Many argue that nowadays a Christmas party is no longer valued -employees are over it, or It’s far too expensive.
All too true…Christmas parties can be costly, and we sometimes ask ourselves, after the fact, is it money well-spent? Maybe the money used to fund the annual Christmas do should be channelled into a bonus payment or extra time off?
In the spirit of the festive period, there are some valid reasons why you should absolutely have a Christmas party…
- People love them
- The best reward program
- A different kind of engagement
Yes, studies show that some employees would prefer the money was spent elsewhere. But that’s not because end-of-year parties are inherently bad – it’s because some of them happen to be terrible. Employers are fearful (and employees reluctant) to make the event what it’s supposed to be – a fun way to wind down a year.
It comes down to this: you don’t need to monitor everybody; you need a culture that doesn’t tolerate bullying and harassment. If the organisation has excelled at responding to complaints all year round and has made the workplace a safe place, your Christmas party is just going to be fun.
Celebrating together is far from unique to Australia; Australians uniquely treasure it.
The advantage of a Christmas party as a “reward” for employees is that it’s not connected to individual performance. It naturally emphasises the notion that everybody – from low-level staff members to the executive – are in the same boat. Nobody on this planet will understand the stress of your day-to-day work better than the people at your Christmas party.
The trick to making it a reward for everyone is avoiding a Christmas party that pretends a workplace culture exists that you don’t have. So, if you’re an office that likes a party, don’t make your event a temperance or wowsers convention. If you’re a more conservative organisation, don’t go hip and have a boozy costumed event.
The festive season is a chance for businesses to celebrate the year, bring some joy into the office, and blow off a bit of steam. While the office Christmas party can be the highlight of the year. There is the chance that some can have too much fun and end up with OHS or WHS issues, or those who find the holidays a difficult time can feel low spirited.
Because we want to help you have a fun and safe Christmas, we’ve highlighted some risks associated with the festive season – your responsibilities as an employer. And some tips to help make sure everyone has a Christmas party to remember for the right reasons.
Tips for a party people talk about (in a good way!)
- Remind staff about the standards of behaviour expected at a company event.
- Training staff or representatives to be on the lookout for any inappropriate behaviour and diffuse the situation.
- Employer “policies, practices and procedures” will be under the microscope if action is taken against an employee for bad behaviour while under the influence.
- Reviewing company policies related to sexual harassment, alcohol, and drugs to ensure nothing comes back to bite you should disciplinary action be required.
- Workplace functions, even if off-premises, become a ‘workplace’ for the purpose of Anti-discrimination and OHS or WHS legislation.
- Suppose you’re in a workplace where avoidance of excess is the ultimate wet blanket. There are other ways to mark the occasion.
- Avoid a Christmas party that pretends a workplace culture exists that you don’t have.
On 28.9.2021, a man from Sydney’s inner west became the 14th person to face charges relating to a deceptive $20 million fraud and money laundering operation.
The 54-year-old Earlwood man was set to appear before Downing Centre Local Court after being charged with recklessly dealing with the proceeds of crime to the value of $100,000 or more, contrary to section 400.4(2) of the Criminal Code (Cth). The maximum penalty for this offence is ten years imprisonment.
AFP investigators issued a court attendance notice on Thursday, 9 September 2021, as part of Operation Bordelon, following a close evidence review by federal prosecutors at the Commonwealth Director of Public Prosecutions. Operation Bordelon is a Serious Financial Crime Taskforce (SFCT) joint agency operation into a criminal syndicate using labour-hire and payroll companies associated with the building and construction industry to defraud the Commonwealth.
It was alleged in court that the man received and possessed a total of $456,150 that was proceeds of an illegal scheme to siphon off money that should have been remitted to the ATO and that he was reckless as to the fact that the money was the proceeds of crime.
He allegedly used two personal bank accounts to receive money from five other corporate entities set up to facilitate the fraud scheme. It will also be alleged the man was the sole director and secretary of a corporate entity that received payments from another entity established by the syndicate to launder money illegally diverted as part of the scheme.
AFP Detective Superintendent Matthew Ciantar said the growing list of people charged under Operation Bordelon highlighted the tenacity of AFP investigators and their ability to uncover the entire scope of criminal and offence committed by this syndicate.
According to Mr Ciantar
- The AFP understands that the sole purpose of organised crime is to make money. The best chance to inflict lasting damage on those seeking to accumulate significant wealth at the expense of the Australian community is to target their efforts to legitimise their proceeds of crime.
- The AFP issued a warning in August 2021 that anyone involved in this scheme should be worried as they would lay further charges if the evidence allowed. These new charges highlight commitment to ensuring serious criminal activity is brought to account and serve as another warning to others in the professional services industry seeking to facilitate organised crime activities.
