Marshall Michael Chartered Accountants in Perth, Western Australia | Accountant

Marshall Michael Chartered Accountants

Locality: Perth, Western Australia

Phone: +61 8 9322 6600

Address: Level 1, 115 Cambridge Street, WEST LEEDERVILLE 6007 Perth, WA, Australia

Website: http://www.marmic.com.au/

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27.01.2022 HIRING EMPLOYEES checklist Hiring staff for your business? Here are tips to help you meet Australian laws when hiring and to help you through the process.... 1 Decide on the type of employee Assess your business - think about the tasks you need the employee to do, skills and how long you will need them. Decide on employment type - full or part time, fixed, casual employee or a trainee? Know the difference between an employee and contractor. 2 Assess employment impacts Consider the cost of recruiting, wages, allowances, overtime, tax, superannuation, insurances and changes to your workplace to make it safe. Find out the pay conditions for the classification of employees, breaks required, leave entitlements etc. You will be responsible for managing them so understand impacts on your workplace including training. Know your tax and super obligations. 3 Recruit an employee Prepare a job description, advertise it, evaluate candidates (without discrimination - it’s unlawful!) and make an offer. Check if they can legally work in Australia. Check licences/qualifications or consider training. 4 Prepare for your new employee Provide induction and information of entitlements. Agree on hours of work and notice periods. Prepare for tax and super payments - register for PAYG withholding, ask the employee to complete a TFN declaration and pay the super guarantee. Provide your employee with information on work health and safety obligations. 5 Pay your employee correctly Find the minimum wages needed. Collect (PAYG) tax from employee payments. Pay monthly or more often and provide payslips. Keep up to date with pay rates and if you need to pay payroll tax. 6 Pay superannuation and tax Pay super quarterly and report electronically. Pay FBT if required. 7 Keep required records Employee records for 7 years and tax and super records for 5 years. 8 Report payments, tax and super 9 Know the rules around ending employment Know the rules about employing someone but also when ending employment. Would you like to know more? Get in touch

25.01.2022 Happy Friday! In a break from our traditional pie and birthday cake , these lovely cheeseboards (prepared by our own Steph and Miranda ) helped wish our founder, Stephen Marshall a very happy and cheesy birthday.

24.01.2022 COVID-19 AND SMSF RENTAL RELIEF CONTINUED NON ARM'S LENGTH TENANTS Where the property is held by the SMSF and the tenant is a related party of the SMSF trustee, unless care is taken, evidence gathered, and the arrangement is properly documented, there is a real risk that, in granting rental relief, breaches of the following provisions of the SIS Act may result. ...Continue reading

23.01.2022 DEDUCTIONS FOR VACANT LAND NO LONGER AVAILABLE For the 2020 year, expenses for holding vacant land are no longer deductible for individuals intending to build a rental property on that land where the dwelling is not yet built. This also applies to land for which you may have been claiming expenses in previous years. However, this does not apply to land that is used in a business, or if there has been an exceptional circumstance like a fire or floodleading to the land being vacant. This can be a difficult area in regard to taxation, so further advice may be an option to consider. Let us know if we can help!

22.01.2022 MORE ON MANAGING YOUR SUPERANNUATION ACCOUNT Generally, a credit arises in your transfer balance account when you become the recipient of a superannuation income stream that is in retirement phase. The following events will cause a credit to your transfer balance account: superannuation income streams that were in existence just before 1 July 2017 and you continue to receive them after that date including both reversionary and non-reversionary death benefit income strea...Continue reading

