Increased ATO Audit Activity – Proactive Steps to Consider

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By Chris Smith

As the COVID-19 stimulus measures start to wind up, the ATO is re-commencing audit activity.

We have already seen a substantial increase in payment demands as well as the commencement of some early stage ATO audits.

It is also worth noting the Federal Budget has recently provided the ATO with increased funds to focus on:

  • 5,000 high wealth private groups – net wealth >$50m
  • Medium and emerging private groups – net wealth >$5m

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Christmas – the FBT, Tax and GST Consequences to be aware of

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By Chris Smith

With the festive season almost in full swing, it’s important to be aware of the tax implications of providing your employees with gifts, and throwing the end of year team function.

Depending on the type of gift or entertainment provided, the business will have different Fringe Benefits Tax (FBT), Tax and GST consequences.

A table has been provided below to help navigate these complex rules.

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Government Stimulus

Federal Budget – Key Takeaways

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Federal Budget – Key Takeaways

On 6 October, the Government released the Federal Budget for 2020/21.

It was a budget designed to stimulate the economy and create new jobs. Below is a summary of the key takeaways and some planning opportunities all business owners should consider taking advantage of.

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Government Stimulus

JobKeeper 2.0 – Changes to the JobKeeper Payment

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JobKeeper Extended

The Federal Government has announced that the JobKeeper scheme will be extended to 28 March 2021.  It was previously scheduled to end on 27 September 2020.  There will be changes to both the eligibility requirements and payment amounts.

  • The fortnightly payment of $1,500 will be reduced to $1,200 from 28 September 2020 and $1,000 from 4 January 2021.
  • A new two-tiered payment structure will be introduced from 28 September 2020, which will reduce the payment rates for employees who worked fewer than 20 hours per week in February 2020.

The eligibility rules for employees remain unchanged.  Particularly noting that the employees must have been employed as full-time, part-time or long-term casual (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020.

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Reduce Tax

Key Actions That Business Owners Should Take Before 30 June to Reduce Tax

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By Chris Smith

For businesses to maximise their cash position, they should consider the following tax planning opportunities before 30 June.

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Government Stimulus

Details of the JobKeeper Payment – eligibility, how to enrol & critical deadlines

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On 21 July the government announced proposed changes to JobKeeper including an extension through to 28 March 2021.  Read our summary of these updates here, or visit the ATO’s website for further details.

From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID.  You must do this by the end of May to claim JobKeeper payments for April.  Payments will start being made to businesses in May.

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Christmas Fring Benefits

Christmas Fringe Benefit Tax (FBT) reminder

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With Christmas fast approaching, it is usually the time of year where employers provide gifts or throw parties for their employees.

Follow this link to our article, which includes examples of how Fringe Benefits Tax (FBT) rules are applied and in some cases minimised, while also considering the other tax and GST rules to be aware of.

Please contact our office if you have any questions about FBT.

Tax Consolidating SME Groups

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There is a common understanding that the tax consolidation regime is for the “big end of town” only.

Whilst tax consolidation does feature in the tax structuring of larger corporations, the tax consolidation regime is not only for the big end of town, but can be effectively used by Small to Medium Enterprise Groups (“SME”), the minimum requirement to form a tax consolidated group being a resident company with at least one wholly owned subsidiary company (or unit trust).

The tax consolidation regime treats the members of a consolidated group as a single entity for income tax purposes.  This means that intra-group transactions are ignored for income tax purposes and the group lodges only one income tax return for each income year.   Therefore, whilst tax consolidation is a choice, for many SME corporate groups it will be a practical necessity.

Some of the benefits that result from tax consolidating include the following:
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Fringe Benefits Tax (FBT) and Salary Packaging

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The 2011 Federal budget signaled significant changes to the way Fringe Benefits Tax will be calculated on the use of motor vehicles. Traditionally, motor vehicles have formed an essential part of many remuneration packages and it was initially feared that the changes to the legislation would make it prohibitive for employers to use this carrot to entice and retain employees. However, closer analysis suggests that there continues to be scope to tax effectively package motor vehicles into employee’s salary under the new regime.  Read more

Special Circumstances Found To Set Aside Excess Contributions Tax

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A taxpayer has successfully argued before the AAT that there were special circumstances in his situation to allow for the exercise of the Commissioner’s discretion under the law to reallocate  superannuation contributions.

Accordingly, monies paid into his superannuation account in late July 2009 could be attributed to the 2008-2009 financial year, and this meant that the taxpayer would not exceed the (then) $50,000 contributions cap. Read more

tax planning

Tax Planning

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 There are many ways in which taxpayers can take advantage of tax planning initiatives to manage their taxable incomes. In order to maximise these opportunities, taxpayers need to start the year-end tax planning process early. Of course, when undertaking tax planning, taxpayers should be cognisant of the potential application of anti-avoidance provisions. However, if done correctly, tax planning can provide possible tax savings.

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Electronic Lodgment and Payment Requirement for Business with More Than $20m Turnover

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The ATO advises that business with a GST turnover that meets or exceeds the electronic lodgment turnover threshold of $20 million are legislatively required to: Read more

ATO Taskforce To Target Trust Structures

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In the 2013–2014 Federal Budget, the ATO was provided with $67.9 million over four years to undertake compliance activity in relation to trust structures.

The taskforce will utilise intelligence systems as well as new tax return labels to gather information. Read more

The Big 10…

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Below are 10 actions business owners need to take prior to 30 June to reduce their tax bill;

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Are You Ready For Electronic Lodgement of Activity Statements?

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Are you ready for the ATO’s changes that require electronic lodgement of Activity Statements?

From 1 July 2014, once the ATO receives an electronic lodgement of a Business Activity Statement or Instalment Activity Statement they will no longer send the paper statements. Future statements will be issued electronically.

Electronic lodgement includes through the following sources: Read more

Tax Effective Estate Planning – SMSF

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Superannuation is now commonly the most significant asset of an individual after the main residence and as a result is increasingly important when putting together a tax effective estate plan.

What is not commonly known is that superannuation interests do not automatically fall under the individual estate assets on death and therefore do not automatically fall under the directions of your will. Read more