Extra super step when hiring new employees
Employers may soon need to do something extra when a new employee starts to work for them.
Currently, if a new employee does not choose their own fund, their employer can pay contributions for them to a default fund.
From 1 November 2021, if a new employee does not choose a specific fund, their employer may need to request the employee’s ‘stapled super fund’ details from the ATO.
A stapled super fund is an existing account which is linked (or 'stapled') to an individual employee,
so it follows them as they change jobs.
Businesses will be able to request stapled super fund details for new employees using ‘Online services for business’, or by asking their registered tax or BAS agent to do this for them.

ATO support for employers with expansion of STP
As part of the expansion of Single Touch Payroll (known as STP Phase 2), from 1 January 2022, employers will need to report additional payroll information in their STP reports including:
 disaggregation of gross amounts(including separate reporting of paid leave, allowances, overtime, directors’ fees and salary sacrifice amounts);
 employment and taxation conditions (including information from the TFN declaration); and
 income types (for example, salary and wages, working holiday maker income, foreign employment income).
To support employers with the move to STP Phase 2 reporting, the ATO will take the following approach:
 Employers that can start Phase 2 reporting by their digital service provider’s deferral date (if applicable), do not need to apply to the ATO for more time.
 If an employer’s software will be ready for 1 January 2022 and they are able to start reporting before 1 March 2022, they do not need to apply to the ATO for more time (that is, an automatic extension applies).
The ATO has also advised that penalties will not be applied for genuine mistakes in the first year of
Phase 2 reporting until 31 December 2022.

Reminder for first-time share investors to declare income
With the growth of micro-investment platforms helping new investors enter the market, the ATO
has issued a reminder for first-time share and Exchange Traded Funds (‘ETF’) investors.
The ATO is concerned that first-time investors often do not understand their tax obligations in
relation to reporting capital gains from the sale of shares and income in the form of dividends and
distributions.
This could result in errors when they lodge their tax return and delay tax refunds. While the ATO pre-fills data from third parties into individual tax returns, investors are urged to check that all relevant data has been included, or make sure their registered tax agent has all the necessary information before lodging.
Investors should also keep good records.

Documenting gifts or loans from related overseas entities
The ATO is currently reviewing certain arrangements where Australian taxpayers seek to disguise undeclared foreign income as a gift or loan.
Genuine gifts or loans received from related overseas entities (including family members and friends) are sometimes used to fund businesses or to acquire income producing assets. In this context, a genuine gift or loan is one where:
 the characterisation of the transaction as a gift or loan is supported by appropriate documentation;
 the parties’ behaviour is consistent with that characterisation; and
 the monies provided are sourced from funds genuinely independent of the taxpayer.
Having good contemporaneous record keeping practices is desirable in case the ATO seeks to verify whether an amount is a genuine gift or loan.
The ATO has published detailed information to help taxpayers properly document genuine gifts or
loans received from related overseas entities that are used for income purposes.
The information can be accessed from the ATO website by searching for ‘Gifts or loan from related
overseas entities’.

Additional ATO support during COVID-19
The ATO is providing additional support to taxpayers having difficulty meeting their tax and superannuation guarantee charge obligations for employees because of COVID-19.
Available support includes the following:
 Lodgment or payment support options – for example, payment plans or remitting interest and penalties.
 Varying PAYG instalments – The ATO will not apply penalties or charge interest on varied instalments that relate to the 2022 income year where taxpayers have taken reasonable care to estimate their end of year tax liability.
 Moving from quarterly to monthly GST reporting for quicker access to refunds.
 Applying for administrative relief for Division 7A minimum yearly repayments.
If you are struggling with your tax or super obligations, we can assist with identifying your options and apply to the ATO on your behalf.

Paid Parental Leave changes support parents in lockdown
The Paid Parental Leave (‘PPL’) scheme has been amended to enable expectant parents whose work has been affected by COVID-19 lockdowns to access Parental Leave Pay or Dad and Partner Pay under the scheme.
Many people who would otherwise have qualified for PPL, may no longer meet the ‘work test’ condition to be eligible for payment because of continued lockdowns across much of Australia. For example, this could apply to a person who has been stood down, had their hours of work reduced or ceased work entirely as a result of a lockdown. 
The changes to the PPL ensure that the period a person receives an Australian Government COVID-19 payment or the COVID-19 Disaster Payment (that is, because their work has been impacted by lockdowns) counts towards the work test, so that they may still receive Parental Leave Pay or Dad and Partner Pay.

Reminder of SG obligations for September 2021 quarter
Under the Superannuation Guarantee (‘SG’) scheme, employers are required to make quarterly contributions on behalf of their employees.
From 1 July 2021, the minimum contribution required is 10% (up from 9.5%) of an employee’s Ordinary Time Earnings base, up to a maximum quarterly contribution base of $58,920 for 2021/22.
Employers are reminded that the due date for making SG contributions for the September 2021 quarter is 28 October 2021.

Extending administrative relief for companies to use technology

The Government has passed legislation renewing the temporary relief that allows companies to use
technology to meet regulatory requirements under the Corporations Act 2001.
These temporary relief measures will allow companies to hold virtual meetings and use electronic communications to send meeting materials and execute documents until 31 March 2022. This should ensure that companies can meet their obligations as they continue to deal with the uncertainty of the COVID-19 pandemic.
With the extension of this temporary relief, the Government will now seek to introduce permanent
reforms later this year to give companies the flexibility to use technology to hold meetings, such
as hybrid meetings, and sign and send documents. 

