FBT car parking threshold changes
Posted by Anthony
The ATO has released the Taxation Determination 2019/9, which outlines changes to the fringe benefits tax (FBT) car parking threshold. The car parking threshold for the year commencing on 1 April 2019 is $8.95. This replaces the amount of $8.83 which applied to the FBT year ended 31 March 2019. The increase has been set by adjusting the previous year amount by a factor equivalent to the movement in the Consumer Price Index (1.3%). Section 39A of the Fringe Benefits Tax Assessment Act 1986, sets out a number of conditions that must be met before car parking facilities provided by an employer to their employees will be subject to FBT. These conditions include: A commercial car parking station is located within a one-kilometre radius of the employer-provided car park. The lowest fee charged by the car park operator is more than the car parking threshold. The car is parked for more than four hours between 7 am and 7 pm on any day. There are circumstances where car parking benefits are exempt from FBT. These exemptions may apply to: Employers who meet the conditions of a small business entity. Institutions of certain research, education, religion and charity. Employees with a […]
Ineligible downsizer contributions and how they are administered
Posted by Anthony
When a downsizer contribution is ineligible, the fund must re-assess the amount in accordance with the Superannuation Industry (Supervision) Regulations 1994 and the trust deed. This is to determine if the amount can be retained as a non-concessional contribution. Provided the trust deed allows so, the fund can return the contribution to the member or adjust the prior downsizing contributions to nil and report this amount as a non-concessional contribution when the member meets the age and work tests. When a contribution can’t be returned or returned in full:Members who no longer have a super interest with the fund, or an insufficient return amount, must have their contribution re-reported as non-concessional, even if the contribution was returned because the member did not meet the age/work tests. Some of the contribution may be an excess non-concessional contribution (ENCC). Regardless of the age of the member, if this is the case the member will receive an ENCC determination or when the fund can’t return the full amount. Members will continue to have access to all review rights under the ENCC scheme. Even if the member is in pension phase, the funds will still need to return an ineligible downsizer contribution if it […]
New ATO toolkit helps small businesses get expenses right
Posted by Anthony
The ATO has developed a new toolkit that helps small business owners to understand their entitlements and avoid mistakes in their tax returns. The 2019 Tax Time Toolkit Small Business covers information about: Three of the most common expenses: home-based business, motor vehicle, and business travel. Single Touch Payroll (STP) for small employers. These toolkits are designed to highlight areas that small businesses may struggle with at tax time. Subjects include: Information about claiming deductions for home-based business expenses. Types of motor vehicle expenses that you can claim. The importance of accurate record keeping. How to differentiate between business and private use. One of the factsheets, in particular, provides options and support for employers using STP. Some of the important topics outlined in the fact sheet include: What information you need to report and when you need to report it. How to correct the amounts reported. The changes to payment summaries. Information you need to provide to your employees. Available exemptions. As it is common for there to be confusion around these topics, taking the time to understand your obligations as a business owner can streamline the returns process and help to ensure correct reporting.
Be wary of unregistered tax preparers
Posted by Anthony
The Australian Taxation Office (ATO) is warning taxpayers to keep an eye out for people posing as tax agents who are not registered with the Tax Practitioners Board (TPB). Only a registered tax agent can charge a fee to prepare and lodge your tax return. There are concerns from the ATO about the number of people claiming to be tax agents, often promising refunds that sound too good to be true, or providing discounted services much cheaper than registered, legitimate tax agents. Unregistered preparers will often use a taxpayer’s personal login details to access their ATO Online account through myGov to lodge tax returns. To protect yourself from a large tax bill or from facing penalties, check that your tax agent is registered on the TPB website or ask to see their Certificate of Registration of Tax Agent. Protecting your myGov login details and password will also ensure safety as a legitimate tax practitioner will never ask for your myGov credentials. Registered tax agents can access the information they need themselves through ATO online services dedicated to lodging returns for their clients. Individuals should also be aware that if you use an unregistered tax or BAS agent and they are […]
Illegal early release of super on ATO watch-list
Posted by Anthony
Illegal early release of super (IER) is one of the risk areas that the ATO has identified as being of most concern and in need of action. Each year, the ATO analyses its data to identify the areas of high risk that will form part of its compliance program. Aside from illegal early release, another key risk area is non-lodgement. In the last year, the ATO has targeted individuals and promoters who register self-managed super funds with the intention of using the fund to illegally access super benefits. In the 2019 financial year, the ATO cancelled the registration of 609 newly registered SMSFs who intended to use the funds for IER. They also withheld the details of 352 funds from the Super Fund Lookup, meaning they couldn’t receive payments and rollovers. The ATO has warned of severe consequences for you and your fund if super is accessed before you are legally entitled to it. These include disqualification of trustees, administrative penalties, the fund deemed as non-complying, or even prosecution. Fund trustees or members who have knowingly been involved in a scheme or been approached by anyone claiming that they can withdraw their super early should contact the ATO immediately to […]