ATO Deputy Commissioner and SFCT Chief Will Day said one of the common features of serious financial crime is businesses that may appear legitimate on the surface. Still, when you peel back the layers, you discover webs of criminal activity.
“Financial crimes cause real harm to people’s livelihoods and line the pockets of criminals. The SFCT takes these matters extremely seriously, and this latest charge shows that we take firm action against those who think they won’t be caught,” he said.
The director identification number (director ID) is a unique identifier that a director will apply for once and will keep forever.
If you’re a director or a corporate trustee of a self-managed super fund (SMSF), you will need to apply for a director ID.
You will be able to apply for a director ID from November 2021 on the new Australian Business Registry Services (ABRS) online. You will log in using the myGovID app.
When you must apply for a director ID depends on the date you became a director. You will need to apply for your director ID yourself to verify your identity. No one can apply for it on your behalf.
The introduction of director ID will create a fairer business environment by helping prevent false and fraudulent director identities. This will go a long way to better identifying and eliminating director involvement in unlawful activity.
As part of its Digital Business Plan, the Government has announced the full implementation of the Modernising Business Registers (MBR) program.
This program will:
- establish the new Australian Business Registry Services (ABRS)
- streamline how you register, view, and maintain your business information with the Government.
The MBR program will establish a new and modern registry service, the ABRS.
The ABRS will:
- progressively roll out between 2021 and 2024
- bring together the Australian Business Register (ABR) and more than 30 Australian Securities and Investments Commission (ASIC) registers in one place
- introduce the director identification number (director ID) initiative.
The program aims to:
- make it easier for businesses to meet their registration obligations – giving them more time to focus on their customers and business operations
- make business information more trusted and valuable
- improve the efficiency of registry service transactions.
The ABRS high-level milestones are to:
- establish the foundations for the new registry service
- introduce director identification numbers
- transition the companies register to the new registry service
- transition the business names register to the new registry service
- transition Australian business numbers (ABN) to the new registry service
- transition the professional and historical registers to the new registry service.
The new ABRS is now live and has information on the director ID requirement. From November 2021, you can use the ABRS to apply for your director ID.
To find out more, don’t hesitate to get in touch with us or go to Director identification number.
As the program rolls out, we’ll keep you up to date with any changes that may affect you.
What’s already changed?
On 15 April 2021, ASIC registry staff moved to the ATO in a Machinery of Government (MoG) administrative change to help the Registrar.
This was a staffing change only. It doesn’t change your registry obligations, how you interact with the ASIC registers or the ABR currently.
What’s not changing?
Registry data will continue only to be provided to other parties, including other areas of ASIC and the ATO:
- to maintain the registers
- if authorised by law.
The existing requirements for the collection, storage, integration, and management of data will be upheld.
For now, how you register, search, and get extracts of the registers and interact with the ABR and ASIC remains the same.
There will be a clear separation between registry functions and other functions of the ATO.
Director identification number
Director identification number (director ID) is a unique identifier you need to apply for once and keep forever.
You must apply for your director ID yourself to verify your identity. No one can apply on your behalf.
Your authorised agent can’t apply for a director ID for you. They can help you understand the new requirement and if you need to apply, and when.
The director ID application will be available from November 2021 at: abrs.gov.au.
To log in to ABRS online, you’ll need to use the myGovID app, set to a Standard or Strong identity strength. If you haven’t already, you can set up your myGovID now.
To find out more, see How to set up myGovID.
Administering the MBR program
On 4 April 2021, the Commissioner of Taxation was appointed as Registrar under the following:
- Business Names Registration Act 2011
- Commonwealth Registers Act 2020
- Corporations Act 2001
- National Consumer Credit Protection Act 2009.
The Registrar’s role is to:
- lead and implement the MBR program
- perform statutory registry functions
- exercise powers under the relevant laws.
Initially, this will also include assisting ASIC in performing statutory registry functions and exercising its powers as a delegate of ASIC. At a later stage, the Registrar will assume primary responsibility for those functions under law.
The ATO is rolling out the MBR program in partnership with:
- Department of Industry, Science, Energy and Resources
- Digital Transformation Agency.
The ATO treats cryptocurrency like shares and many other investments, so it is generally regarded as a capital gains tax (CGT) asset.
A CGT event occurs when disposing of cryptocurrency. Events can include selling cryptocurrency for a fiat currency, exchanging one cryptocurrency for another, gifting it, trading it or using it to pay for goods or services.
Investing in cryptocurrency
Most people hold cryptocurrency as an investment, which they hope grows in value over time to gain capital.
Each cryptocurrency is a separate asset for CGT purposes. When you dispose of one cryptocurrency to acquire another, you are disposing of one CGT asset and acquiring another CGT asset.
If you hold cryptocurrency for 12 months or more, you may be entitled to a 50% CGT discount to reduce any capital gains made when you dispose of it.