Expansion of support for SMEs to access funding

The Government is providing additional support to small and medium sized businesses ('SMEs') by
expanding eligibility for the SME Recovery Loan Scheme.
Specifically, in recognition of the continued economic impacts of COVID‑19, the Government
will remove requirements for SMEs to have received JobKeeper during the March quarter of
2021, or to have been a flood affected business, in order to be eligible under the SME Recovery
Loan Scheme.
As with the existing scheme, SMEs who are dealing with the economic impacts of the
coronavirus with a turnover of less than $250 million will be able to access loans of up to $5
million over a term of up to 10 years.
Other key features include:
      The Government guarantee will be 80% of the loan amount.
      Lenders are allowed to offer borrowers a repayment holiday of up to 24 months.
      Loans can be used for a broad range of business purposes, including to support investment, as well             as to refinance any preexisting debt of an eligible borrower.
      Loans can be either unsecured or secured (excluding residential property).
The loans will be available through participating lenders until 31 December 2021.

ATO warns property investors about common tax traps

In 2019/20, over 1.8 million Australians owned rental properties and claimed $38 billion in deductions, so the ATO is reminding property investors to beware of common tax traps that can delay refunds or lead to an audit costing taxpayers time and money.
The most common mistake rental property and holiday homeowners make is neglecting to declare all their income, including failing to declare any capital gains from selling an investment property.
Assistant Commissioner Tim Loh said: “To put it simply, you should expect tax consequences for
any property that you earn income from that isn’t your main residence.”
​“We are expanding the rental income data we receive directly from third-party sources such as
sharing economy platforms, rental bond authorities, and property managers. 
We will contact taxpayers about income they’ve received but haven’t included in their tax return.
This will mean they need to repay some of their refund,” Mr Loh said.
So far, the ATO has adjusted more than 70% of the 2019/20 returns selected for a review of rental
information. “Most people we contact about their rental deductions are able to justify their claims.
However, there are instances where we have to knock back claims where taxpayers didn’t keep
receipts, claimed for personal use, or claimed for ineligible deductions,” Mr Loh said.
We can help make sure you get your rental income and deductions right, including where rental income has been affected by COVID-19.

Div.293 concessional contribution assessments have been issued

The ATO has recently issued approximately 30,000 Division 293 assessments for the 2018/19 and 2019/20 financial years.
Editor: Division 293 tax is an additional tax on super contributions, which reduces the tax concession for individuals whose combined income and contributions are greater than the Division 293 threshold (currently $250,000).
Due to a system issue, concessional contributions reported for these financial years were not included in Division 293 assessments where that super account was also reported as closed during that financial year. This reporting issue was resolved in June 2021, and this has resulted in affected members receiving either an initial or amended Division 293 assessment.

Travel allowances and 'LAFHAs'

The ATO has released a Ruling explaining: 
      when an employee can deduct accommodation and food and drink expenses when travelling on                work;
      the FBT implications, including the application of the 'otherwise deductible rule', where an                           employee  is reimbursed for accommodation and food and drink expenses, or where the employer              provides or pays for these expenses; and
      the criteria for determining whether an allowance is a 'travel allowance' or a 'livingaway- from-home         allowance' ('LAFHA') benefit.
Whether accommodation and food and drink expenses are deductible depends on the facts and
circumstances of each case, so the Ruling uses examples to show how to determine the deductibility of these expenses in a range of situations.

Time running out to register for the JobMaker Hiring Credit

The JobMaker Hiring Credit scheme's third claim period is now open, so if a taxpayer has taken on additional eligible employees since 7 October 2020, they may be able to claim JobMaker Hiring
Credit payments for their business.
Eligible businesses can receive up to:
      $10,400 over a year for each additional eligible employee hired aged 16 to 29 years; and
      $5,200 over a year for each additional eligible employee hired aged 30 to 35 years.
The JobMaker Hiring Credit is available to businesses for each additional eligible employee hired before 6 October 2021, so, if a business is thinking about taking on extra staff, they should check if they are eligible to participate in the scheme.

Labor commits to income tax cuts and certainty on negative gearing

The ALP has formally announced that, if elected to Government, they will deliver "the same legislated tax relief . . . as the Morrison Government".
This means they have committed to upholding the legislated changes to personal income taxes, and will also maintain the existing regimes for negative gearing and capital gains tax to provide "certainty and clarity to Australian working families after a difficult two years for our country and the world".

Reminder of superannuation caps indexation for 2022
From 1 July 2021, the superannuation contributions caps have been indexed for the 2022 income year.
The new concessional contributions cap for the 2022 financial year is now $27,500 (increased from $25,000).
The new non-concessional (i.e., nondeductible) contributions cap for the 2022 financial year is now $110,000 or (where the ‘bring forward’ rules are applicable) $330,000 over three years (increased from $100,000 or $300,000 respectively).
The CGT cap amount for the 2022 financial year is now $1,615,000 (increased from $1,565,000). The increase in the concessional contributions cap in particular will require those salary sacrificing additional superannuation to consider if they wish to increase their packaging arrangements so as to maximise the $2,500 increase in the cap.
Ref: ATO website, Key superannuation rates and thresholds: contributions caps, updated 6 July 2021

Division 7A benchmark interest rate for 2022 remains unchanged
The Division 7A benchmark interest rate for the 2022 income year remains unchanged from the 2021 rate of 4.52%.
Ref: ATO website, Division 7A benchmark interest rate, 6 July 2021

Changes to STP reporting from 1 July 2021
Employers should have already been reporting through Single Touch Payroll (‘STP’) unless they only have closely held payees, or they are covered by a deferral or exemption.
From 1 July 2021, there have been changes to STP reporting for small employers with closely held payees and quarterly reporting for micro employers.
More specifically, for employers with closely held payees, employers must now report amounts paid
to their closely held payees through STP.

