May 2021 Newsletter

Contents:

  • ATO Commences SMS Debt Reminders
  • ATO Turns on Online Services for Business
  • Pro’s and Con’s of Working in the Gig Economy
  • AFSA Spells Out the Consequences of Bankruptcy
  • 7 Reasons you can Access Superannuation Early
  • Assessing Equity in the Family Home
  • Announcements

ATO Commences SMS Debt Reminders

Taxpayers falling behind on tax debts and lodgement obligations can soon expect contact from the ATO as it confirms the resumption of its compliance activities in the wake of JobKeeper ending.
 
With the JobKeeper program officially over, the Tax Office has now confirmed that it will resume pursuing and enforcing debt recovery action.
 

ATO Turns on Online Services for Business

The ATO has flicked the switch on its new Online services for business, officially replacing its existing Business Portal.

The change makes Online services for business the ATO’s default service for businesses that interact directly with the ATO online, with businesses and self-managed super fund auditors now able to access the new service through their myGovID.

Pro’s and Con’s of Working in the Gig Economy

The appeal of the gig economy comes from its promise of flexibility, freedom and financial stability. But what are the downsides to working as a freelance worker?
Gone are the days when the only source of income came from being a full-time employee. The gig economy has opened up a world of opportunity for those who want to use their skills to earn extra cash outside of their full-time job or want to be in full control of their work hours while being financially stable. 
 

AFSA Spells Out the Consequences of Bankruptcy

Although bankruptcy can provide relief if you are unable to repay your debts, there are consequences which may affect you. Being aware of these consequences can help you decide if this is the best option for you.

 

7 Reasons you can Access Superannuation Early

Following the government’s early access to super scheme closing, the ATO is reminding Australians of the sevens ways they can still access their superannuation early.
Under the government’s temporary early access to super scheme, individuals and sole traders who had suffered financial hardship of at least 20 percent due to loss of work or hours were enabled access to up to $10,000 from their superannuation retirement savings in the 2019-2020 financial year.
 

Assessing Equity in the Family Home

As Bernard Salt’s article in Firstlinks on ‘the 2020s baby boom retirement surge‘ pointed out, Australians retiring today have never been healthier, better educated or longer living. There is an increasing emphasis amongst retirees on quality of life in retirement and maintaining a standard of living commensurate with their pre-retirement lifestyle.

This generation has also had the benefit of rising property values over recent decades, with the consequence that a large proportion of their wealth resides in the family home.

 

Announcements:

This month we wish Lyndel a very Happy Birthday. We also congratulate Margaret on 10 years service!

Lyndel Delahunty

   
   

Important ATO Dates


Lodgement Program Due Date
Quarter 3 (January–March) PAYG instalment notices (forms R and T) 28/04/2021
Quarter 3 (January–March) GST instalment notices (forms S and T) 28/04/2021
Quarter 3, (January–March) super guarantee contributions 28/04/2021
Fringe benefits tax (FBT) return – Final date for lodgment and payment if required 21/05/2021
April monthly activity statements 28/05/2021
 

Single Touch Payroll for Closely Held Payees

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:

  1. Report actual payments on or before the date of payment
  2. Report actual payments quarterly when your activity statement is due
  3. 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 mail@wattsprice.com.au

Knights Accounting             03 5385 5330 or info@knightsaccounting.com.au

 

Useful link:

https://www.ato.gov.au/Business/Single-Touch-Payroll/Concessional-reporting/Closely-held-payees/



Farm Safety Rebate Scheme

The Victorian Government (through Agriculture Victoria) has provided an opportunity to improve safety outcomes on farms with the establishment of the Farm Safety Rebate Scheme.

Rebates of up to $5,000 excluding GST are available with at least 50% co-contribution to assist eligible farm businesses within Victoria to invest in infrastructure and equipment to improve safety for farming families, workers and visitors to Victorian farms.

Only one rebate payment is permitted, and all eligible claims must be included on your Application Form.

The availability of rebates is subject to funds being available. No rebates will be offered beyond the allocated total Victorian Government funding of $3 million (ex GST).

Applications open 25 February 2021 and close on 31 December 2021, rebates are available until the closing date or when program funds are fully allocated, whichever is sooner.

 

To find out more visit: https://www.ruralfinance.com.au/industry-programs/farm-safety-rebate-scheme

Application Form: https://www.ruralfinance.com.au/uploads//grant_files/farm-safety-rebate-application-form.pdf

Farm Safety Rebate Scheme Guidelines: https://www.ruralfinance.com.au/uploads//grant_files/farm-safety-rebate-guidelines.pdf


Tax Planning

It’s not too early 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
E: mail@wattsprice.com.au
 
Knights Accounting
P: 03 5385 5330
E: info@knightsaccounting.com.au
 
 
 
All the best from the Watts Price Team!