​As the end of the financial year (EOFY) approaches, it's important for business owners to start preparing their finances and tax obligations to avoid any last-minute hassles. By taking a proactive approach and getting organised before the EOFY, you can ensure that your business is compliant with tax regulations and maximise your tax deductions. Here are some things to consider when preparing for EOFY: 
 

• Review your financial statements: Before you start preparing your tax return, review your financial statements to ensure they are up-to-date and accurate. This includes your profit and loss statement and balance sheet.
• Collect and organise receipts: Keep track of all your business expenses and ensure that you have receipts or other documentation to support them. Make sure that all expenses are categorised correctly and that you're not claiming personal expenses as business expenses. 
• Check your stock levels: If you carry stock, it's important to perform a stocktake and ensure that your stock levels are accurate. This will help you determine your cost of goods sold and the value of your stock for tax purposes. 
• Review your debtors and creditors: Review your accounts receivable and accounts payable to ensure that they are accurate and up-to-date. Follow up on any outstanding debts or invoices before the end of the financial year. 
• Consider pre-paying expenses: If you have any expenses that are due early in the next financial year, you may be able to pre-pay them before the EOFY to claim them as a tax deduction in the current financial year. 
• If your business employs staff check that your reporting obligations are up to date.  Keep in mind that the superannuation guarantee rate and payroll tax rate will change on 1 July 2023.
• Consult with your accountant: Speak to your accountant before the EOFY to get advice on any tax planning strategies that may be available to you. Your accountant can also help you prepare and file your tax return and ensure that you are compliant with all tax regulations. 

 
 
By taking the time to prepare for EOFY, you can ensure that your business is in good financial health and minimize your tax liabilities. Don't wait until the last minute – start preparing now to make the most of the opportunities available to you. For more information or to schedule a consultation with one of our experienced accountants, contact us today. 

New 15% super tax to apply from 1 July 2025
The Government recently announced it will be imposing a 15% additional tax on individuals that
have more than $3 million in superannuation. The new measure is expected to commence from 1
July 2025 (i.e., the start of the 2026 income year).

The main takeaways from the information provided thus far include the following:
 The additional 15% tax will broadly apply to the annual movement in the value of an individual’s superannuation balance, adjusted for withdrawals and contributions. These ‘earnings’ are further adjusted to ensure only the proportion corresponding to the balance above $3 million will be subject to the new tax.
 There will be no limit imposed on the size of superannuation account balances.
 Individuals will have the choice of paying the tax liability personally or from their super fund.

In current terms, the Government expects that the new tax will apply to 0.5% of people with money in
superannuation (around 80,000 people).
However, the proposal does not currently allow for indexation of the $3 million threshold, so more
individuals may be impacted in the future. The Government will consult on the implementation of this proposed measure, so expect to hear much more about it before 2025!

Start thinking about your FBT obligations
​
The 2023 FBT year ended on 31 March, so it is now time for employers to get ready to lodge their 2023 FBT returns, where they have provided benefits to their employees (or their associates) between 1 April 2022 and 31 March 2023. 

If you have provided fringe benefits to employees during the year, we are able to assist you with
satisfying the following requirements: 
 self-assessing your FBT liability for the FBT year;
 lodge an FBT return (if you have an FBT liability or paid FBT instalments through your activity statements);
 pay the FBT you owe by the due date; and 
 calculate the reportable fringe benefits amount to be included on each employee’sincome statement or payment summary (if the total taxable value is more than $2,000).
Employers that have an FBT liability for the year ended 31 March 2023 are generally required to lodge their FBT return and pay their FBT liability by 26 June 2023, where they lodge their FBT return electronically through a registered tax agent (noting the usual due date of 25 June falls on a weekend this year). Employers that are not included on a registered tax agent’s FBT client list must generally lodge an FBT return by 22 May 2023.

Employers do not need to lodge an FBT return if they are not liable to pay FBT for the year and have not paid FBT instalments during the year.

If you are registered for FBT but do not think you need to lodge a 2023 FBT return, please contact our office so that we can confirm and let the ATO know before the due date, to ensure the ATO will not seek a return at a later date.
Please contact our office to ensure you are ready for FBT season and confirm what information we will need from you to lodge your 2023 FBT return by the due date

FBT exemption for electric cars

Until recently, the FBT consequences for providing electric cars to employees were effectively the same as any other car. However, from 1 July 2022, FBT is no longer payable on benefits provided for eligible electric cars and associated expenses. Practically, this exemption will be relevant for the first time in the 2023 FBT
year.
Broadly, benefits provided for electric cars will be exempt from FBT where the following criteria are met:
 the car is a zero- or low-emissions vehicle;
 the first time the car is both held and used is on or after 1 July 2022;
 the car is used by a current employee or their associate(s) (e.g., a family member); and
 luxury car tax has never been payable on the importation or sale of the car.