They can choose to report such payments via one of three methods, being:
 actual payments each pay day;
 actual payments quarterly; or
 a reasonable estimate quarterly.

For micro employers reporting quarterly, the STP quarterly reporting concession is only available to
micro employers who meet certain eligibility requirements (which now include the need for exceptional circumstances to exist).
Ref: ATO website, Changes to STP reporting from 1 July, 16 July 2021

Maximum contributions base for super guarantee
The maximum super contributions base is used to determine the limit on any individual employee's
earnings base for superannuation guarantee purposes on a quarterly basis.
Employers do not have to provide the minimum quarterly support for earnings above this limit.
For the 2022 financial year, the maximum contributions base has increased to $58,920 (up from $57,090).
This means once an employee earns over $235,680 during the 2022 income year, no additional superannuation guarantee will generally be required to be paid by an employer.
Practically, this means that the maximum superannuation guarantee contribution that an employer must pay for the 2022 income year is 10% of $235,680 (or $23,568).
Ref: ATO website, Key superannuation rates and thresholds, Maximum super contribution base, updated 6 July 2021.

The ‘gigs up’ with a new sharing economy reporting regime
Treasury has released draft legislation introducing the long-awaited third party reporting regime (proposed to apply from 1 July 2022).
The new regime will initially require ride-sharing and short term accommodation online platform operators to report transactions they facilitate directly to the ATO.
This measure was first announced in the 2020 MYEFO (following a recommendation from the Black Economy Taskforce established in 2016). It is intended to extend to all other types of sharing (‘gig’) economy online platforms such as food delivery and task services from 1 July 2023.
Under this new proposed regime, the identity of participants and payments they receive will be reported to the ATO (twice a year) to identify entities who may not be meeting their tax obligations.
Ref: Treasury website, Implementing a reporting regime for sharing economy platform providers, 6 July 2021

Taxable Payments Annual Reports (‘TPARs’) due 28 August
2021 TPARs are due to be lodged for businesses who have paid contractors to provide the following
services:
​
 building and construction;
 cleaning;
 courier, delivery or road freight;
 information technology (‘IT’); or
 security, surveillance or investigation.

With specific reference to the TPAR due on 28 August 2021, the ATO has reminded taxpayers they may need to report payments made to contractors during the 2021 income year for the first time.
This will particularly be the case where such payments were made for delivery services done on behalf of their business (i.e., perhaps as a result of a COVID-19 business ‘pivot’ during lock down periods).
Importantly, the ATO has reminded taxpayers that they already have the records needed to lodge a
TPAR from preparing their relevant activity statements including the:
 contractor’s name, address and ABN (if known); and
 total amounts for the income year of payments to each contractor (including GST) and tax withheld where the contractor did not quote their ABN.
Ref: ATO website, TPAR – check if you need to lodge, 12 July 2021

New FBT retraining and reskilling exemption available
Recent legislative amendments mean that employers who provide training or education to redundant (or soon to be redundant employees) may now be exempt from fringe benefits tax (‘FBT’).
The ATO has reminded eligible employers that they can apply the exemption to retraining and reskilling benefits provided on or after 2 October 2020.
There are no limits on the cost or number of training or education courses that employees may undertake.
Furthermore, retraining and reskilling benefits that are exempt from FBT don’t need to be included in
the FBT return, or in an employee’s reportable fringe benefits amount. The ATO has also advised that if an employer has already lodged and paid for their 2021 FBT return, they will need to amend to reduce the FBT paid for any exempt retraining and reskilling benefits.
Ref: ATO website, FBT retraining and reskilling exemption now law, 19 July 2021.


Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances

Super guarantee contribution due
date for June 2021 quarter The due date for employers to make super guarantee contributions for their employees for the June 2021 quarter is 28 July 2021.

Note that the super guarantee rate in relation to salary and wages paid on or before 30 June 2021 is 9.5%, but the super guarantee rate is 10% in relation to salary and wages paid from 1 July 2021 (even if they are paid in relation to work performed before that date).
​
Also, contributions made (and received by the fund) after 30 June 2021 will not be deductible in the 2021 income year, even if they are made in relation to work performed during the 2021 income year.

Extension of time to make repayments on Division 7A loans
Editor: Under a complying Division 7A loan from a private company, the borrower must make minimum yearly repayments ('MYR') before the end of the lender’s income year to avoid the loan being treated as an assessable dividend.

To offer more support due to the ongoing effects of COVID-19, an extension of the repayment period is now available for those who were unable to make their MYRs by the end of the lender’s 2020/21 income year (generally 30 June).

The borrower can apply for this administrative relief using the ATO's streamlined online application. Note that they must still make up the shortfall of their 2020/21 MYR by 30 June 2022.

A similar extension was also available for the MYR for the 2019/20 year, and borrowers who obtained
this extension needed to have made up that shortfall by 30 June 2021.
​
If they didn't meet this deadline, they will need to either obtain a further extension of time for the
2019/20 MYR outside the streamlined process, or amend their 2019/20 tax return to include a dividend.

Rent or lease payment changes due to COVID-19
The ATO has provided updates regarding the tax implications when a landlord gives, or a tenant receives, rent concessions (such as waivers or deferrals of rent) as a result of COVID-19.

For example, the ATO provides the following advice for tenants that have received a rent waiver.
If the waived rent is related to a past period of occupancy that the tenant has already incurred and claimed a deduction for, they are still entitled to that deduction. However:

 if they have already paid the incurred rent and it has been waived and refunded to the tenant, they will need to include this amount in their assessable income when they receive it; or
​
 if they have not already paid the incurred rent and it has been waived, the rent waiver will be a debt forgiveness. When such a debt is forgiven, the tenant will make a gain. The amount isn't usually included in the business's assessable income — it is instead offset against amounts that could otherwise reduce the business's taxable income.