21.01.2022 BUDGET 21/22: KEY NOTES FOR BUSINESS ___ Temporary full expensing: extended to 30 June 2023... The Government will extend the temporary full expensing measure until 30 June 2023 . It was otherwise due to finish on 30 June 2022. The measure allows eligible businesses to deduct the full cost of eligible depreciating assets, as well as the full amount of the second element of cost. A business qualifies for temporary full expensing if it is a small business (annual aggregated turnover under $10 million) or has an annual aggregated turnover under $5 billion. Assets must be acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023. Loss carry-back extended by one year Under the temporary, COVID driven, restoration of the loss carry back provisions announced in the 2020- 21 Budget, an eligible company (aggregated annual turnover of up to $5 billion) could carry back a tax loss for the 2019-20, 2020-21 or 2021-22 income years to offset tax paid in the 2018-19 or later income years . The Government will extend the eligible tax loss years to include the 2022-23 income year. Intangible assets depreciation: option to self-assess effective life The Budget confirmed that the income tax law will be amended to allow taxpayers to self-assess the effective life of certain intangible assets (such as intellectual property and in-house software), rather than being required to use the effective life currently prescribed . This amendment will apply to patents, registered designs, copyrights and in-house software for tax purposes. Extended consultation on corporate tax residency rules In the 2020-21 Budget, the Government announced that it would amend the law to provide that a company that is incorporated offshore will be treated as an Australian tax resident if it has a significant economic connection to Australia . This test will be satisfied where both the company’s core commercial activities are undertaken in Australia and its central management and control is in Australia. Small business to be able to pause disputed ATO debt recovery The Government will introduce legislation to allow small businesses to pause or modify ATO debt recovery action where the debt is being disputed in the AAT. Small business entities (including individuals carrying on a business) with an aggregated turnover of less than $10 million per year will be eligible to use the option. Would you like to know more? Get in touch

21.01.2022 COVID-19 and trust liquidity issues The ATO has highlighted the fact that due to COVID-19, a trustee may experience liquidity issues that may affect a trust’s ability to satisfy a beneficiary’s entitlement. This may happen where financial institutions impose restrictions that affect the way a trustee can deal with its assets. The ATO states that where a present entitlement arose before any effect of COVID-19, in circumstances that were not a reimbursement agreem...ent, trustees may need to make subsequent arrangements to meet the requirements of the financial institution. If that occurs, these arrangements will not invalidate that entitlement nor trigger other taxation impediments. For present entitlements conferred at the end of the last tax year, the law will apply based on the facts presented, it says. We won’t undertake compliance action to consider the validity of an entitlement in circumstances where a trustee is affected by liquidity issues due to COVID-19 and unable to satisfy the entitlement. The ATO also reminds trustees of the importance of complying with the terms of their trust deeds. It says that for cases under review, it will continue to apply the law. Further, the ATO says that its compliance approach is intended to provide relief and certainty to trustees and associated private groups who experience genuine liquidity difficulties as a result of COVID-19, and assures affected parties that it will monitor behaviour to ensure this approach works as intended. See more

20.01.2022 SMEs: ATO confirms JobKeeper payments do not contribute to aggregated turnover From the outset, it has been emphasised that JobKeeper payments are assessable income. However some concerns had been raised as to JobKeeper payment status in regard to being statutory income or ordinary income. And if the latter, whether it is ordinary income derived in the ordinary course of carrying on a business. If so, JobKeeper payments would be included in aggregated turnover, which det...ermines whether an entity qualifies for a range of concessions and other certain measures, which can include accessing the small business income tax concessions, small business CGT concessions, the instant asset write-off, the refundable R&D tax offset, and the base rate entity tax rate. But now the ATO has confirmed that although JobKeeper payments are ordinary income, they are not derived in the ordinary course of business, and therefore not included in aggregated turnover.