Registration, insurance, repairs, maintenance and fuel expenses provided for eligible electric cars
are also exempt from FBT.
​
Note that, while the benefit is exempt from FBT, the taxable value of the benefit must still be determined when working out whether an employee has a reportable fringe benefits amount to be included on their income statement or payment summary.

Please contact our office if you have any queries about this new exemption and how it may affect your obligations for the 2023 FBT year.

Tips to reduce study and training loan balances

If you have a study and training loan balance (e.g., a HELP debt), it may be worthwhile to consider methods of reducing the balance to ensure you are not left with a large tax bill when your 2023 income tax return is lodged.
While there is no interest charged on study and training loans, indexation is added to these debts on 1 June each year, based upon the consumer price index (‘CPI’). Given the current rate of inflation, individuals with study and training loan balances should expect a larger than normal adjustment this year.
If you have a study and training loan balance, it is worth checking your loan balance and considering
the following tips:
 Let your employer know if you have started studying or have a study loan.
 Check the amount your employer is withholding. If there has not been enough withheld to cover your compulsory repayment, you can ask your employer to increase the withholding amount.
 Make a voluntary repayment to reduce your total loan amount. Indexation on the loan is applied on 1 June, so a voluntary repayment prior to this date will reduce the balance that indexation is applied to. Note that it may take a few business days for the ATO to receive and process the payment.

Indexation will not apply to a study and training loan on 1 June if the balance is nil. Any loan debt
over 11 months old will be subject to indexation. The compulsory repayment threshold for the 2023
financial year is $48,361. If you earn over this amount, the compulsory repayment is worked out when your tax return is lodged, and it will be included on your notice of assessment.

Reminder of March 2023 Quarter Superannuation Guarantee (‘SG’)

Employers are reminded that the SG obligation for the 1 January 2023 to 31 March 2023 quarter is due by 28 April 2023.
If the correct amount of SG is not paid by an employer on time, they will be liable to pay the SG charge, which includes a penalty and interest component.
​
As a reminder, from 1 July 2022, the compulsory SG rate increased to 10.5% (previously 10%).
The compulsory SG rate will increase again to 11% for the period 1 July 2023 to 30 June 2024. So now might be a good time to ensure your payroll systems are updated by the start of the next income year.

Partnering with a great accountant can be a game-changer for any business. A good accountant can help you to navigate the complex world of taxes, regulations, and financial management, and provide valuable advice to help you achieve your business goals. Here are some reasons why it is important to have the right accountant for your business: 
·        Compliance: A good accountant will ensure that your business is compliant with all relevant tax laws and regulations. This can help to minimize the risk of fines, penalties, and legal action. They can keep you updated with the latest tax regulations and ensure that you are paying the right amount of tax. 

·        Tax planning: A good accountant will work with you to develop a tax plan that effectively manages your tax liability. This can help to save you money and keep more of your profits. They can help you to identify tax-saving opportunities and provide strategies to reduce your tax bill. 

·        Business advice: A good accountant can provide valuable advice to help you make informed business decisions. This includes things like budgeting, cash flow management, and financial forecasting. They can help you to understand your financials and provide insights on how to improve your bottom line. 

·        Record keeping: A good accountant will ensure that your financial records are accurate and up-to-date. This includes things like invoicing, payroll, and bookkeeping. They can help you to keep track of your financial transactions, and provide reports that give you a clear picture of your financial position. 

·        Business strategy: A good accountant will understand your business and industry, and can help you to develop a strategy that aligns with your goals and objectives. This includes things like cost reduction, growth strategies, and exit planning. They can provide insights on how to improve your business performance and help you to plan for the future. 

·        Time-saving: A good accountant will save you time by handling all of your financial and tax-related tasks, allowing you to focus on running your business. They can take care of your financials and provide you with the information you need to make informed decisions. 
​
In conclusion, partnering with a great accountant can bring numerous benefits to your business. A good accountant can help you to stay compliant, minimize your tax liability, provide valuable financial advice, keep your records accurate, develop a sound business strategy, and save you time. By working with a great accountant, you can feel confident that your financials are in good hands and focus on growing your business. 
 

​Accountancy is the process of measuring, processing, and communicating financial information about an organisation. This includes things like maintaining and analyzing financial records and preparing financial statements and cash flow projections. Accountancy is a critical function for any organisation, as it helps to provide insight into the financial health and performance of a business. 
 
There are different types of accountancy, such as financial accounting, management accounting, and tax accounting. Financial accounting focuses on providing financial information to external stakeholders, such as investors and creditors. Management accounting focuses on providing financial information to internal stakeholders, such as management and employees, to help them make informed decisions. Tax accounting focuses on ensuring compliance with tax laws and regulations and effectively managing a business's tax liability. 
 