If the waived rent is related to a future period of occupancy, they will not be entitled to a deduction for that amount.

These types of rent concessions can give rise to various tax implications for both tenants and landlords (including GST implications), so please contact our office if you would like assistance in this regard.

Lost, damaged or destroyed tax records
The ATO knows that many taxpayers are facing lasting impacts left in the wake of natural disasters, so if they find their records have been lost or destroyed, whether in cyclones, floods or bushfires, the ATO can help. According to ATO Assistant Commissioner Tim Loh: 

“If you have a myGov account linked to the ATO,
you’ll be able to view some of your records, including income tax returns, income statements and previous notices of assessments. If you lodge through a registered tax agent, they can also access these documents on your behalf.”

Government agencies, private health funds, financial institutions and businesses provide information to the ATO which is available to tax agents and automatically included in returns by the end of July.
​
If taxpayers have lost receipts due to a natural disaster, the ATO can accept reasonable claims without evidence, so long as it’s not reasonably possible to access the original documents (although the taxpayer may be required to tell the ATO how they calculated the claim).

Introducing SMSF rollover alerts
Since February 2020, the ATO has been issuing alerts via email and SMS when certain changes are made to a self-managed super fund ('SMSF').

With the inclusion of SMSF rollovers in SuperStream, the ATO will send the fund an email and/or text message alert when the fund uses the SMSF verification service ('SVS') to verify the SMSF's details before making a rollover.

Note that funds may use this service multiple times when actioning a single rollover request, which may result in receiving multiple alerts.

These alerts are being sent to help safeguard retirement savings and reduce the risk of fraud or misconduct. If a fund receives an alert and is already aware of the rollover request, there is nothing more that needs to be done.
​
However, if a member didn't request a rollover to be made to an SMSF, or they want more information, they will need to contact their existing super fund(s) as a matter of priority, as rollovers through SuperStream may be processed in as little as 3 business days.

SMSF limited recourse borrowing arrangements interest rates
The ATO has confirmed that the following interest rates charged under a limited recourse borrowing
arrangement ('LRBA') to an SMSF would be consistent with the safe harbour terms the ATO will accept for the 2021/22 financial year.

• Real property: 5.10% 
  
• Listed shares or units: 7.10%

Note that these rates are unchanged from those the ATO accepted for the 2020/21 year.

New ATO data-matching programs
The ATO has advised that it will engage in two new data matching programs, as outlined below:

 the ATO will acquire novated lease data from McMillan Shakespeare Group, Smartgroup Corporation, SG Fleet Group, Eclipx Group, LeasePlan, Toyota Fleet Management, LeasePLUS and Orix Australia for the 2018/19 through to 2022/23 financial years (relating to approximately 260,000 individuals each financial year); and
​
 the ATO will acquire account identification and transaction data from cryptocurrency designated service providers for the 2021 financial year through to the 2023 financial year inclusively (relating to approximately 400,000 to 600,000 individuals each financial year).

Many of our business clients like to review their tax position before the end of the income year and evaluate any strategies that may be available to legitimately reduce their tax. Traditionally, year-end tax planning for small businesses is based around accelerating deductions and deferring income. However, this year, consideration will also need to be given to the impact of the COVID-19 pandemic.
Small Business Entities ('SBEs') – i.e., those with an aggregated turnover of less than $10 million – often
have greater tax planning opportunities due to certain concessions only applying to them. Further, SBE
taxpayers generally have the flexibility of being able to pick the concessions that suit their circumstances.
The following are a number of areas that may be considered for all business taxpayers.

Maximising deductions for non-SBE taxpayers
Deductions can be maximised for non-SBE business taxpayers by prepaying expenses, accelerating expenditure and/or accruing expenses that have been incurred.
Prepayment strategies (non-SBEs) Any part of an expense prepayment relating to the period up to 30 June is generally deductible.
In addition, non-SBE taxpayers may generally claim prepayments in full for expenditure that is:
– under $1,000;
– made under a 'contract of service' (e.g., salary and wages); or
– required to be incurred under law.
Accelerating expenditure (non-SBEs) Accelerating expenditure involves bringing forward expenditure on regular, on-going deductible items.
This is a useful strategy because business taxpayers can generally claim deductions for expenses they 'incurred' during 2020/21, even if the expenses have not actually been paid by 30 June 2021.

The following may act as a checklist of possible accelerated expenditure for 2020/21:
Depreciating assets - Non-SBEs with an aggregated turnover of (generally) less than $5 billion can fully expense eligible assets, regardless of cost, that were first acquired and used (or installed ready) for business use from 7:30pm (AEDT) on 6 October 2020 to 30 June 2021.
Note: Non-SBEs may choose to opt out of full expensing on an asset-by-asset basis. 
If full expensing does not apply to a particular asset (or an opt-out choice is made), non-SBEs with an aggregated annual turnover of less than $500 million can generally claim:
– an immediate deduction for eligible assets costing less than $150,000 that were acquired from 7:30pm (AEDT) on 2 April 2019 to 31 December 2020 and were first used (or installed ready) for business use
from 12 March 2020 to 30 June 2021; or 
– for assets costing $150,000 or more, a 50% accelerated depreciation concession for eligible new assets first held and used (or installed ready) for business use from 12 March 2020 to 30 June 2021 (unless an opt-out choice is made for an asset).
Additional possible accelerated expenditure could also include the following:

•  Repairs.
•  Maintenance.
•  Consumables/spare parts.
•  Advertising.
•  Fringe benefits – Any benefits to be provided, such as property benefits, could be purchased and provided prior to 1 July 2021. 
•  Superannuation contributions to a complying superannuation fund, to the extent contributions

are actually made (i.e., they cannot be accrued but must be paid by 30 June).

