Car Parking Benefits

James Murphy Tax

Question: Please advise if when using the statutory formula method for calculating FBT payable, if we should be using Type 1 or Type 2. Please provide an extract from the legislation if possible. Answer The difference between a Type 1 fringe benefit and a Type 2 fringe benefit is whether the amount is entitled to a GST credit. Type 1 fringe benefits are a GST …

Termination Pay

James Murphy Tax

Question: A quick question on an employee’s termination pay. A staff member worked full time before their maternity leave. Due to the COVID impact and their young child, changed to a different position and worked reduced hours after their return. However, the new role is no longer available, and the business has decided to pay them their redundancy and in …

Employee Moving to China

James Murphy Tax

Question: One of our employees is moving to China and will still work for us remotely. Is there anything we need to consider for tax purposes under this situation? Do we still need to withhold PAYG tax? Although the employee will be in another country, she will still have her TFN and Australian banking account. Answer In the event the …

Maximum Franking Credit For 2020/21

James Murphy Tax

Question: I know that the small company tax rate will be reduced to 26% from the year 2021/22. So far, the company has franking account balance on 30/06/2020 as below: Total profit $190,000    Tax (27.5%): $52250 all paid. If the company wants to distribute $100,000 profit to its shareholders(two), In this case, it is my understanding that the franking credit …

Entitled School Holidays and (LWP)

James Murphy Tax

Question: Two employees have been doing extra days/hours for the entire term 1. Regarding the 2 weeks holidays approaching (in which we do not work) are they entitled to be paid for the hours they have worked during term 1 or do they go back to their normal hours? Also, we have an employee that has been absent (LWP) from …

Deferred Commercial Losses & Capital Gains

James Murphy Tax

Question: We have a new client they are a small family partnership. The previous accountant has deferred all the losses from the business activity. I believe this may have built up to approximately $200,000, for both partners. I suspect this was to enable the client to receive the Age Pension. Apart from a small holding of shares and age pension …

Withholding Clearance – House Sold Over $750k

James Murphy Tax

Question: Withholding Clearance – House Sold Over $750k Query please – client sold a house and was one day late with the certificate of clearance, so  $50K was withheld. Spoke to the ATO and they said I cannot lodge a 2021 tax return  now (by paper) to recoup the funds – the client needs the money now, not in say …

CG Distribution

James Murphy Tax

Question My query relates to Capital Gains distribution in a family trust. Have 3 beneficiaries who are presently entitled and could receive a distribution of CG in the 20/21 year. A – earns $3000 in the year. B – earns $50,000. C – is a foreign resident for tax purposes (no earnings here). Could you please show what would be …

Employee – Not Called or Reported to Work

James Murphy Tax

Question We require clarification on an issue we are experiencing with an employee. The individual has not called or reported to work yesterday or today. Their usual workdays are Tuesday, Wednesday & Thursday. Can you advise how long it must be before they have “abandoned” their place of employment? Can you advise if we still must pay them for a …

2021-22 Federal Budget Update

James Murphy Tax

2021-22 FEDERAL BUDGET TAX OVERVIEW Introduction… The 2021-22 Budget outlines the Morrison Government’s plan for recovery from the impacts of the COVID-19 pandemic focused on growing the economy and creating jobs for Australians. On 11 May 2021, Treasurer Josh Frydenberg handed down his second “pandemic budget” amidst a backdrop of continuing uncertainty. Acknowledging that the virus is a continuing threat …