This provides an update of amounts that the Commissioner will accept as estimates of the value of goods taken from trading stock for private use by taxpayers in named industries.
The Schedule for the value of goods taken from trading stock for private use in the 2020-21 income year is:
|TYPE OF BUSINESS||AMOUNT (EX GST) FOR ADULT/CHILD OVER 16 YEARS||AMOUNT (EX GST) FOR CHILD 4 TO 16 YEARS OLD|
|Takeaway food shop||$3,670||$1,835|
|Mixed business (includes milk bar, general store, and convenience store)||$4,460||$2,230|
The end of the 2020-21 FBT year (1 April 2020 to 31 March 2021) is fast approaching, we bring this to the attention of those who have never lodged an FBT return.
Employer provided cars and other motor vehicles are normally subject to FBT (some exemptions apply for commercial vehicles). Cars can be valued for FBT purposes using either the statutory formula method or the operating cost method. FBT then applies to the private (i.e., non-business) use. The statutory formula method assumes a certain level of business use which varies with the cost of the car and other factors. The logbook method uses a logbook to determine the level of business use.
Employers should now closely consider each car they provide to employees before using the statutory formula method and decide whether the operating cost method (and logbook) produces a lower FBT liability.
Where a Fringe Benefit is supplied to an employee who is a director/shareholder or family member, FBT and the necessity to lodge a return is sidestepped by re-imbursement for the taxable value of the Fringe Benefit. These reimbursements may be actual or by way of loan account. This becomes problematical for “arm’s length” employees.
This issue can sneak up on employers who initially may only have 1-2 staff members being supplied with vehicles only to see the number increase with business expansion.
There are a number of other Fringe Benefits so if you require assistance, please contact us. This is an area of ATO focus.
The ATO has informed tax agents that fringe benefits tax (FBT) returns can only be lodged through the practitioner lodgement service (PLS).
The statutory due date for lodgment and payment is 21 May. The due dates for lodgment of 2021 FBT returns for all tax agents are:
- 25June if the return is lodged electronically.
- 21May if the return is lodged by paper.
The due date for payment under the lodgment program remains as 28 May or 21 May if lodging by paper.
To ensure you are covered by your lodgment program for their 2020 FBT return, you must appoint your tax agent in that role by 21 May.
Did you make a disclosure to be eligible for the superannuation guarantee (SG) amnesty?
To avoid being disqualified from the SG amnesty, taxpayers who disclosed unpaid super and qualified must either:
- Pay in full any outstanding amounts they owe.
- Set up a payment plan and meet each ongoing instalment amount.
The ATO are sending reminders to your clients who made amnesty disclosures to pay their disclosed amounts if they have not previously engaged with them. You will have 21 days to avoid being disqualified from the amnesty. If we can assist, please contact us.
In January the ATO issued an addendum to a determination on effective salary sacrifice arrangements for individuals under a contract principally for labor and others deemed to be employees for superannuation guarantee (SG) purposes under s 12(3) or 12(8) of the Superannuation Guarantee (Administration) Act 1992.
The addendum to Superannuation Guarantee Determination SGD 2006/2 reflects changes to the superannuation system made by the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No 1) Act 2019. This amended legislation was to ensure that an individual’s salary sacrifice contributions did not reduce an employer’s minimum SG contributions.
The addendum applies from 1.1.2020.
The transfer balance cap began on 1 July 2017. It is a lifetime limit on the total amount of superannuation that can be transferred into retirement phase income streams, including most pensions and annuities.
All retirement phase income streams and retirement phase death benefit income streams you receive count towards your transfer balance cap. The age pension (or other types of government payments) and pensions received from foreign super funds do not count towards your transfer balance cap.
The general transfer balance cap, currently $1.6 million, will be indexed to $1.7 million on 1 July 2021.
Recently the ATO outlined their intention to continue collecting motor vehicle registries data for the additional period of the 2019–20 to 2021–22 financial years.