Accrued expenditure (for all business taxpayers - including SBE taxpayers)
Business taxpayers (including SBE taxpayers) are entitled to a deduction for expenses incurred as at
30 June 2021, even if they have not yet been paid. Examples of expenses that may be accrued include:
~ salary or wages and bonuses – the accrued expense for the days that employees have worked but have not been paid as at 30 June 2021;
~ interest – any accrued interest outstanding on a business loan that has not been paid;
~ commissions – where commission payments are owed to employees or other external parties;
~ fringe benefits tax ('FBT') – for example, if an FBT instalment for the June 2021 quarter is due but is not payable until July, it can be accrued and claimed as a tax deduction in 2020/21; and
~ directors’ fees – where a company is definitively committed to the payment of a director’s fee as at 30 June 2021, it can be claimed as a tax deduction.

Maximising deductions for SBE taxpayers
Deductions can be maximised for SBE taxpayers by accelerating expenditure and/or prepaying deductible business expenses (and also by accruing expenditure - refer above).

Accelerating depreciation expenditure (for SBE taxpayers)
In addition to accelerating expenditure on various usiness items, SBE taxpayers that use the simplified SBE depreciation rules may claim the following 2021 deductions (if applicable) in relation to depreciating assets:
A full deduction for the cost of eligible assets (i.e., regardless of cost) first acquired and first used (or installed ready for use) for business purposes from 7:30pm (AEDT) on 6 October 2020 to 30 June 2021.
Note that, SBE taxpayers choosing to use the simplified SBE depreciation regime cannot directly opt out of temporary full expensing (i.e., if it applies).
Where temporary full expensing does not apply:
 An SBE taxpayer may be entitled to claim an immediate deduction for eligible depreciating assets costing less than $150,000 that were first used or (installed ready for use) for business purposes by 30 June 2021
 Alternatively, assets costing $150,000 or more are allocated to an SBE taxpayer's general small business pool.
Note that, SBE taxpayers using the simplified SBE depreciation regime cannot opt out of temporary full expensing with regards to their general pool. As a result, the closing pool balance (before current year deductions) will be fully claimed in the 2021 income year.
Therefore, if appropriate, SBE taxpayers should consider purchasing and using (or installing) these items by 30 June 2021.

Prepayment strategies – SBE
SBE taxpayers making prepayments before 1 July 2021 can choose to claim a full deduction in the year of payment where they cover a period of no more than 12 months (ending before 1 July 2022).
Otherwise, the prepayment rules are the same as for non-SBE taxpayers. The kinds of expenses that may be prepaid include:
 Rent on business premises or equipment.
 Lease payments on business items such as cars and office equipment.
 Interest – check with your financier to determine if it’s possible to prepay up to 12 months interest in advance.
 Business trips.
 Training courses that run from 1 July 2021.
 Business subscriptions.
Information Required
This is some of the information we will need you to bring to help us prepare your income tax return:
 Stock-take details as at 30 June 2021.
 Debtors listing (including a list of bad debts written off) as at 30 June 2021.
Note: In order to claim a deduction, the debt must be written off on or before 30 June.
 Creditors listing as at 30 June 2021.

Tax saving strategies prior to 1 July 2021
A strategy often used to reduce taxable income (and, in turn, tax payable) in an income year is to bring
forward any expected or planned deductible expenditure from a later income year. However, in light of the continued impact of the COVID-19 pandemic, any tax planning for individuals with potentially reduced income for the 2021 tax season may require consideration of deferring any deductible expenditure (if possible).

Common claims made by individuals
The following outlines common types of deductible expenses claimed by individual taxpayers, such as
employees and rental property owners, and some strategies for increasing their deductions for the
2021 income year.
1. Depreciating assets costing $300 or less 
Salary and wage earners and rental property owners will generally be entitled to an immediate deduction for certain income-producing assets costing $300 or less that are purchased before 1 July 2021.
Some purchases you may consider include:
 tools of trade;
 electronic tablets;
 calculators or electronic organisers;
 software;
 books and trade journals;
 stationary; and
 briefcases/luggage or suitcases.
2. Clothing expenses
Individuals may pay for work-related clothing expenses before 1 July 2021, such as:
~ compulsory (or non-compulsory and registered) uniforms, and occupation specific and protective clothing; and
~ other associated expenses such as drycleaning, laundry and repair expenses.
3. Self-education expenses
Employees may prepay self-education items before 1 July 2021, such as:
~ course fees (but not HELP repayments), student union fees, and tutorial fees; and
~interest on borrowings used to pay for any deductible self-education expenses. Also they may bring forward purchases of stationery and text books (i.e., those that are not required to be depreciated).
4. Other work-related expenses
Employees may also prepay any of the following expenses before 1 July 2021:
~ Union fees.
~Subscriptions to trade, professional or business associations.
~ Seminars and conferences.
~ Income protection insurance (excluding death and total/permanent disability).
~ Magazine and professional journal subscriptions.
Note: If prepaying any of the above expenses before 1 July 2021, ensure that any services being paid
for will be provided within a 12-month period that ends before 1 July 2022. Otherwise, the deductions
will generally need to be claimed proportionately over the period of the prepayment

Information Required
You will need to provide us with information to assist in preparing your income tax return. Please check
the following and provide any relevant statements, accounts, receipts, etc., to help us prepare your
return.
Income/Receipts:

•  Details of your employer(s) and wages.
•  Lump sum and termination payments.
•  Government pensions and allowances.
•  Other pensions and/or annuities (including JobKeeper payments).
•  Allowances (e.g., entertainment, car, tools).
•  Interest, rent and dividends.
•  Distributions from partnerships or trusts.
•  Details of any assets sold that were either used for income-earning purposes or which may be liable for capital gains tax ('CGT').

