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Eligible businesses can claim loss carry back tax offset

Businesses who received JobKeeper and profited repay funds

Third JobMaker Hiring Credit ends October 31


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A Video Update from
Forrester Korfiatis

ATO collects cryptocurrency trading data

The Australian Taxation Office cryptocurrency data-matching program has been in place since April 2019. Under the program, the ATO collected data on cryptocurrency transactions for the 2014-15 through the 2019-20 financial years, and will continue with the same protocol for the next three financial years. Because cryptocurrencies operate independently of central banks, central authorities, or government, the ATO obtains data relating to cryptocurrency transactions and account information from designated service providers. The data obtained will be used to identify the buyers and sellers of crypto-assets and quantify the related transactions. This data is matched against ATO records to identify individuals who may not be meeting their registration, reporting, lodgement and/or payment obligations.

UPCOMING KEY DATES

October

21 October
Pay annual PAYG instalment notice (Form N). Lodge only if you vary the instalment amount or use the rate method to calculate the instalment.
Lodge and pay quarter 1, 2021–22 PAYG instalment activity statement for head companies of consolidated groups.
Lodge and pay September 2021 monthly business activity statement.

28 October
Lodge and pay quarter 1, 2021-22 activity statement if electing to receive and lodge by paper and not an active STP reporter. Pay quarter 1, 2021–22 instalment notice (form R, S, or T). Lodge the notice only if you vary the instalment amount.
Make super guarantee contributions for quarter 1, 2021–22 to funds by this date.
 
Employers who do not pay minimum super contributions for quarter 1 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement – quarterly (NAT 9599) by 28 November 2021.
 
Lodge and pay annual activity statement for TFN withholding for closely held trusts where a trustee withheld amounts from payments to beneficiaries during the 2020–21 income year.

31 October
Final date to add new clients to your client list to ensure their 2021 tax return is covered by the lodgment program.
 
Lodge tax returns for all entities if one or more prior year returns were outstanding as at 30 June 2021.
 
If all outstanding prior year returns have been lodged by 31 October 2021, the lodgment program due dates will apply to the 2021 tax return.
 
SMSFs in this category must lodge their complete Self-managed superannuation fund annual return by this date.
Lodge and pay Self-managed superannuation fund annual return (NAT 71226) for (taxable and non-taxable) new registrant SMSF if we have advised the SMSF that the first-year return has a 31 October 2021 due date.

Lodge tax return for all entities prosecuted for non-lodgment of prior year returns and advised of a lodgment due date of 31 October 2021:
Some prosecuted clients may have a different lodgment due date – refer to the letter you received for the applicable due date.
Payment (if required) for individuals and trusts in this category is due as advised in their notice of assessment.
Payment (if required) for companies and super funds in this category is due on 1 December 2021.
 
SMSFs in this category must lodge their complete Self-managed superannuation fund annual return (NAT 71226) by this date.
 
Lodge Annual investment income report (AIIR).
Lodge Departing Australia superannuation payments (DASP) annual report.
Lodge Franking account tax return when both the:
return is a disclosure only (no amount payable)
taxpayer is a 30 June balancer.
 
Lodge PAYG withholding annual report no ABN withholding (NAT 3448).
Lodge PAYG withholding from interest, dividend and royalty payments paid to non-residents – annual report (NAT 7187). This report advises amounts withheld from payments to foreign residents for:
interest and unfranked dividend payments that are not reported on an Annual investment income report (AIIR)
royalty payments.
 
Lodge PAYG withholding annual report – payments to foreign residents (NAT 12413). This report advises amounts withheld from payments to foreign residents for:
entertainment and sports activities
construction and related activities
arranging casino gaming junket activities.
 
Lodge lost members report for the period 1 January – 30 June 2021.
Lodge TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries in quarter 1, 2021–22.

November

21 November
Lodge and pay October 2021 monthly business activity statement.
 
25 November
Lodge and pay quarter 1, 2021–22 activity statement if you lodge electronically.
 
28 November
Lodge and pay quarter 1, 2021–22 Superannuation guarantee charge statement - quarterly if the employer did not pay enough contributions on time.
 
Employers lodging a Superannuation guarantee charge statement - quarterly can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They still have to pay the remaining super guarantee charge.
 
Use our Super guarantee charge statement and calculator tool to work out the super guarantee charge and prepare the Superannuation guarantee charge statement – quarterly.