The motor vehicle registries data-matching program has been developed to assess the overall tax compliance of individuals and businesses involved in buying and selling motor vehicles. The ATO matches the data provided by state and territory motor vehicle registry authorities against ATO taxpayer records, with the intent of identifying those who are not participating in the tax and superannuation system by meeting their registration, reporting, lodgment and payment obligations.
Information will be acquired from state and territory motor vehicle registry authorities where their records indicate:
- A vehicle has been transferred or newly registered during the 2019–20, 2020–21 and 2021–22 financial years, and
- The purchase price or market value is equal to or greater than $10,000. This threshold was determined by review of vehicle prices trends and cost/benefit assessment.
The data acquired will allow compliance checks of luxury car tax, fringe benefits tax and fuel schemes. It will also identify higher risk taxpayers with outstanding lodgments and those with undeclared income whose asset holdings may not be proportionate to their declared financial position.
The motor vehicle registries data-matching program allows the ATO to identify and address tax risks, including:
- Fringe benefit tax compliance activities.
- Providing a holistic view of a taxpayer’s financial position.
- Supporting compliance areas with modelling and case identification.
- Supporting taskforce programs including the black economy.
The objectives of this data-matching program are to:
- Chiefly identify and address non-compliance with tax obligations.
- Obtain intelligence about taxpayers that buy and sell motor vehicles to identify risks and trends of non-compliance with tax and superannuation obligations.
- Identify and address taxpayers buying and selling motor vehicles who may not be meeting their obligations to register and lodge returns (including activity statements) and ensure the correct reporting of income and entitlement to both deductions and input tax credits.
- Use the motor vehicle purchaser’s data as an indicator of risk, along with other data holdings, to identify taxpayers that have purchased vehicles with values that are not corresponding in size, with the income they have reported.
- Identify cases for investigation of taxpayers of interest, such as seller(s), licenced dealers, fleet managers, leasing companies or representatives of these taxpayers to determine if the use of interposed proxy ownership is used to conceal the real accumulation of wealth, therefore representing a material threat to public revenue.
- Identify and deal with those taxpayers who may not have met their obligations primarily with regards to GST, fringe benefits tax, luxury car tax, fuel schemes and income tax.
From our experience, particular attention is given to high and luxury vehicles.
New workplace determinations and enterprise agreements made on or after 1 January 2021 must offer employees the right to choose the super fund to which you pay their compulsory super contributions.
Once a new determination or agreement is in place, your organisation must offer choice of super fund to:
- Existing employees who request to choose their super fund.
- All new employees.
All employees can nominate their chosen fund by completing the standard choice form through ATO online services linked to their myGov account. Alternatively, you can give your employees a Superannuation (super) standard choice form to complete.
You must then pay employees’ compulsory super to their nominated fund.
If an employee doesn’t nominate a fund, you can continue to pay their super to the same fund you previously contributed to, or into your default fund.
On 31.1.2021, the ATO clarified recent media commentary about incorrect JobKeeper payments.
JobKeeper is the largest ever administered program in Australia with payments to date exceeding $80 billion.
It has been supported by a comprehensive and effective compliance program.
Not only does this involve checking the ABN of every business and the tax file number of each and every employee claimed, the ATO also has red-flag checks to stop claims for fictitious employees including deceased, jailed and those overseas, and also fictitious employing businesses. This is over and above the use of Single Touch Payroll and other data sources.
Where claims including fictitious employees are identified, no JobKeeper payments are or have been made.
Contrary to the impression given by some media coverage, the 6,000 red-flagged cases under investigation relate to all attempted claims stopped for investigation prior to payment. There have been very few attempted claims for fictitious employees.
The ATO is not aware of any ultimately successful claim for deceased or other fictitious employees.
The effectiveness of the ATO’s approach to implementing JobKeeper and managing fraud was recently confirmed by the Australian National Audit Office (ANAO). These findings reflect the dedication of the thousands of employees across the ATO involved in delivering the Government’s stimulus package.