Expenses/Deductions (in addition to those mentioned above):

•  Award transport allowance claims.
•  Bank charges on income-earning accounts (e.g., term deposits).
•  Bridge/road tolls (if travelling on work).
•  Car parking (if travelling on work).
•  Conventions, conferences and seminars.
•  Depreciation of library, tools, business equipment (incl. portion of home computer).
•  Gifts or donations.
•  Home office running expenses, such as:

                 ~ cleaning;
                 ~ cooling and heating;
                 ~ depreciation of office furniture;
                 ~ lighting; and
                 ~ telephone and internet.
Interest and dividend deductions, such as:
 account keeping fees;
 ongoing management fees;
 interest on borrowings to buy shares; and
 advice relating to changing investments (but not setting them up).
Interest on loans to purchase equipment or income-earning investments.
~ Motor vehicle expenses (if work-related).
~ Overtime meal expenses.
~ Rental property expenses, including:

•  advertising expenses;
•  council and water rates;
•  insurance;
•  interest;
•  land tax;
•  property management fees;
•  genuine repairs and maintenance; and
•  telephone expenses.

~ Superannuation contributions.
~ Sun protection items.
~ Tax agent fees.
~ Telephone expenses (if work-related).
~ Tools of trade.

Cryptocurrency under the microscope this tax time
The ATO is concerned that many taxpayers believe their cryptocurrency gains are tax-free, or only taxable when the holdings are cashed back into Australian dollars.
ATO data analysis shows a dramatic increase in trading since the beginning of 2020, and has estimated that there are over 600,000 taxpayers that have invested in crypto-assets in recent years.
This year, the ATO will be writing to around 100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns.
The ATO also expects to prompt almost 300,000 taxpayers as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses. 
Gains from cryptocurrency are similar to gains from other investments, such as shares. CGT also applies to the disposal of non-fungible tokens ('NFTs'). The ATO matches data from cryptocurrency designated service providers to individuals’ tax returns, helping it to ensure investors are paying the right amount of tax.
“The best tip to nail your cryptocurrency gains and losses is to keep accurate records including dates
of transactions, the value in Australian dollars at the time of the transactions, what the transactions
were for, and who the other party was, even if it’s just their wallet address,” Assistant Commissioner
Tim Loh said. 
Businesses or sole traders that are paid cryptocurrency for goods or services will have these payments taxed as income based on the value of the cryptocurrency in Australian dollars. Holding a cryptocurrency for at least 12 months as an investment may mean the holder is entitled to a CGT discount if they have made a capital gain.

Temporary reduction in pension minimum drawdown rates extended
The Government has announced an extension of the temporary reduction in superannuation minimum drawdown rates for a further year to 30 June 2022.
As part of the response to the coronavirus pandemic (and the negative effect on the account balance of superannuation pensions), the Government reduced the superannuation minimum drawdown rates by 50% for the 2019/20 and 2020/21 income years.
This 50% reduction will now be extended to the 2021/22 income year.

Super Guarantee rate rising from 1 July 2021
The super guarantee rate will rise from 9.5% to 10% on 1 July 2021, so businesses with employees will need to ensure their payroll and accounting systems are updated to incorporate the increase to the super rate.

ATO warns on ‘copy/pasting’ claims
The ATO is alerting taxpayers that its sights are set on work-related expenses like car and travel claims that are predicted to decrease in this year’s tax returns.
Assistant Commissioner Tim Loh noted that COVID-19 has changed people’s work habits, so the ATO expects their work-related expenses will reflect this.
“We know many people started working from home during COVID-19, so a jump in these claims is expected,” Mr Loh said.
“But, if you are working at home, we would not expect to see claims for travelling between worksites, laundering uniforms or business trips.”
The ATO will also look closely at anyone with significant working from home expenses, that maintains or increases their claims for things like car, travel or clothing expenses: “You can’t simply copy and paste previous year’s claims without evidence.”
“But we know some of these unusual claims may be legitimate. So, if you explain your claim with
evidence, you have nothing to fear.”

Family assistance payments
The ATO has reminded individuals receiving Child Care Subsidy and Family Tax Benefit payments
from Services Australia that they and their partners must lodge their 2019/20 Individual tax returns by 30 June 2021. Lodgment deferrals with the ATO do not alter this requirement.
Services Australia needs such individuals' income details to balance payments for Child Care Subsidy and Family Tax Benefit.
If tax return lodgment is not made by 30 June 2021:
  clients receiving Child Care Subsidy may lose their ongoing entitlement and/or receive a debt from Services Australia and have to repay the amount received in the 2019/20 financial year; and
  clients receiving Family Tax Benefit may miss out on additional payments, may also receive a debt from Services Australia and/or may have their fortnightly payments stopped.

Do you use the Small Business Superannuation Clearing House?
The ATO has advised employers intending to claim a tax deduction for super payments that they
make for employees in the 2020/21 income year that any such payments must be accepted by the
Small Business Superannuation Clearing House ('SBSCH') on or before 23 June 2021.
This allows processing time for the payments to be received by their employees' super funds before the end of the 2020/21 income year.

Car parking threshold for 2022 FBT year
The car parking threshold for the FBT year commencing on 1 April 2021 is $9.25.
This replaces the amount of $9.15 that applied in the previous FBT year commencing 1 April 2020.

Luxury car tax thresholds
The ATO has updated the luxury car tax ('LCT') thresholds for the 2021/22 financial year. The LCT threshold for fuel efficient vehicles in 2021/22 is $79,659 (up from $77,565 in 2020/21) and the LCT threshold for other vehicles in 2021/22 is $69,152 (up from $68,740 in 2020/21).
Note that these thresholds determine whether LCT is payable, and are different from the luxury car depreciation limit of $60,733 for 2021/22.