Tax requirements for capped defined benefit income streams
Posted by Anthony
Members who receive income from one or more capped defined benefit income streams may have additional tax liabilities. They would then need to calculate their entitlement to the 10% tax offset if the income from all their capped defined benefit income streams exceeds their defined benefit income cap. SMSF’s who pay a capped defined benefit income stream to members with a cap will need to provide the ATO with a PAYG withholding payment summary annual report, due by 14 August 2019. Members will have a cap if they have income from a capped defined benefit income stream and are 60 and above or under 60 and receiving a death benefit income stream from a person who died aged 60 or over. When preparing their individual tax return, members need to: Consider all income they receive from capped defined benefit income streams. At label 7M, include half of the income from the tax-free component and taxed elements of all their capped defined benefit income streams which exceeds their defined benefit cap. At label 7N, include any untaxed element. At label T2, calculate and include their entitlement to the 10% tax offset (the amount may be nil). The defined benefit income cap […]
New tax toolkit for rental property owners
Posted by Anthony
The ATO has developed a new rental property owners toolkit for property investors to ensure that mistakes are avoided in their tax returns. Each year, the tax office identifies fairly common mistakes being made with tax claims made in regard to investment properties. In a recent review of individual tax returns, nine out of 10 taxpayers with a rental property were found to have made a mistake in their tax return. The newly developed toolkit focuses on areas were mistakes are most commonly being made. These include: Renting out a room, a unit, or a whole house on an occasional basis through the sharing economy (such as Airbnb). Repairs, maintenance and capital expenditure. Any borrowing expenses incurred when taking out a rental property loan. Interest on a loan that is taken out to purchase a rental property. Fact sheets within the toolkit are also available to be downloaded individually. The toolkit is designed to assist rental property owners to get the information they need in order to lodge correctly and to avoid any lodgement mistakes in the future.
What SMSF records should you keep?
Posted by Anthony
A key responsibility for trustees of self-managed super funds (SMSFs) is to ensure proper and accurate tax and superannuation records are kept for the fund. When you have been running your fund for a long period of time and have amassed a large amount of information, it can be hard as a trustee to know exactly what records to keep, how long for and where to store them. The ATO requires SMSF trustees to keep the following records for a minimum of five years: Accurate accounting records that explain the transactions and financial position of the SMSF. An annual operating statement and statement of the SMSF’s financial position. Copies of all annual returns and transfer balance account reports lodged. Copies of any other statements the fund trustee is required to lodge with the ATO or other super funds. The following records are required to be kept for a minimum of 10 years: Minutes of trustee meetings and decisions if matters affecting the fund were discussed, such as the fund’s investment strategy. Records of all changes of trustees, and members’ written consent to be appointed as trustees. Trustee declarations that recognise the obligations and responsibility of any trustee or director of […]
What is replacing AUSKey?
Posted by Anthony
The ATO is developing new online services systems as AUSKey will be retired in March 2020 Replacing AUSKey will be myGovID and Relationship Authorisation Manager (RAM). MyGovID is an authentication service that will allow individuals to prove who they are online. This system will work by establishing your identity once online and then using your myGovID credentials to access government services you need online. Relationship Authorisation Manager (RAM) is an authorisation service that allows you to link your myGovID to an ABN, managing authorisations across government services, for businesses and their staff. RAM gives you the ability to add multiple businesses, access the business portal on behalf of multiple businesses, modify authorisations, customise and delegate the level of business authorisation for employees and nominate who can act on behalf of your practice. MyGovID and RAM are currently available in a public beta for eligible businesses to access the ATO Business Portal and will soon be available for online services for agents. AUSkey can still be used to access online ATO services while myGovID and RAM are being developed. The ATO advises that in preparation for the changes you check your ABN details are up-to-date in the Australian Business Register (ABR).
SMSF rollovers in SuperStream to be deferred
Posted by Anthony
The 2019-2020 Federal Budget suggested a deferral of the extension of SuperStream to self-managed superannuation fund (SMSF) rollovers from 30 November 2019 to 31 March 2021. The commencement of this deferral has recently been confirmed by the government. The deferral will coincide with the $19.3 million that will be provided to the Australian Taxation Office (ATO) over three years from 2020-21, enabling electronic requests to be sent to superannuation funds for the release of money required under a number of superannuation arrangements. With the combined date for both bringing electronic release authorities into SuperStream and allowing SMSF rollovers, changes needed to update SuperStream will only need to be undertaken once. The deferral aims to reduce administrative costs for funds and allows for a more integrated design of SuperStream. First introduced in 2015, SuperStream is a government standard for processing superannuation payments electronically in a streamlined manner. Currently, SuperStream can only process rollovers between two APRA funds electronically but with the change will see this process extend to SMSFs. Regulations for the deferral to put into effect will be made promptly.