ANAO review findings:
- The ATO has been effective in managing risks related to the rapid implementation of COVID-19 economic response measures.
- The ATO undertook appropriate planning to support the rapid implementation of the six economic response measures — predominantly using its existing systems and processes to support governance, resourcing, and consultation.
- The ATO’s risk documentation evidences its priority of implementing the measures in a timely manner, while also managing fraud and other integrity risks on a progressive basis.
Most jobs involve carrying out some type of manual task whether stacking shelves, working on a conveyor line, or entering data into a computer.
When the risks associated with manual tasks are not eliminated or minimised, poorly designed or done incorrectly, the tasks can become hazardous causing significant and even irreversible injuries or disorders.
Musculoskeletal Disorders or MSDs are the most common work-related condition in Australia despite the fact there are known methods to eliminate or minimise them.
Identifying hazardous manual tasks
A hazardous manual task is where you have to lift, lower, push, pull, carry, hold, or restrain something. It can include:
- repetitive movement
- repetitive or sustained force
- high or sudden force
- sustained or awkward postures
- exposure to vibration.
These factors stress the body and can lead to a wide range of Musculoskeletal Disorders or MSDs.
Risk assessment of hazardous manual tasks
You should carry out a risk assessment for any manual tasks that have the potential of being hazardous or you have identified as being hazardous. The only time this may not be necessary is when the risk is well known, and you are already aware of how to effectively control it.
A risk assessment of manual tasks will help you identify:
- Postures, movements, and forces that pose a risk and at what point they may become dangerous.
- Why they are happening and what needs to be done for it to be fixed.
Do not forget to also identify and manage the psychosocial risks related to individual’s social conditions, mental and emotional health that can increase the risk of musculoskeletal disorders.
A well-designed work area, work procedures, ergonomically designed tools and equipment will help eliminate or reduce risk factors associated with hazardous manual tasks.
Failure to appropriately manage hazardous manual tasks may result in a breach of WHS laws.
Designing problems out
The best and most cost-effective way to eliminate or minimise the risk of an MSD is to consider manual task hazards and risks during the design and planning stage of a workplace or a job. During this stage, hazards and risks can be ‘designed out’ before they are introduced into a workplace.
Designers, manufacturers, importers, and suppliers of plant and structures have duties under the model WHS Act to make sure, so far as is reasonably practicable, that products do not pose risks to health and safety when they are used for the purpose they were designed or manufactured for. This includes ensuring they will not result in MSD risks.
The musculoskeletal system supports and protects the body and is made up of the bones of the skeleton, muscles, cartilage, tendons, ligaments, joints, and other connective tissues that supports and binds tissues and organs together.
Musculoskeletal Disorders may include:
- Sprains and strains of muscles, ligaments, and tendons.
- Back injuries including damage to the muscles, tendons, ligaments, spinal discs, nerves, joints, and bones.
- Joint and bone injuries or degeneration, including injuries to the shoulder, elbow, wrist, hip, knee, ankle, hands, and feet.
- Nerve injuries or compression (for example carpal tunnel syndrome).
- Muscular and vascular disorders as a result of hand-arm vibration.
- Soft tissue injuries such as hernias.
- Chronic pain (pain that lasts longer than three months).
- Acute pain (pain that lasts less than three months).
Musculoskeletal Disorders or MSDs can occur:
- Slowly through gradual wear and tear caused by repeated or continuous use of the same body parts, including static body positions.
- Suddenly through strenuous activity or unexpected movements such as when loads being handled move or change position suddenly.
Consumers and small business will have better access to finance following the passage through parliament of the Federal Government’s reforms to the Mandatory Comprehensive Credit Reporting (CCR) Regime.
The strengthened regime will deliver benefits to lenders and borrowers and drive competition in the lending market while preserving and enhancing important security and consumer protections.
