ATO and Fair Work receive JobKeeper tip-offs
Centralised business register requires DIN
JobKeeper 2.1 introduces changes
On The Money - Episode 43
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The 2020-2021 budget, announced October 6, focuses on tax relief and job creation in an effort to mitigate the effects of the COVID-19 pandemic. $14 billion will be invested in new and accelerated infrastructure projects over the next four years. The Government is delivering an additional $17.8 billion in personal income tax relief to support the economic recovery, including an additional $12.5 billion over the next 12 months. Individuals will benefit from tax cuts in Stage 2 of the Personal Income Tax Plan being brought forward, as well as a one-off additional benefit from the low- and middle-income tax offset in 2020-21. First home buyers will get extra incentives to purchase a newly built home with a deposit as low as 5%. The new JobMaker Hiring Credit incentivises businesses to hire employees between 16 and 35 years old, costing $4 billion from 2020 to 2023. The 2020-21 Budget brings the Government's overall support to $507 billion, including $257 billion in direct economic support.
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, 2020–21 PAYG instalment activity statement for head companies of consolidated groups.
Lodge and pay September 2020 monthly business activity statement.
Lodge and pay quarter 1, 2020–21 activity statement if electing to receive and lodge by paper and not an active STP reporter. Pay quarter 1, 2020–21 instalment notice (form R, S, or T). Lodge the notice only if you vary the instalment amount.
Make super guarantee contributions for quarter 1, 2020–21 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 2020.
Lodge and pay annual activity statement for TFN withholding for closely held trusts where a trustee withheld amounts from payments to beneficiaries during the 2019–20 income year.
Final date to add new clients to your client list to ensure their 2020 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 2020.
If all outstanding prior year returns have been lodged by 31 October 2020, the lodgment program due dates will apply to the 2020 tax return.
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 2020 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 2020:
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 2020.
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)
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 2020.
Lodge TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries in quarter 1, 2020–21.
Lodge and pay October 2020 monthly business activity statement.
Lodge and pay quarter 1, 2020–21 activity statement if you lodge electronically.
Lodge and pay quarter 1, 2020–21 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.
The ATO will start contacting individual trustees or members of Self-Managed Superannuation Funds when the fund's details are updated at the ATO. This alert is designed to safeguard retirement savings and reduce the risk of fraud by advising SMSF trustees when the ATO believes it has received changes to the SMSF details it holds. The ATO’s alert will be sent directly to the SMSF trustee’s email account and/or via SMS to their mobile phone number. It’s generated automatically when the ATO processes the SMSF’s annual return, and there is a change in the SMSF details. Changes that will trigger the alert include changes to the SMSF’s electronic service address or bank account details. The ATO Alert can also be generated when a fund’s details are updated on the Australian Business Register. The ATO alert does not provide any detail about what changes may have been made to the SMSF’s account. Please be aware this is not a hoax or scam and is a legitimate form of communication from the ATO.
The tax office and the Fair Work Ombudsman have received nearly 8,000 tip-offs relating to the JobKeeper scheme since it began in March. Tip-offs to the ATO relate to employers claiming workers are ineligible, denying some or all payment, threatening termination, stand-downs, or lower hours, or making unlawful changes to work arrangements. Information received through a tip-off is cross-checked and the ATO assesses whether further action is required – which may include educating the employer to better understand employee eligibility requirements and to rightfully include employees in JobKeeper claims. The ATO will work with employers to rectify any genuine mistakes, but will not tolerate any illegal exploitation of the government’s stimulus packages. Workers affected tend to be from the hospitality sector.
A new Commonwealth Business Registry will be established as a contemporary centralised business register. Every director will need to register to receive a permanent, unique director identification number, or DIN. The DIN regime should drive more efficient and cost-effective insolvencies, while also combatting illegal phoenixing, which costs Australia up to $5.1 billion every year. The new DIN regime will commence in the first half of 2021, and as soon as the regime becomes operational, a person who is appointed a director within the first 12 months of the new regime’s operation will have 28 days to apply for a DIN. However, after this transitional period ends, a director must apply for a DIN prior to being appointed as a director. Prior to this legislation, directors could have had multiple records within ASIC systems with minor variations of name, address or other personal details. Such incorrect information hindered regulators, insolvency practitioners and credit providers. The criminal and civil penalties for contravention of DIN requirements are broadly consistent with current penalties applicable to comparable provisions in the Corporations Act 2001 and the Corporations Act 2006. By way of example, the criminal penalties for a director applying for multiple DINs or misrepresenting a DIN could be 12 months imprisonment.
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.
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.
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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Disclaimer: This is not advice. Information provided in this bulletin may be in the form of summaries and generalisations - it may omit detail that could be significant in a particular context or to your personal circumstances. You should not act solely on the basis of material contained in this bulletin. Before you start any transactions, you should obtain appropriate professional advice relevant to your particular circumstances. Links to third-party websites are inserted for your convenience, but do not constitute endorsement of material at those sites or any associated product or service. Changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of the areas. The information in this bulletin is provided on the basis that all persons accessing the bulletin undertake responsibility for assessing the relevance and accuracy of its content.
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