The field of accountancy is also regulated, and there are different professional qualifications, such as a Certified Public Accountant (CPA) or a Chartered Accountant (CA), that are awarded to those who pass rigorous exams and meet experience requirements.  CPAs and CAs must comply with the professional standards issued by the Accounting Professional & Ethical Standards Board (APESB).
 
Overall, accountancy is the process of measuring, processing and communicating financial information about an organisation, it encompasses different types of accountancy, such as financial accounting, management accounting and tax accounting, and it is a regulated field with different professional qualifications. It is a critical function for any organization as it helps to provide insight into the financial health and performance of the business. 
 

When it comes to running a business, one of the most important decisions you will make is choosing an accountant. A good accountant can help you grow your business and ensure that your finances are in order, while a not so good accountant can cause more harm than good. That's why it's crucial to find an accountant who is not only experienced and knowledgeable but also someone you can work with as part of a team. 
 
At S.H Tait & Co, we understand the importance of having a strong relationship between a business owner and their accountant. We believe that the key to success is building a partnership based on trust and communication. Our team of experienced accountants work closely with our clients to provide tailored solutions that meet their specific needs and goals. 
 
Here are some key factors to consider when choosing an accountant to help you grow your business: 
Experience and Qualifications
The first thing to consider is the experience and qualifications of the accountant. You want to find someone who has the expertise and knowledge to help you navigate the complexities of tax and finance. Make sure to ask about their experience working with businesses similar to yours, and check if they have relevant certifications such as being a registered tax agent. 
 
Communication and Availability
Another important factor to consider is communication and availability. You want an accountant who is responsive and available to answer your questions and provide guidance when you need it. A good accountant should be able to explain complex financial information in a way that is easy to understand. 
 
Teamwork and Collaboration
Lastly, it's important to find an accountant who is willing to work with you as part of a team. This means collaborating with you to develop a strategy that aligns with your business goals. Your accountant should be able to provide insights and advice to help you make informed decisions, and be willing to work closely with other members of your team, such as lawyers or financial planners. 
 
In conclusion, finding the right accountant is crucial to the success of your business. At S.H Tait & Co, we believe that building a strong relationship based on trust and communication is essential to achieving this success. Our experienced team of accountants is here to help you grow your business and achieve your financial goals. Contact us today to learn more about how we can help you! 

Significant change to claiming working from home expenses

Before 1 July 2022, an individual taxpayer that incurred additional deductible expenses as a result of working from home, had a choice of three methods to claim these expenses.
These choices were:
 The shortcut method – which was available from 1 March 2020 to 30 June 2022;
 The fixed-rate method – which was available from 1 July 1998 to 30 June 2022; or
 Actual expenses, that is calculating the actual expenses incurred as a result of working from home (Editor: This method can be burdensome to apply in practice)

From 1 July 2022, as a result of the release of PCG 2023/1 by the ATO, the shortcut method and the fixed-rate method have been abolished.
A replacement method that can be used instead of the actual expenses method (which has not been abolished) is the revised fixed-rate method.
Under the revised fixed-rate method, a deduction can be claimed of 67 cents per hour for energy
expenses (electricity and gas), internet expenses, mobile and home phone expenses, and stationery and computer consumables.
Other expenses associated with working from home, such as depreciation of home office furniture and a personally owned computer used at home for work purposes, will need to be calculated on an actual basis when using the revised fixed-rate method.

To claim a deduction under the new fixed-rate method, an individual needs to meet three criteria,
which are:
The individual is working from home while carrying out their employment duties or carrying on their business on or after 1 July 2022;
 They are incurring additional running expenses of the kind outlined in the above discussion as to what the 67 cents per hour amount reflects, as a result of working from home;
 They keep and retain relevant records in respect of the time they spend working from home and for the additional running expenses (covered by the rate per hour) they are incurring.

There are strict record keeping requirements associated with this new method. 

For the year ending 30 June 2023, a taxpayer using this new method will need to keep a record which is representative of the total number of hours worked from home during the period from 1 July 2022 to 28 February 2023.
The taxpayer will also need to keep a record of the total number of actual hours they worked from
home for the period 1 March 2023 to 30 June 2023.
The record of the actual hours worked from home could be maintained by timesheets, rosters, timetracking
apps, logs of time spent accessing employer systems or online business systems, or a diary kept contemporaneously.