Australia’s largest banks will now be required to participate fully in the credit reporting system in order to provide more Australians with better access to credit. With a deeper, richer set of credit data, consumers will be able to demonstrate their credit worthiness and seek a better deal, while lenders will have greater opportunity to compete for customers with positive credit histories.
Consumers experiencing financial difficulty can now better demonstrate their credit worthiness through a more accurate reporting of their circumstances. A new category of credit information will also enable financial hardship information to be reported alongside repayment history. Lenders will only have access to this hardship information in situations where the consumer is seeking to access new credit, or the consumer agrees to the information being provided.
The scheme also offers consumers greater financial transparency and protections, following additional amendments made by the Government. Consumers will be able to access their credit files for free every three months. Credit reporting bodies will also be mandated to share a consumer’s credit score range, and an explanation of the input information that determines the credit score.
On 17.2.2021, the Morrison Government introduced legislation into parliament to ensure the superannuation system works harder for all Australians.
These measures will reduce waste in the system and save Australian workers $17.9 billion over 10 years by holding underperforming funds to account and strengthening protections around the retirement savings of millions of Australians.
Australians currently pay $30 billion per year in superannuation fees, while three million accounts sit in underperforming funds worth over $100 billion in retirement savings.
The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 also addresses key recommendations from the Productivity Commission’s (PC) comprehensive assessment of the system, Superannuation: Assessing Efficiency and Competitiveness.
The Your Future, Your Super package is scheduled to commence on 1 July 2021. Under the package, the superannuation system will be significantly enhanced by:
- Having your superannuation follow you: Preventing the creation of unintended multiple superannuation accounts when employees change jobs.
- Making it easier to choose a better fund: Members will have access to a new interactive online YourSuper comparison tool which will encourage funds to compete harder for members’ savings.
- Holding funds to account for underperformance: To protect members from poor outcomes and encourage funds to lower costs the Government will require superannuation products to meet an annual objective performance test. Those that fail will be required to inform members. Persistently underperforming products will be prevented from taking on new members.
- Increasing transparency and accountability: The Government will increase trustee accountability by strengthening their obligations to ensure trustees only act in the best financial interests of members. The Government will also require superannuation funds to provide better information regarding how they manage and spend members’ money in advance of Annual Members’ Meetings and disclose all of their portfolio holdings to members.
This package builds on the Government’s superannuation reforms which include consolidating $2.9 billion held in unintended multiple accounts on behalf of 1.4 million Australians, capping fees on low balance accounts, banning exit fees and ensuring younger Australians do not pay unnecessary insurance premiums.
On 17.2.2021, the Morrison Government announced it will introduce legislation into Parliament to extend the application of temporary relief measures introduced at the height of the coronavirus crisis relating to virtual AGMs and signing and sending electronic documents.
Specifically, the Treasury Laws Amendment (2021 Measures No. 1) Bill will extend from 21 March 2021 to 15 September 2021 the expiry date of the temporary relief allowing companies to use technology to meet regulatory requirements to hold meetings, such as annual general meetings, distribute meeting-related materials and validly execute documents.
Following 15 September 2021, member meetings will need to be conducted consistent with pre-COVID-19 laws which require an-in person meeting to be held.
The Government will also conduct a 12-month opt-in pilot for companies to hold hybrid annual general meetings to enable a proper assessment of the shareholder benefits of virtual meetings.
The Government will finalise permanent changes to allow electronically signing and sending documents prior to the expiry of these temporary arrangements on 15 September.
Extension of this temporary relief will allow businesses to continue to comply with their regulatory requirements as they continue to deal with and emerge from the COVID-19 pandemic.
In February, a notice of Single Touch Payroll (STP) Data Matching Programme was announced signalling further meshing of STP data sourced through ATO systems and individuals relying on Services Australia. The payroll information is to be matched against the latter’s records, with guidance issued by Services Australia outlining this process.
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.