Mining or trading cryptocurrency
When people refer to themselves as a cryptocurrency trader, they are most probably an investor. Examples of businesses that involve cryptocurrency include trading and mining businesses.
For you to be carrying on business, consider the following matters are relevant:
- the nature and purpose of your activities
- the repetition, volume, and regularity of your activities
- whether you have a business plan, and your activities are organised in a business-like way.
If you are in business, the trading stock rules apply rather than the CGT rules. If the disposal of cryptocurrency is part of your business, then:
- the cost of acquiring cryptocurrency held as trading stock is deductible
- profits made are assessable as ordinary income, not as a capital gain.
Cryptocurrency as a personal use asset
Personal use assets are CGT assets that you keep mainly for personal use or enjoyment.
Some capital gains or losses from disposing of cryptocurrency that is a personal use asset may be disregarded.
Cryptocurrency is not a personal use asset if it is kept or used mainly:
- as an investment
- in a profit-making scheme
- in the course of carrying on a business.
The relevant time for working out if an asset is a personal use asset is at the time of disposal.
The way a cryptocurrency is kept or used may change. For example, it may have been acquired for personal use and enjoyment but ultimately kept or used as an investment to profit when disposed of or as part of carrying on a business.
The longer it is held, the less likely it will be a personal use asset – even if you ultimately use it for personal use or consumption.
Only capital gains made from personal use assets acquired for less than $10,000 are disregarded for CGT purposes. However, all capital losses made on personal use assets are disregarded.
Key things to remember:
- Deduct capital losses in the same year they occurred. Carry forward net capital losses to later income years to offset future capital gains.
- When transferring cryptocurrency from one wallet to another, it is not considered a CGT disposal if ownership of the coin is maintained.
- Get the cost base right by including things like brokerage fees, transfer costs, platform costs, borrowing expenses, interest on loans and legal fees.
- Keep records including:
- – receipts and details of the type of coin, purchase price, date, and time of transactions in Australian dollars
- – records for any exchanges, their digital wallet, and keys, and what they paid in commissions or brokerage fees
- – records of a tax agent, accountant, and legal costs.
On 20.10.2021, the Federal Government introduced into Parliament a Bill to modernise the Corporations Act 2001 by permanently allowing companies to use technology to meet regulatory requirements under the legislation.
The Corporations Amendment (Meetings and Documents) Bill 2021 (the Bill) will allow companies and registered schemes to hold virtual meetings, distribute meeting-related materials and validly execute documents. These reforms build on recently renewed temporary relief, which will remain in place until 31 March 2022.
Specifically, the permanent reforms:
- ensure that meetings can be held physically, as a hybrid or, if expressly permitted by the entity’s constitution, virtually, provided that members, as a whole, are given reasonable opportunity to participate in the meeting
- ensure that companies and registered schemes can meet their obligations to send documents in hardcopy or softcopy and give members the flexibility to receive documents in their preferred format; and
- allow documents including deeds to be validly executed in technology-neutral and flexible manners, including by company agents.
These reforms will provide relief to around one million operating businesses and are estimated to deliver deregulatory savings of $450 million each year, averaged over 10 years. They will be reviewed two years after the legislation commences to ensure that they are operating as intended.
Importantly, the Bill ensures that companies can continue to meet their obligations amid the uncertainty of the COVID‑19 pandemic.
The Government will continue ensuring Australia’s regulatory settings are fit‑for‑purpose as we emerge from the pandemic, rebuild our economy and secure Australia’s future.
Claiming deductions for additional running expenses incurred whilst working from home due to COVID-19
This was updated on 15.10.2021, and it is timely to re-cap on the four key examples in PCG 2020/3.
Example 1 – not working from home
Abed’s employer has requested staff take leave while the business is suffering a downturn due to COVID-19. Abed takes four weeks annual leave. He occasionally checks his email during that period to see if he needs to keep abreast of anything while on leave. His employer also sends him text messages to keep him up to date on changes to the business.
This would not qualify as working from home as Abed is on leave and not actively working; he is just occasionally checking in. As such, Abed cannot rely on this Guideline.
Example 2 – working from home
Bianca is a sole trader who works as a copywriter and editor. She usually works out of a shared workspace in the central business district as it is easier to meet with her clients face-to-face. Bianca decides to work from home due to COVID-19 and replaces her face-to-face meetings with online video conferencing. Bianca continues to operate her business and would meet the criteria for working from home. As such, Bianca can rely on this Guideline to claim her additional running expenses.
Example 3 – additional running expenses incurred – existing arrangement
Duyen is an employee of an online trading business. Duyen spent two days working from home and three days working at her employer’s office until the end of February. As a result of COVID-19, she starts working from home five days per week from 1 March 2021. From 1 July 2020 to 29 February 2021, Duyen uses the current fixed rate of 52 cents per hour to calculate her additional running expenses, including electricity expenses, cleaning expenses and the decline in value and repair of her office furniture. She also calculates her work-related phone and internet expenses using the itemised phone bill for one month on which she has marked her work-related phone calls and the four-week representative diary of internet usage that she kept.