For the year ending 30 June 2024 and later income years, a taxpayer using this method must also keep a record of actual hours worked from home for the entire year.
Under both the short-cut method and the previous fixed-rate method, there was no need for detailed
record keeping of the actual hours worked from home. Estimates were acceptable. This is a significant change and increases the record keeping burden on taxpayers.
​
Another significant change, which results in an increase in record keeping obligations under the
revised fixed-rate method, is that in relation to running costs such as energy costs, phone and internet costs, a taxpayer needs to maintain at least one monthly or quarterly bill.
This is because the ATO now requires proof that the individual has incurred the running costs represented by the 67 cents per hour deduction.

Transfer balance cap indexation

An individual’s transfer balance cap (‘TBC’) determines the maximum amount they can commit to a retirement phase interest in their super fund, such as an account-based pension, without being subject to penal taxation.
When the TBC concept was introduced with effect from 1 July 2017, it was initially $1,600,000. It was
increased by $100,000 as of 1 July 2021 to $1,700,000.
The TBC increases in $100,000 increments (or multiples of $100,000) in line with the Consumer Price Index (‘CPI’).

As a result of a substantial increase in the CPI, the TBC is due to increase on 1 July 2023 by $200,000.
Accordingly, an increase in the TBC is seen as a good thing, as it potentially means an individual can have more of their superannuation interest supporting a tax-free pension.
Individuals who start their first retirement phase income stream (otherwise known as a pension) on or after 1 July 2023 will have a TBC of $1.9 million.
From 1 July 2023 individuals will have a TBC between $1.6 million and $1.9 million. An individual who already had a transfer balance account and at any time met or exceeded their personal TBC will not be entitled to indexation, and their personal TBC will remain the same.
For example, an individual who started their first retirement phase income stream, an account based pension, on 1 January 2022 with a value of $1,700,000 at the time of commencement, would have fully utilised their then TBC of $1,700,000.
​
Such an individual, having already fully utilised their TBC, will not gain any benefit from the increase in the TBC due to indexation. Where an individual has partially utilised their TBC before 1 July 2023, instead of benefiting from the full $200,000 increase in the TBC, they will have access to a proportional indexation of their TBC based on the unused cap percentage of their transfer balance account.

ATO and Australian Federal Police crackdown on GST-fraud promoters

A raft of enforcement activity has been undertaken across the country by the ATO-led Serious Financial Crime Taskforce, including the execution of search warrants and issuing of warning letters.
At 31 December 2022, the ATO took compliance action on more than 53,000 clients and stopped
approximately $2.5 billion in fraudulent GST refunds from being paid to individuals seeking to
defraud the system.
​
Two individuals have been sentenced to jail time for their crimes so far, following their arrest in
2022. This follows 87 earlier arrests across the country, with many more to come. The ATO has
commenced writing to more than 20,000 individuals involved in the fraud, warning them of the serious consequences coming their way unless they come forward and repay the money they have defrauded.
The fraud was first detected in early 2022 and involved offenders inventing fake businesses and Australian business number (ABN) applications, then submitting fictitious Business Activity Statements in an attempt to gain a false GST refund. 

Promoters of the fraud use social media and other channels to recruit participants. The ATO has been issuing warnings to the community to be on the lookout for fraud schemes that are being promoted through social media and other channels.

For those who may be tempted by the promise of big gains, the ATO has sophisticated risk models and works with banks, law enforcement agencies, and other organisations to share information and detect fraud. It also has access to intelligence through community tip offs, social media platforms, and other information sources.

Super guarantee contributions for the December 2022 quarter

A reminder to employers that their December 2022 superannuation guarantee (‘SG’) contributions were due by 28 January 2023.
Do not forget the two changes to SG that commenced on 1 July 2022:
 the rate increased from 10% to 10.5%
 employees no longer need to earn $450 per month to be eligible.

Employers now need to make super contributions for all eligible employees, regardless of how much
they were paid – their earnings amount is not relevant. However, employees who are under 18
still need to work more than 30 hours in a week to be eligible.

Electric vehicle FBT exemption legislation is now law
​
Legislation to make certain electric vehicles exempt from Fringe Benefits Tax (‘FBT’) has now
been enacted into law.
Certain zero or low emissions vehicles provided as a car benefit on or after 1 July 2022, can be
exempt from FBT.
​
For this exemption to apply various criteria need to be satisfied. The car needs to have been both held and used for the first time by the employer on or after 1 July 2022 and it cannot have been subject to the luxury car tax when it was purchased.
For the 2023 income year, to qualify for this exemption, the car needs to cost less than the luxury car tax threshold for fuel efficient vehicles of $84,916.
A vehicle is a zero or low emissions vehicle if it satisfies both of these conditions:
 It is a:
   – battery electric vehicle; or
   – hydrogen fuel cell electric vehicle; or
   – plug-in hybrid electric vehicle.
 It is a car designed to carry a load of less than 1 tonne and fewer than 9 passengers (including the driver).
Motorcycles and scooters are not cars for FBT purposes and do not qualify for the exemption,
even if they are electric.

