounting 03 5385 5330 or email@example.com
It’s not too late to be thinking about Tax Planning. With 30 June just around the corner we encourage you to think about applying legitimate tax strategies now to minimise your tax obligation.
To book an appointment please contact our team:
Watts Price Accountants
P: 03 5382 3001
P: 03 5385 5330
Please be aware that our office in Horsham (Watts Price Accountants) and Knights Accounting in Rupanyup will be closed from tomorrow (Fri 28 May) and hopefully re-opening Friday 4th June due to the new 7 day COVID lockdown.
We will still be conducting Tax Planning appointment by Zoom or telephone and assisting with other matters via phone or email.