Re-contribution to super from COVID-19 early release allowed 

Individuals can now re-contribute amounts they withdrew under the COVID-19 early release of super program, without the amounts counting towards their non-concessional contributions cap. These contributions can be made until June 30, 2030. COVID-19 re-contribution amounts are not a new type of contribution. They’re a personal contribution that will be excluded from an individual’s non-concessional contribution cap. Individuals can make COVID-19 re-contribution amounts to any fund of their choice where the fund rules allow. The re-contribution amount cannot exceed $20,000.

Eligible businesses can claim loss carry back tax offset

Businesses must meet the following eligibility requirements to choose to carry back tax losses and claim the tax offset. Eligible entities will have made tax losses in the 2019-20, 2020-21 or 2021-22 income years; had an income tax liability for the 2018-19, 2019-20 or 2020-21 income years; or met their tax return lodgement obligations. The tax offset cannot be claimed in the company tax return 2020 for a tax loss made in the 2019-20 income year. It should instead be claimed in the company tax return 2021 or 2022.

Businesses who received JobKeeper and profited repay funds

By law, businesses that made a profit during the pandemic are entitled to pocket their JobKeeper subsidies. But public opinion suggests that those who turned a profit have an ethical obligation to repay the subsidies. Harvey Norman has repaid $6 million in JobKeeper payments after recording profits during the pandemic. Its statutory profit after tax jumped to $841.4 million – a record for the company. Federal government figures show that 157,650 businesses that received $4.6 billion in JobKeeper payments had increased their turnover between April and June last year compared with the same period the previous year. The number increased to 195,381 businesses that received $8.4 billion in JobKeeper payments in the July to September quarter. Toyota Australia voluntarily repaid $18 million to the Australian Tax Office earlier this year. Super Retail, which operates Rebel and BCF stores, handed back $1.7 million. Domain, which is majority-owned by Nine Entertainment Co, said it would pay back JobKeeper funds it had received. Luxury car dealer A.P. Eagers made a $218 million profit for the six months leading up to June 2021. Yet, it has failed to repay $130 million in JobKeeper subsidies. 

Contractor or Employee?

The difference between a contractor and an employee is not always clear cut. The courts and tax office take a number of factors into account when determining the actual status, such as hours worked, superannuation, method of payment and leave to name a few. Any written agreement stating the nature of the relationship is certainly relevant, but it’s not conclusive, and should not be relied solely upon. Both employers and contractors need to be fully aware of their situation as serious penalties are involved with sham contracting arrangements. Find out more here.

"Holiday home" included in tax concession test

A taxpayer company has been unsuccessful before the Administrative Appeals Tribunal (AAT) in a claim to secure the capital gains tax (CGT) concessions for small businesses.

In this case, the AAT affirmed the Commissioner's decision that the taxpayer did not satisfy the "maximum net asset value" test for the purposes of qualifying for the concessions. The AAT found that the individual who controlled the company could not exclude from the test his interest in a Queensland property, which he claimed was used for "personal use and enjoyment".

TIP: The small business CGT concessions are intended to offer small business taxpayers a range of unique tax concessions. However, despite being targeted towards taxpayers who typically have less complicated affairs, the rules are riddled with complexities that may not appear obvious at first glance.

Each concession has its own particular rules. However, there are two basic conditions for the relief - either the taxpayer is a small business entity (SBE) or is a partner of a partnership that is an SBE, or the taxpayer satisfies the maximum net asset value test. If you have any questions, please contact our office.

Small business benchmarks catch out florist

The AAT has recently dismissed an appeal by a florist against the Tax Commissioner's decision to issue income tax and GST assessments following an ATO audit of her florist business.

The taxpayer had reported that the cost of goods sold in her business represented 83% of her reported business income. The ATO had selected the taxpayer for audit because this figure was outside what it considered to be the industry benchmark range of between 44% and 54%.

In this case, the taxpayer was unable, due to a lack of evidence, to prove to the AAT that the assessments were excessive.

TIP: The Tax Commissioner has warned that businesses operating outside the relevant benchmarks could be subject to ATO review and/or audit, and where the businesses do not have adequate records to substantiate their performance, the ATO will make a default assessment using the appropriate small business benchmark.

Businesses may want to consider reviewing their record-keeping practices and assess whether they are at risk of an audit. Please contact our office for further information.

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