Please note that in relation to plug-in hybrid electric vehicles, there is a specific limitation on
the FBT exemption.
From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions
vehicle under FBT law.
There are special provisions allowing the exemption to continue when a plug-in vehicle was
provided as an exempt benefit under an agreement entered into before 1 April 2025 that
continues after this date.

Although the private use of an eligible electric car is exempt from FBT, an employer still needs to
include the notional value of the benefit when working out whether an employee has a
reportable fringe benefits amount (‘RFBA’).
An employee has an RFBA if the total taxable value of certain fringe benefits provided to them
(or their associate) is more than $2,000 in an FBT year. The RFBA must be reported through Single
Touch Payroll or on the employee's payment summary.
The amount of an RFBA reported for an employee is not added to an employee’s taxable income for
determining income tax and Medicare Levy liabilities.

However, it is added to an employee’s taxable income for calculating Medicare Levy Surcharge
liability, and is included in income tests for family assistance, child support assessments, and some
other government benefits and obligations.

Further eligibility age change for downsizer contributions 

In another recent legislative change, the eligibility age to make a downsizer contribution into
superannuation has been reduced to 55 from 1 January 2023.

This further reduces the downsizer eligibility age,  which changed from 65 to 60 from 1 July 2022.
From 1 January 2023, eligible individuals aged 55 years or older can choose to make a downsizer
contribution into their super fund of up to $300,000 per person ($600,000 per couple) from the
proceeds of selling their home that has been held for at least 10 years and qualifies for at least a
partial main residence exemption.

There are no changes to the remaining eligibility criteria.
Key dates for downsizer contributions:
    Eligible individuals aged 55 years or older can make a downsizer contribution from 1 January 2023.
    For any downsizer contributions made between 1 July 2022 and 31 December 2022, eligible individuals must be aged 60 years or older at the time of making their contribution.
    Prior to 1 July 2022, the eligibility age was 65 years and over. 

Other important information to consider for 55-59 year olds:
   Individuals have 90 days from receiving the sale proceeds of their home to make a downsizer contribution.
This means if an individual receives the proceeds of sale prior to 1 January 2023,  they can make their contribution after 1 January 2023, so long as they are still making it within 90 days of receiving the
proceeds.
    If 1 January 2023 falls outside of their 90 day window to make a downsizer contribution, they will not be eligible. It is unlikely the ATO would grant an extension of time in these circumstances.
Unlike most other contributions into superannuation, there is no upper age limit for being eligible to make a downsizer contribution.

Even a 95 year could make a downsizer contribution, and there is no need to satisfy the work test!

Builder unable to obtain refund of incorrectly charged GST

The Administrative Appeals Tribunal has held that a builder was unable to receive a refund of GST
incorrectly charged on the sale of a residential premises that had been rented for just over five
years since construction was complete.

The taxpayer claimed the GST charged on a unit was charged in error, on the basis that the sale
was actually an input taxed supply. Accordingly, the taxpayer sought a refund of the GST
previously remitted to the ATO on the unit.

For residential premises to fall outside the definition of ‘new residential premises’ and
therefore be input taxed rather than a taxable supply, it needs to meet the requirements of S.40-
75(2)(a) of the GST Act.

Broadly, to meet the requirements of this section there needs to have been a continuous five-year
period since the premises first become residential premises, during which the premises have “only
been used for making supplies that are input taxed” (i.e., being used as a rental property).
Unfortunately for the builder, this requirement was not satisfied because the unit was also marketed
for sale a few months before the completion of the five-year period since the issue of the certificate of
occupancy.
​
A lesson to be learnt here is that any time a residential premises is both rented and on the
market for sale it does not meet the requirements to count towards the five-year continuous period
that it has “only been used for making supplies that are input taxed.”

ATO warning to SMSFs: "Paying the price for non-compliance"

There are various courses of action available to the ATO when trustees of self-managed super funds ('SMSFs') have not complied with the super laws, including applying administrative penalties.
A number of factors determine the amount of the administrative penalty, including:
 the type of contravention;
 when it occurred; and
 the number of penalty units that apply.

For example, if an SMSF contravenes a provision in relation to borrowings during the 2021/22 financial year, the ATO may apply a penalty of 60 penalty units and, at $222 per unit for that year, this would result in the SMSF trustee having to pay $13,320. This could be even more if there are multiple contraventions.
Note that the Government recently introduced a Bill to increase the value of a penalty unit for
Commonwealth offences committed on or after 1 January 2023 from $222 to $275.

The ATO imposed total administrative penalties of around $3.4 million on SMSF trustees last year for
contraventions such as trustees illegally accessing super benefits, loans, or financial assistance given to members.

