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Downsizer contributions to SUPER

19 June 2022

Did you know you could invest the proceeds of the sale of your family home to your superannuation, depending on your age and circumstances?

What is a downsizer contribution?

From 1 July 2022, if you’re aged 60 years or older you may be eligible to make a downsizer contribution of up to $300,000 (or $600,000 for a couple) to your superannuation fund from the proceeds of the sale of your home where specific requirements are met.

Downsizer contributions can be a great way of boosting your superannuation after retirement.  As well as the extra capital they introduce, the contributions can also earn investment income that is either tax-free if you commence an income stream with the funds or be taxed at a concessional tax rate of up to 15% whilst in accumulation phase.

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Four priorities for the ATO this Tax Time

8 June 2022

In the middle of May, the ATO announced that there will be four focus areas on their radar during Tax Time 2022 – record-keeping, work-related expenses, rental property income and deductions, and capital gains from crypto assets. It is reminding taxpayers that there are three golden rules when claiming a deduction:

  1. You must have spent the money yourself and weren’t reimbursed
  2. If the expense is for a mix of income producing and private use, you can only claim the portion that relates to producing income, and
  3. You must have a record to prove it.

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2022 Election Washup

8 June 2022

Following the election of the new Labor federal Government on 21 May, there are a number of tax and superannuation proposals that they have announced or existing measures they have committed to that may impact you and your business moving forward.

Some of course are subject to the passage of enabling legislation through the new Parliament.

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Single Touch Payroll 2: The time has come

9 April 2022 

In the May 2019 Federal Budget, the Government announced that Single Touch Payroll (STP) would be expanded to include additional information, building on the first stage of STP which was made compulsory for most employers from 1 July 2019.

For background, the STP regime is a government initiative which is designed to reduce an employer’s burden when reporting to Government agencies such as the ATO. Under the regime, employers report employee payroll information to the ATO each time they are paid via STP-enabled software.

Start date

The start date for Phase 2 reporting was 1 January 2022, however the ATO has advised that employers who provide the additional reporting required under Phase 2 by 1 March 2022 will be accepted as having met the deadline.

Digital service providers (DSPs) can apply for a deferral if they need more time to make changes and update their solutions. Such a deferral then automatically applies to customers of that provider. For example, Xero have advised that they have been granted a deferral until 31 December 2022. This means that all customers using Xero Payroll will also have until that date to report their first STP Phase 2 pay run. Check with your provider if a deferred start date applies.

For businesses that need more time to transition, you may apply for an extension beyond your software provider’s deferral. Registered accountants and bookkeepers will also be able to apply on your behalf.

On the compliance front, under Phase 2, genuine reporting mistakes will not be penalised in the first year until 31 December 2022.

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FBT Year-End Checklist

9 April  2022

March 31 marks the end of the 2021/2022 fringe benefits tax (FBT) year which commenced 1 April 2021. It’s time now for employers and their advisors to turn their attention to instances where non-cash benefits have been provided to employees, and also where private expenses have been paid on their behalf.

Although it will generally fall to your accountant to prepare the FBT return, it may not always be apparent to them from your software file or other records, all of the instances where you have provided employees and their associates (e.g. spouse) with a potential fringe benefit. To assist you in bringing these potential benefits to the attention of your accountant, following is a general checklist (non-exhaustive):

Cars

  • Did you provide or make available a car that your business (or an associate of the business) owned or leased, to an employee or their associate for private purposes?

Exemptions include minor, infrequent and irregular non-work-related use by an employee of certain commercial vehicles.

  • Did you as an employer reimburse expenses of an employee in relation to a car they owned or leased?

Exemptions include where the business compensates the employee on a cents per km basis for estimated travel and where the car has not been used for private purposes.

Loans

  • Did your business provide a loan to an employee or their associate?

Exemptions include where the loan is strictly related to meeting an employment expense (which must be incurred within sixth months of the loan being made).

Exemptions also include loans made by private companies to employees who are also shareholders but the loan is Division 7A compliant.

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RAT and PCR Tests – favourable tax treatment for employers

3 March 2022

Some good COVID-19 news (at least on the tax front) for employers!

