Director identification numbers…time is running out

9 October 2022

All existing directors of a company, registered Australian body, registered foreign company, or a director of corporate trustees of an SMSF are required to apply for a director identification number (director ID) by 30 November 2022…so act now! If you are a director of an Aboriginal or Torres Strait Islander corporation (CATSI), you have an additional 12 months to apply to 30 November 2023.

To be clear, if you are currently a director, or plan to become one in the next 12 months, you’ll need a director ID.

Directors must apply for their director ID personally – we as your tax agent cannot apply on your behalf, but we can help you understand the new requirement, if you need to apply, and by when. Beat the rush and get your director ID online today.

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Scam myths

14 September 2022

In the past 12 months, the ATO has identified and taken action against 595 websites impersonating its online services. These fake sites are designed to steal passwords, personal information and identity documents, such as passports and driver licences.

Currently, the ATO is seeing many SMS and email scams leading to fake myGov sign-in pages –more than 360 of these scams have reported to the ATO since April 2022. However, there many different types of tax and super scams happening year-round, not just in the lead up to Tax Time.

Scammers are always looking for new ways to convince unsuspecting taxpayers into divulging personal information, such as bank details, usernames and passwords.

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Salary sacrificing to super

28 August 2022

Are you an employee thinking of putting some of your pre-tax income into superannuation to boost your retirement savings? This is known as salary sacrifice, and the good news is that it can benefit you and your employer.

What is salary sacrifice?

An effective salary sacrifice agreement (SSA) involves you as an employee, agreeing in writing to forgo part of your future entitlement to salary or wages in return for your employer providing you with benefits of a similar value, such as increased employer superannuation contributions.

Contributions made through a SSA into superannuation are made with pre-tax dollars and do not form part of your assessable income.

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Transitioning to retirement

28 August 2022

Thinking about easing into retirement and maintaining your lifestyle? The transition to retirement (TTR) strategy can help you achieve this and help you access some of your superannuation while you keep working.

How the TTR strategy works

If you’ve reached your preservation age (between 55 and 60) and are still working, setting up a TTR pension could provide you with greater financial flexibility by enabling you to withdraw up to 10% of your superannuation each financial year while continuing to work.

You can start a TTR pension by transferring some of your superannuation to an account-based pension (ABP), which is a regular income stream bought with money from your superannuation fund.

However, you should keep some money in your superannuation fund to continue to receive your employer’s compulsory superannuation guarantee (SG) contributions, or any other voluntary contributions you wish to make to your fund.

There are two main TTR strategies that can be used to help you:

  • Supplement your income if you reduce your work hours, or
  • Boost your superannuation and save on tax while you keep working full time.

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Switching home loans

9 August 2022

With interest rates increasing quite rapidly, homeowners are being encouraged to look around for a better deal on their home loan. ASIC has recently released some tips if you are doing so.

Ask your current lender for a better deal

Tell your current lender you are planning to switch to a cheaper loan offered by a different lender. To keep your business, your lender may reduce the interest rate on your current loan.

If you have at least 20% equity in your home, you’ll have more to bargain with. Having a good credit score will also help with negotiations.

Compare any loan they offer you with the other loans you’re considering switching to.

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GST Health Check

9 August 2022

Now that the financial year has come to a close, it’s good time to check all things GST.

Registration

If you are not already registered, you may over the coming period need to register for GST if:

  • your business or enterprise begins to have a GST turnover of $75,000 or more per year (gross income from all businesses minus GST)
  • your non-profit organisation begins to have a GST turnover of $150,000 or more.

Even if you are under these thresholds, it may be advantageous to register for GST if you typically end up in a GST refund position each tax period. By registering, this will enable you to claim the GST tax credits on certain purchases rather than missing out on those credits because you are not registered. Talk with us further if you are uncertain around this.

Conversely, if your turnover drops below these thresholds or you are contemplating ceasing business, you may deregister from GST. There are certain consequences that flow from deregistering which we can run through with you.

If you are not registered for GST and therefore cannot claim GST credits on business-related purchases, you can claim the GST as a tax deduction – though this is not as profitable as claiming the credit in full if you were GST-registered.

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ATO Prioritising Debt Collection

1 August 2022

As the economy emerges from COVID-19, the ATO is re-focusing on debt collection.

During the pandemic, the ATO deliberately shifted its focus away from firmer debt collection action to help and assist businesses and the community experiencing financial challenges because of the pandemic. It took a softly-softly approach, acknowledging the financial hardship that the virus wrought on business and individuals alike. However, with the economy now opening back up, business as usual on the ATO debt collection front, has now largely resumed.

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STP year-end finalisations … due soon!

10 July 2022

Employers need to make STP finalisation declarations by 14 July each year. As your registered agent, we can assist you in this important, upcoming process.

If you have 20 or more employees, you should be reporting closely-held (related) payees each pay day along with arms-length employees. The finalisation due date for closely-held payees is 30 September each year.

A ”closely-held (related) payee” is an individual directly related to the entity from which they receive payments (for example, family members of a business, directors or shareholders of a company, or beneficiaries of a trust).

For small employers (19 or fewer employees) who only have closely-held payees, the due date for end-of-year STP finalisation will be the payee’s income tax return due date.

For an employer with a mixture of both closely-held payees and arms-length employees, the due date for end-of-year STP finalisation for closely-held payees is 30 September each year. All other employees are due 14 July each year.

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ATO warning of fake ABN and TFN scams

6 July 2022

The ATO has just recently reported an increase in fake websites offering to provide tax file numbers (TFNs) and Australian Business Numbers (ABNs) for a fee, but then failing to provide the service – leaving taxpayers out of pocket.

The fake TFN and ABN services are typically advertised on social media platforms like Facebook, Twitter, and Instagram.

The advertisements offer to obtain your TFN or ABN for a fee. Instead of delivering this service, the scammer uses these fraudulent websites to steal both money and personal information.

It is free, quick and easy to use government services to apply for a TFN through the ATO, or apply for an ABN through the Australian Business Register (ABR).

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Tax and Property Price Increases

6 July 2022

With residential property values on a sharp upward trajectory, from a tax standpoint, what does this mean for owners and investors of this style of dwelling?

 Introduction

Domain’s End of Year Wrap revealed that in 2021, Australian house prices rose an astonishing 21.9%, the fastest annual rate of growth on record! Viewed through a taxation prism, these increases mean practically nothing unless the owner is selling or otherwise disposing of their property. If the property is retained, then the increases are merely a “paper gain”. By holding onto the property there generally won’t be any CGT consequences.

The obvious question then arises, what are the consequences from a tax perspective where an owner does decide to cash in on the boom and sell their residential property?

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