Also, just because a trustee receives an administrative penalty doesn’t mean the ATO won't undertake any other compliance action, such as issuing a notice of non-compliance or disqualifying the relevant entity as a trustee.

ATO's record-keeping tips

The ATO has reminded taxpayers that they should understand the record-keeping requirements for
their business and keep accurate and complete records as they occur, as this should help them
avoid penalties that may apply and reduce the possibility of the ATO denying their expense claims.
The following are some of the ATO's top tips to help businesses get it right and avoid recordkeeping
errors (based on common record-keeping errors the ATO sees):

 Keep accurate records of all cash and electronic transactions.
 Reconcile cash and EFTPOS sales regularly (by ensuring payments recorded internally match external records) and enter the amounts into the main business accounting software system.
 Check for mistakes if things don't add up.
 For expenses that are for both business and private use, work out and record the business portion accurately.
 If the taxpayer has used trading stock for private purposes, remember to account for the stock as if the business sold it, and include the value in the business’s assessable income.
 Don't use estimates to prepare tax returns and business activity statements ('BASs').
 If claiming credits for GST, set aside the GST in a separate ledger account to make record-keeping and calculations easier.
 Most records must generally be kept for at least 5 years — from when the record was prepared or obtained, or the transaction or related acts were completed, whichever is later. Records relating to the calculation of losses may need to be kept longer, depending on when that loss is deducted (or offset against a capital gain).
 Accurate and detailed records must also be kept when paying contractors to provide certain services on behalf of the business (so the business can easily complete its taxable payments annual report at the end
of each year).
 Use the ATO's Record-keeping evaluation tool to find out how well the business is currently keeping its records.
​
If businesses aren't sure how this information applies to their situation, the ATO recommends they ask their registered tax or BAS agent, or contact the ATO for help. The ATO says it will help businesses get back on track if they make an error.

Input tax credits denied due to lodging BASs late

The Administrative Appeal Tribunal ('AAT') has held that a taxpayer could not claim $91,239 of input tax credits ('ITCs') at least partly because it lodged the relevant BASs more than 4 years too late.
Specifically, the GST Act operates such that, if an extension of time to lodge a BAS has not been
granted prior to the expiry of 4 years after the day on which it was required to be given to the ATO,
the entitlement to ITCs immediately ceases.

The AAT also noted that there is no discretion to circumvent this part of the GST Act, and the ATO
cannot provide further time to lodge a BAS retrospectively outside of the relevant 4 year period.
It did not matter that the taxpayer was (for example) involved in a dispute with a franchisor nor that they were impacted by lockdown restrictions.

Therefore, the taxpayer was no longer entitled to claim ITCs in relation to the BASs lodged by the taxpayer 4 years after they were required to have been given (and was also denied other ITCs for BASs that were lodged within the required 4 year period, as a substantial amount of the ITCs claimed remained unsubstantiated by a valid tax invoice).

Chef spending most of a year on cruise ships still a 'resident'

The AAT has also held that a taxpayer, an Australian chef with over 20 years’ experience both in Australia and overseas, was an Australian resident for taxation purposes in the 2016 income year.

During that year, he spent only 86 days in Australia, being the period prior to him leaving Australia to commence employment with a cruise ship company, and a period during which he visited his family between deployments. 

However, the AAT noted that he had no intention that any new place of residence be indefinite, and he did not become a resident of a new place. 

Importantly, his 'domicile' for tax purposes (being Australia) did not change (and the AAT stated that "a ship cannot be a domicile").

Requesting stapled super fund details for new employees

The ATO is reminding employers that, when they have new employees that have not provided them
with their choice of super fund, super contributions should be made into:
 the employee's stapled super fund; or 
 the employer's nominated account (but only if the ATO advises that the employee does not have a stapled super fund).

Editor: A stapled super fund is an employee's existing super account which is linked, or 'stapled', to them and follows them as they change jobs. In December 2022, the ATO is releasing a solution that enables employer software and payroll products to request stapled super funds. That is, stapled super enabled software will allow the employer to request stapled super details from within their business software, so they will no longer have to request them separately via ATO online services.
Employers should contact their software provider to find out if their software solution will incorporate
the stapled super functionality. 

The ATO also encourages employers using the 'bulk request process' to begin discussions with their software providers, as the ATO's current bulk request process will be decommissioned from mid-2023.

Director ID deadline is approaching

The Government has launched an awareness campaign to help company directors get their director identification number ('director ID') as the 30 November deadline approaches.

A director ID is a unique 15‑digit identifier that a company director will apply for once and keep forever. Director IDs are administered by the Australian Business Registry Services ('ABRS'), which is managed by the ATO.

All directors of companies registered with ASIC will need a director ID and must apply by the 30 November deadline (although directors of Aboriginal and Torres Strait Islander corporations may have additional time to apply).