New ATO data-matching programs involving property
The ATO has advised that it will engage in two new data matching programs dealing with property transactions, as outlined below:
 The ATO will acquire property management data from property management software providers for the 2018/19 through to 2022/23 financial years (relating to approximately 1.6 million individuals); and
 The ATO will acquire rental bond data relating to approximately 350,000 individuals from state and territory rental bond regulators bi-annually through to 30 June 2023.

Get ready for the new financial year
The countdown to 30 June has begun.  The Federal Government confirmed that the $1,080 low and middle income tax offset will be extended to the year ending 30 June 2021.  Eligible taxpayers must lodge their 2021 return to claim the rebate.  You can lodge your 2021 tax return after 1 July 2021.
As usual, the new financial year brings new tax rules.  Some of the big changes that take place on 1 July include: 

​
1.  Increase to the superannuation guarantee contribution rate. 
The minimum super contribution rate will increase from 9.5% to 10%.  Clients who charge out labour should review their rates and factor this increase into their rates going forward.
 
2.  Increase to the concessional and non-concessional superannuation caps.
The annual concessional or tax deductible cap goes from $25,000 to $27,500.  Depending on your total superannuation balance your non-concessional annual cap may increase from $100,000 to $110,000.
 
3. Single touch payroll (STP) reporting 
Most businesses have been reporting their wages through STP for two years.  The exemptions for micro and family employers run out on 30 June and from 1 July all employers will need to report wages through STP.

Government proposal to modernise business communications
The Government has committed to modernising certain laws so that they are 'technology neutral', to enable easier communication between businesses, individuals and regulators.
The first phase of legislative reform will focus on key areas raised by stakeholders which are implementation-ready (ideally by the end of 2021),
including:
 expanding the range of documents that can be validly signed electronically;
 increasing the range of documents that can be sent electronically to shareholders and amending requirements to contact lost shareholders;
 improving flexibility for customers when changing address and consenting to electronic communication with credit providers;
 removing prescriptive requirements for notices to be published in newspapers, where suitable alternatives have been identified; and
 addressing provisions in Treasury legislation where only non-electronic payment options are in place.

Subsequent phases will consider reforms in additional areas that could benefit from greater technology neutrality, including communication with regulators, and product disclosure and recordkeeping requirements.

ATO "keeping JobKeeper payment fair"
The ATO is using its compliance resources to maintain the integrity of the JobKeeper measure.
While most businesses and employees have done the right thing, the ATO has identified concerning and fraudulent behaviour as well as claims by a small number of organisations and employees, and will actively pursue these claims.
Some of the concerning behaviours the ATO is currently examining include:
 businesses that have:
   – made claims for employees without a nomination notice, or have not paid
their employees the correct JobKeeper mount (before tax);
   – made claims for employees where there is no history of an employment
relationship;
   – amended their prior business activity statements to increase sales in order to meet the turnover test; or
   – recorded an unexplained decline in turnover, followed by a significant
increase; and
 individuals who have knowingly:
   – made multiple claims for themselves as employees or as 'eligible business
participants'; or
   – made claims both as an employee and an 'eligible business participant'.

The ATO encourages all JobKeeper applicants to review their applications and contact the ATO if they have made mistakes (and the ATO may not pursue repayment of an overpayment in certain circumstances, such as for honest mistakes).
If anyone is concerned that someone is doing the wrong thing in relation to the JobKeeper payment, they are encouraged to tell the ATO about it. The ATO will be examining JobKeeper Tip-Offs and contacting businesses where it has concerns and needs more information.

Independent review service for small businesses made permanent
Following a successful multi-year pilot, the ATO’s small business independent review service will be offered permanently as a dispute resolution option for eligible small businesses.
ATO Deputy Commissioner Jeremy Geale said the service is all about ensuring small businesses are given the opportunity to achieve an independent, fast, free, and fair resolution when they disagree with the ATO’s audit position:
“Independence is critical when handling a dispute, so we ensure each and every independent review is done by an officer from a different part of the
ATO who was not involved in the original audit”.
The ATO’s small business independent review service is available to eligible small businesses with an annual turnover of less than $10 million in relation to disputes about income tax, GST, excise, luxury car tax, wine equalisation tax, and fuel tax credits, and is in addition to other dispute options.
Disputes about employer obligations like superannuation and FBT are not eligible for the independent review service. 
More information about the ATO’s independent review service, including how to request a review and eligibility criteria, is available on the ATO’s website.

ATO asks businesses to check if they are still using their ABNs
The ATO has advised that, if a business hasn’t used its ABN for a while, the ATO may contact them about cancelling their ABN.
The ATO may also contact them about their ABN if their business situation has changed.
To ensure businesses don’t miss out on Government support, including during unfortunate events, it’s essential that they regularly review their ABN details and keep them up to date (or cancel their ABN if the business is no longer
operating, so that Government agencies can tailor their support to those that need it).
It’s also important to check that the business has listed the physical address of the business, as otherwise it can be difficult for emergency services and Government agencies to make contact.
A business' mailing address and physical location address can be listed separately on its ABN data, and these (and other ABN details) can be checked
and updated online at any time.

Passenger movement data matching program
The ATO will access data from the Department of Home Affairs on passenger movements during the 2016/17 to 2022/23 financial years, and match it with certain sections of ATO data holdings to identify taxpayers that can be provided with tailored information to help them meet their tax and superannuation obligations, or to ensure compliance with taxation and superannuation laws.
Data items include names, dates of birth, arrival and departure dates, passport Information, and status types (visa status, residency, lawful, Australian citizen).
The ATO estimates that records relating to approximately 670,000 individuals will be obtained each financial year.