Ever since the arrival in Australia of the Omicron variant in late 2021, the recommended test for detecting COVID has been the rapid antigen test (RAT). Indeed, for some employees, returning a negative RAT has been an ongoing condition of returning to work. As a result, there has been a massive buy up of these tests by both employers, employees and by others – often at significantly marked up rates. On the tax front, relief is now at hand!

Announcement

In a press release dated 8 February 2022, the Assistant Treasurer announced that COVID‑19 tests (including Polymerase Chain Reaction (PCR) and Rapid Antigen Tests (RATs)) are now tax deductible, and exempt from FBT for employers, where they are purchased for work‑related purposes. This will apply both when an individual is required to attend the workplace or has the option to work remotely.

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On-boarding new employees

3 March 2022

With Australia now opening back up after the COVID restrictions, unemployment is tipped to fall to the lowest rate in just over 50 years – down to under 4%. If over the coming period you hire new staff, there are certain steps you should follow to cover off on your tax, workplace, and superannuation obligations.

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COVID-19 SA Business Support Grants Update

31 January 2022

Further to our previous correspondence regarding SA Government support for COVID affected businesses, as at 29 January 2022, further grants have been released. In addition to the grants available for the period 27 December 2021 to 9 January 2022 (inclusive), there is now additional support relating to the turnover period 10 January 2022 to 30 January 2022 (inclusive).

The additional grants available, tabled under the Grant Program “Additional Round (January 2022)” include:-

  • Tourism, hospitality and gym grant
  • Business hardship grant
  • Major events grant
  • Payroll tax relief

Who can access the grants?

Tourism, hospitality and gym grant

  • Turnover based payment
    • A 30% reduction in turnover during the period 10 January 2022 to 30 January 2022 (inclusive) comparable to 3 weeks in 2019-20 (or 2020-21 for those businesses that did not trade in 2019-20) as specified by the grant conditions.
    • The grants available are up to $22,000 dependent on your business
    • Please note successful recipients of the Tourism, Hospitality and Gym Grant – turnover based payment- December 2021 (relating to turnover in the period 27/12/2021 to 09/01/2022), will automatically receive payment under the Tourism, Hospitality and Gym Grant – Additional Round – January 2022. If your business has not submitted an application for the Tourism, Hospitality and Gym Grant – turnover based payment – December 2021, whether or not you have received an automatic payment, you MUST SUBMIT AN APPLICATION for this grant.
    • Additionally, if you are eligible for this grant and were not able to claim the previous grant (December 2021) as you may not have previously been eligible, an application needs to be completed before the closing date (31 March 2022).
    • Applications and the all-important guidelines will be available on 14 February 2022 with further information to come.

Business hardship grant

  • Turnover based payment
    • A 50% reduction in turnover during the period 10 January 2022 to 30 January 2022 (inclusive) comparable to 3 weeks in 2019-20 (or 2020-21 for those businesses that did not trade in 2019-20) as specified by the grant conditions. The grants available are up to $8,000 dependant on your business.
    • Please note successful recipients of the Business Hardship Grant – turnover based payment- December 2021 (relating to turnover in the period 27/12/2021 to 09/01/2022), will automatically receive payment under the Business Hardship Grant – Additional Round – January 2022. If your business has not submitted an application for the Business Hardship Grant – turnover based payment – December 2021, whether or not you have received an automatic payment, you MUST SUBMIT AN APPLICATION for this grant.
    • Additionally, if you are eligible for this grant and were not able to claim the previous grant (December 2021 as above) as you may not have previously been eligible, an application needs to be completed before the closing date (31 March 2022).
    • Applications and the all-important guidelines will be available on 14 February 2022 with further information to come.

Major events grant

  • Requires proof of non-recoverable financial loss due to an event being cancelled/postponed during the impacted period (27 December 2021 to 31 March 2022 (inclusive)
  • There are various criteria to meet to be eligible for this grant
  • The grants available are up to a maximum of $100,000 dependant on the event cancelled/postponed
  • An application needs to be completed before the closing date

Payroll tax relief

Tourism, hospitality, gyms and other eligible businesses impacted by the trading restrictions in place from 27 December 2021 may apply to RevenueSA for a deferral of payroll tax due over the period from January 2022 to June 2022, with these deferred payments due from July 2022.

Further information is available at https://www.revenuesa.sa.gov.au/grants-and-concessions/covid19-relief

A good summary of the SA Government COVID-19 Business Support Grants can be found here