Some people may not realise they are directors, so the campaign is targeting those that run small businesses, self‑managed superannuation funds, charities, not‑for‑profits, and even some sporting
clubs.

The fastest way to apply is online at abrs.gov.au, and the director ID will be issued instantly once the application is complete. It is free to apply and directors must apply themselves, as they are required to verify their identity (and it is this "robust identification process" that will help prevent the use of false and fraudulent director identities). 

More information about director IDs, including who must apply, is available on the ABRS website. 
​
Feel free to contact our office if you need more information about this but, as noted above, we cannot actually make the application for you.

Why are credits and refunds being offset?

The ATO has reached out to small businesses who may have recently received a letter advising that they have a debt on hold and any credits or refunds would be offset against this debt.

As a result, such a small business may find that their refund or credit is less than expected. The ATO has advised that this process of offsetting refunds or credits temporarily paused due to the pandemic and its financial impact on taxpayers. However, the ATO has restarted offsetting refunds and credits to pay off debts on hold since June 2022.

The ATO also sent out 'awareness letters' to some not-for-profits and individuals in September 2022,
similarly advising them they had a debt on hold and any credits or refunds would be offset against
this debt.

Taxpayers can use Online services for business to search for debts that were previously put on hold and not included in their account balance.
​
A debt on hold remains payable and collection action may recommence if:
   the taxpayer's circumstances change, and the ATO has reason to believe they are now able to pay the debt;
   the taxpayer agrees to pay their debt; or  the taxpayer has a refund or credit balance which will automatically be offset to their debt on hold.

ATO advice for SMSFs thinking about investing in crypto assets

The ATO recommends that trustees of self-managed super funds ('SMSFs') thinking about investing in crypto assets should seek professional advice from a licensed financial adviser.
There are organisations who offer trustees help to set up a fund or use their existing fund to invest in 
crypto assets.

However, the ATO notes that some of these organisations are not licensed to provide financial advice, which means the usual consumer protections and access to the Australian Financial Complaints Authority ('AFCA') are not available for using these services.
There are many things to consider before deciding to invest in crypto assets, so it's important to get it
right, especially since trustees are ultimately responsible for ensuring the investment complies with the super and tax laws.

When investing in crypto assets, trustees must ensure it is allowed under the fund’s trust deed, is made in accordance with the fund’s investment strategy, and the trustee has considered the level of investment risk given the highly volatile nature of the investment.
​
From a regulatory perspective it's important that:
   The crypto assets are owned by the fund and are held separately from the trustee's own personal or business assets. This means the fund must have its own digital wallet, separate to any used by the trustee
for personal or business purposes.
   The investment is valued at market value in line with the ATO's valuation guidelines.
   Any crypto assets that a member or related party hold personally are not sold to the fund or transferred to the fund as a contribution.
   The investment is consistent with the sole purpose test, and does not involve the giving of financial assistance to a member.

Check that holiday employees get the right super

The ATO is reminding employers that the holiday season is fast approaching, and that their holiday
casuals may now be eligible for super.
From 1 July 2022, employers need to pay super for employees at a rate of 10.5%, regardless of how much they are paid, because the $450-permonth threshold for super guarantee ('SG') eligibility has been removed.

This change doesn’t affect other eligibility requirements for SG. In particular, workers who are under 18 still need to work more than 30 hours in a week to be eligible.
For example, Anish is a 17-year-old employee working a job at a hotel over the holiday season.
Anish works 32 hours in a week at the hotel and earns $800 before tax. He also works 5 hours at his local café, earning $150.

As Anish worked more than 30 hours in one week at the hotel, his employer will need to pay him super on the $800 earned. However, as Anish works less than 30 hours a week at the café and is under 18, he is not entitled to super from this employer.
​
The ATO recommends that employers check their payroll and accounting systems are up to date so
they are correctly calculating their employees' SG payments, and that registered tax agents and BAS
agents can help with their tax and other obligations.

Optus data breach

The ATO is aware of the recent Optus data breach and that people who have been affected might be
concerned about their personal data, and is assuring people that ATO systems have not been
affected by the Optus data breach.

The ATO recommends that anyone who thinks they have been affected by the Optus data breach
should contact Optus Customer Service on 13 39 37.
Information for those caught up in the data breach is available from the Australian Cyber and
Security Centre at cyber.gov.au.
​
The ATO also reminds the community that it is important to always be vigilant for suspicious activity. The following tips can help protect accounts and keep personal information safe:
   Use multi-factor authentication for accounts where possible.
   Be careful when clicking on links and providing personal information.
   Make sure contact details are up to date when using online services.

Banking business income to a private account

The ATO has stated that it has "no concerns" with business owners banking their business takings or
other sales in private accounts, but that this may become an issue when this income isn't reported.