Super contribution caps will increase from 1 July 2021
The ATO has confirmed that, from 1 July 2021, the superannuation concessional and nonconcessional contribution caps will be indexed.
The new caps for the 2021/22 year will be: 
    Concessional Cap: $27,500
    Non-Concessional cap: $110,000 (or $330,000 over 3 years)
The total superannuation balance limit that determines if an individual has a nonconcessional contributions cap of nil will also increase from $1.6 to $1.7 million, effective from 1 July 2021.

JobKeeper comes to an end
The ATO has advised that the final JobKeeper payment will be processed in April 2021. Enrolled businesses do not have to do anything when the program closes, although they will need to complete their final March monthly business declaration by 14 April 2021.
Also, once a business is no longer claiming JobKeeper Payments, it may start to be eligible to receive the JobMaker Hiring Credit for any additional employees that started employment on or after 7 October 2020.

ATO loses case on JobKeeper and backdated ABNs
On 24 March 2021, the Full Federal Court handed down its decision in a case concerned with the
requirement that an entity claiming JobKeeper must have had an ABN on 12 March 2020, or a
later time allowed by the ATO.
The Registrar of the Australian Business Register had reactivated the relevant entity's previously
cancelled ABN after 12 March 2020, but with a backdated effective date on or before 12 March 2020.
The Court held that backdating an ABN to have an effective date on or before 12 March 2020 did not
satisfy the requirement for the entity to have had an ABN on 12 March 2020.
However, the Court also held that the ATO's decision not to allow the entity a "later time" to have an ABN was a "reviewable decision", and that the Commissioner's discretion should be exercised in these circumstances (i.e., the Court held that the entity should be entitled to JobKeeper).
The Court's decision does not change the need to satisfy all of the other eligibility requirements.
Where the ATO has postponed finalising a decision regarding a taxpayer's eligibility for JobKeeper (and/or the cash flow boost) pending the Court's decision, the ATO will contact the affected taxpayer shortly to provide them with an update.

First criminal conviction for JobKeeper fraud
A person claiming to be a sole trader was convicted of three counts of making a false and misleading statement to the Commissioner of Taxation, in order to receive $6,000 in JobKeeper payments to which he was not entitled, as he was not operating a genuine business and he had already agreed to be nominated by his full-time employer for the allowance.
The ATO has a dedicated integrity strategy that supports the administration of the Government’s
stimulus packages, with robust and efficient compliance systems that make it very easy to identify fraudulent behaviour and stop it.
ATO Deputy Commissioner Will Day said “Since the first payments were made in April, the ATO has monitored every payment, every day, every month, and will continue to do so until the last payment is made."

ATO's taxable payments reporting system update
The ATO has confirmed that more than 60,000 businesses have not yet complied with lodgment
requirements under the taxable payments reporting system ('TPRS') for 2019/20.
The TPRS is a black economy measure designed to assist the ATO to identify contractors who don’t
report or under-report their income.
The ATO estimates that around 280,000 businesses need to lodge a Taxable payments annual report ('TPAR') for the 2020 financial year. Importantly, 2020 was the first year that businesses that pay contractors to provide road freight, information technology, security, investigation, or surveillance services may need to lodge a TPAR with the ATO (in addition to those businesses providing building and construction, cleaning, or courier services).
Businesses who have not yet lodged need to lodge as soon as possible to avoid penalties. ATO Assistant Commissioner Peter Holt added that some businesses may not realise they need to lodge a TPAR, but may be required to, depending on the percentage of payments received for deliveries or courier services.
“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers. These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are 10% or more of the total
annual business income, you’ll need to lodge,” Mr Holt said.

FBT rates and thresholds for the 2021/22 FBT year
The ATO has updated its webpage containing the fringe benefits tax ('FBT') rates and thresholds for
the 2017/18 to 2021/22 FBT years.
Two amounts that were not previously announced for the 2021/22 FBT year are:
  the FBT record keeping exemption is $8,923 (up from $8,853 for the 2020/21 FBT year);
and
  the statutory or benchmark interest rate is 4.52% (down from 4.80% for the 2020/21 FBT year).

The ATO also separately released two taxation determinations setting out further rates and thresholds for the FBT year commencing on 1 April 2021, being:
  Motor vehicle (other than a car) — cents per kilometre rate; and
  Reasonable food and drink amounts for employees living away from home.

Please contact our office if you need more information about these rates or FBT in general.

Warning regarding new illegal retirement planning scheme
The ATO has recently identified a new scheme where SMSF trustees were informed that they could set up a new SMSF to roll-over the fund balance from the old SMSF and then liquidate their old SMSF, in an attempt to avoid paying potential tax liabilities.
The ATO warns that taking part in this arrangement and others like it can result in civil and criminal actions and could ultimately put the members' retirement savings at risk.
If a trustee of an SMSF believes they have been approached by a promoter of a retirement planning scheme, the ATO recommends they seek a second opinion from a registered tax agent or appropriately qualified financial adviser, and also report the promoter to the ATO.

New succession planning guide for family businesses
The Australian Small Business and Family Enterprise Ombudsman, in conjunction with Family Business Australia, has released a new online guide to succession planning — the “Introductory Guide to Family Business Succession Planning” — which provides a stepby- step guide to passing the family business on to
the next generation.
A recent report revealing that 54% of family businesses have no documented succession plan in place and no retirement plan for the current CEO.
The easy-to-read guide offers tips on how to handle tense conversations that can arise between family members throughout the transition phase.
The guide is free and available on both the Family Business Australia and the ASBFEO’s websites.