As Duyen is working from home, she can rely on this Guideline to claim her additional running expenses for the period from 1 March 2021.
Duyen ends up working from home for five days per week until 30 June 2021 due to COVID-19. Rather than continuing to use the current fixed rate and working out the actual expenses, she incurred on her phone and internet expenses. From 1 March 2021 to 30 June 2021, Duyen decides, for simplicity, to calculate all of her running expenses using the shortcut rate. Duyen uses the timesheets she must provide to her employer to calculate the number of hours she works from home from 1 March 2021 to 30 June 2021 and keeps those timesheets as evidence of her claim.
Example 4 – additional running expenses incurred – business owner
Elizabeth runs a small business selling art and framing pictures. She has a store with a workshop to display the art and frames. She also does all her bookkeeping and administrative tasks in the office at the store. As a result of the downturn in people coming into her store due to COVID-19, Elizabeth decides to close her store and continue running her business online from home. As Elizabeth continues to run her business from home due to COVID-19, she can rely on this Guideline to claim her additional running expenses.
It’s a long way to 30.6.2022 but consider the following strategy…
You are on the second-highest marginal tax bracket (39%) and earn $140,000 a year.
Your employer pays statutory superannuation… currently, 10%, which is $14,000 a year.
You have $13,500 in the bank earning negligible interest. On this interest, you pay tax at 39%.
Normally you claim $1,000 in work-related expenses and receive a tax refund of around $400.
Prior to 30.6.2022, you top up employer super contributions with personal contributions of $13,500 from your bank deposit to take full advantage of the 2022 cap limit, which is $27,500.
You have your 2022 tax return prepared in July 2022 and soon thereafter receive an income tax refund of $5,655.
You may then again consider putting this windfall into super as well with a view to cater in the 2022-23 tax year, topping up this amount to take full advantage of the $27,500 cap limit.
What you are effectively doing is maximising your retirement benefits while placing investment funds in a tax shelter.
Along the way consider this strategy with any windfall amounts you receive. You will be glad that you did!
Tax law has been amended so that from 14 December 2021, all non-government deductible gift recipients (DGRs) will need to register as a charity.
This amendment does not apply to ancillary funds or DGRs specifically listed in tax law.
Suppose your DGR is not already a registered charity. In that case, you will need to take steps to register with the Australian Charities and Not-for-profits Commission (ACNC).
Transitional arrangements are available to provide you with additional time to meet the new requirements. Check on the ATO website if your organisation is eligible for the following transitional periods:
- a 12-month transitional period to become a registered charity
- an additional three-year extension by application.
The ATO is willing to provide further guidance if you have questions about DGR endorsement, the transitional arrangements or what steps you need to take. Phone us directly or the ATO on 1300 130 248 between 8.00 am and 6.00 pm, Monday to Friday.
On 31 October 2021, the global economy took a step closer to a minimum corporate tax of 15 per cent. After our Prime Minister and other G20 Leaders endorsed the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS), proposed tax reforms overnight.
This follows G20 Finance Ministers and Central Bank Governors pledging support for the OECD BEPS proposal on 13 October, vowing to work together to achieve a possible 2023 start date consistent with the OECD’s implementation timeline.
On 9 October, 136 members of the OECD BEPS, representing more than 90 per cent of global GDP, agreed to a new tax system to help ensure that multinationals pay their fair share of tax globally and in Australia. This will put a floor on the “race to the bottom” on corporate tax rates and support the domestic and global economy.
Australia has played a key role in driving these reforms, including ongoing engagement in the OECD-led multilateral process. A process that complements the strong action the Government has taken to strengthen the integrity of Australia’s corporate tax system and prevent multinational tax avoidance.
The Government has implemented more than a dozen measures to address corporate and multinational tax avoidance, including:
- the Multinational Anti-avoidance Law;
- the Diverted Profits Tax;
- increased tax penalties for large entities; and
- establishing a Tax Avoidance Taskforce within the ATO.
Since 1 July 2016, the ATO has raised more than $22.9 billion in tax liabilities against large public groups, multinational corporations and privately-owned and wealthy groups.
The Government has also extended the GST to imported digital products and services from 1 July 2017, low value imported goods from 1 July 2018, and offshore sellers of hotel bookings in Australia from 1 July 2019.
We refer you to Section 36A 70-100.
Please note: Our Newsletters are not the place for the giving or receiving of financial advice concerning investment decisions or tax or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Any ideas and strategies should never be used without first assessing your own personal needs and financial situation, or without consulting or engaging with us as your professional advisors.