Therefore, the ATO notes that a good way to avoid this problem is to establish a separate business
bank account and only deposit sales and other business income into this account, as this can help
with record keeping and monitoring the business’s cash flow.

The ATO uses many tools to identify income earned and to check if it matches income reported, and reminds taxpayers that business income includes all sales, whether they're cash or electronic (for example, internet sales), and they must all be reported on the business’s tax return (as well as any earnings for services the business provides).

If you are unsure about what income you need to declare, feel free to contact our office.

'Talking tax' with new workers

The ATO is reminding employers that have taken on new employees that those employees can
complete a TFN declaration through ATO online services, and that this is an easy way for them to
provide both their employer and the ATO with the information needed.
If a new employee has a myGov account linked to the ATO, they can:
    access ATO online services;
    go to the ‘Employment’ menu; and
    select ‘New employment’ and complete the form.

This sends the TFN declaration details straight to the ATO, so the employer doesn't have to.

Employees will need their employer's ABN to complete the form and, once they’ve submitted it,
they need to print it and give their employer the summary of their tax details so the employer can
input the data into their system. If an employer's payroll software can link to the online commencement forms, it will automatically receive any new employees' information from the ATO, saving them time spent otherwise entering the information manually.

Employers can also use the New employment form to collect a range of information contained in
other forms, and employees can use it to authorise variations to the amount to be withheld
from their pay for tax or the Medicare levy, or to advise of their choice of super fund.

They can also use it to update their tax circumstances with their employer; for example, if their residency status has changed or they are claiming the tax-free threshold from a different employer.

However, employers can continue to use their current processes when preferred, including providing a paper TFN declaration where employees can't create a myGov account or don’t have access to the internet.

How the myGov update affects taxpayers

Clients using myGov will see that it has recently been updated with a new look and more features. 
When signed in to myGov, clients might receive notifications through ‘Payments and claims’ from
other government services, such as Centrelink.

However, the ATO has stated that it will not communicate using this feature. Instead, the ATO
will continue to send messages to the myGov Inbox, and to tax agents on behalf of their clients,
if that’s their communication preference.

Therefore, clients don’t need to do anything different, and can still:
    find myGov at the same website address (i.e., my.gov.au);
    sign in using their current sign-in details; and
    have access to all their linked services, including the ATO.

Input tax credits denied due to lodging BASs late

The AAT has held that a partnership’s entitlement to $16,361 of input tax credits claimed for the
quarterly periods of 1 July 2012 to 31 March 2017 had ceased by the time the associated BASs were
lodged with the ATO on 21 June 2021, and therefore the ATO did not need to pay the taxpayer a refund.

The operation of the GST Act means that, unless an extension of time to lodge a BAS has been
granted prior to the expiry of 4 years after the day on which it was required to be given to the ATO,
the entitlement to input tax credits immediately ceases.

The ATO has no discretion to get around this.

Valuing fund assets for an SMSF's annual return

Editor: The ATO has provided the following reminder and general advice for SMSF trustees regarding their obligations to value the assets annually.

One of many responsibilities trustees have when managing an SMSF is valuing the fund's assets at
market value.

This must be done every income year, so the ATO knows the SMSF has complied with super laws.
The market value of an asset is the amount someone could be reasonably expected to pay if
the asset was for sale.

Each year, the asset valuations will be reviewed by the fund's approved SMSF auditor as part of
the annual audit prior to lodgment of the SMSF's annual return ('SAR'). The auditor will check that
assets have been valued correctly, and assess and document whether the basis for the valuation
is appropriate given the nature of the asset.

Trustees are reminded to get their valuations done before they go to the auditor, as this will streamline
the process and avoid delays. It is also the trustees' responsibility to provide objective and
supportable evidence to the auditor for the valuation of the fund's assets, including all relevant documents requested by the auditor.

Failure to do so could result in a delay in auditing the fund and potential late lodgment of the fund's
annual return (and could also result in a contravention if the auditor believes mistakes have been made).

The ATO says trustees should "start researching now" to find who can value the fund's assets and
what type of evidence is needed to support the valuation, as this can take time. In some instances, the law requires valuations to be undertaken by a qualified, independent valuer.

Super guarantee contribution due date for September 2022 quarter

The due date for employers to make super guarantee contributions for their employees for the September 2022 quarter is 28 October 2022.

Varying PAYG instalments

The ATO is reminding taxpayers that they can vary their pay as you go ('PAYG') instalments if they think the amount they pay now will be more or less than their expected tax liability for the year, by lodging a variation through myGov or Online services for business.

Instalments for those who are PAYG instalment amount payers have been increased by the gross domestic product ('GDP') adjustment factor of 2% for the 2022/23 income year.