19.01.2022 COVID-19 IMPACT ON INSURANCE COVER As part of its economic response package to the COVID-19 pandemic, the government implemented a new temporary measure to allow individuals affected by COVID-19 to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21 (further extending the deadline to apply for this last option see below). Given the recent changes to insurance arrangements for members of large APRA-regulated fu...nds (as outlined earlier), the new early release measures could see some of those members losing their income protection and life and total permanent disability insurance cover if they fully withdraw or end up with a super balance that drops below $6,000. Many people are also at risk of having their insurance automatically cancelled if their large APRA-regulated fund account(s) is considered inactive because they are unable to contribute for a continuous period of 16 months as a result of financial stress due to the coronavirus pandemic. While the latest changes to insurance arrangements do not apply to SMSFs, withdrawing super early may also affect SMSF members who have a secondary APRAregulated fund that provides them with insurance cover. They are, therefore, also at risk of losing their insurance cover in those funds if their APRA-regulated fund account(s) has a balance below $6,000 or is considered inactive due to no contributions for a continuous period of 16 months. It is, unfortunately, expected that the new law changes would likely leave hundreds of thousands of people facing the COVID-19 crisis without life, disability or income protection at a time they may need insurance more than ever Given insurance cover inside superannuation is a secure way of protecting fund members against the financial strain that serious illness, injury or death can cause, it is critical for people who intend accessing their super early to consider the impact on their insurance and be aware of the implications before withdrawing.

19.01.2022 THE JOBKEEPER PAYMENT RATE From 28 September 2020 to 3 January 2021, the JobKeeper payment rates will be: $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and... $750 per fortnight for other eligible employees and business participants. From 4 January 2021 to 28 March 2021, the JobKeeper rates will be: $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and $650 per fortnight for other eligible employees and business participants. See more

18.01.2022 New data matching programs initiated by the Federal Government Continued The second data matching program involves comparing information held by the ATO in relation to Single Touch Payroll (STP) and Services Australia’s databases. The aim this time is to enable: comparison of pre-filling employer details (as reported through STP) onto Services Australia online services for review by customers, ... the supporting of timely confirmation of employment and establishment of child support employer withholdings (where appropriate), the identifying where there is a significant difference between STP income and the estimate the customer has provided to Services Australia, and nudging the customer to suggest that they revisit their income estimate, the supporting of existing debt recovery processes, including the contacting of customers with whom contact has been lost, analysis of the data with a view to improving Service Australia’s processes. Again a protocol document describing the program was provided, which states that the data matching program will exchange personal information and employer/ employee relationship and payroll data between Services Australia and the ATO where there is a mutual relationship for the individual. It says part of the objectives of the exercise is to: 1 support customers by prompting them to update their income estimates to assist them to receive the right rate of payment at the right time 2 reduce employer burden by minimising the contact that employers must have with Services Australia to provide payroll information for activities like: - establishing child support employer withholding and - existing debt recovery processes 3 assist Services Australia with discussion with noncurrent customers to determine their capacity to repay a debt. ATO advice, if anyone thinks they’ve made a mistake or left something out, is to contact either the ATO or their registered tax adviser to correct the mistake or to amend any previously supplied data. You can also make a voluntary disclosure we may reduce or even waive penalties if you make a disclosure before we contact you, the ATO says.

17.01.2022 LEST WE FORGET Our respect for Anzac Day and what it means for us, is as large as our appreciation. We will be closed on Monday 26 April 2021 (Anzac Day public holiday) and will be back in the office Tuesday 27 April 2021.

17.01.2022 JOBKEEPER UPDATES CONT. - EMPLOYEES Only one employer can claim the JobKeeper payment in respect of an employee. The selfemployed will be eligible to receive JobKeeper where they meet the relevant turnover test, and are not a permanent employee of another employer. But the eligibility rules for employees remain unchanged. ... This means you are eligible if you: are currently employed by an eligible employer (including if you were stood down or re-hired) were for the eligible employer (or another entity in their wholly-owned group) either: a full-time, part-time or fixed-term employee at 1 July 2020; or a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer. were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify for fortnights before 11 May 2020, and continue to qualify after that if you are independent or not undertaking full time study). were either: an Australian resident for social security purposes; or an Australian resident for taxation purposes. were not in receipt of any of these payments during the JobKeeper fortnight: government parental leave or Dad and partner pay; or a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work. Employees will continue to receive the JobKeeper payment through their employer during the period of the extension if they and their employer are eligible and their employer is claiming JobKeeper but remember the rates are to change as set out above. Note that as there has been no change to the Australian residency requirements for eligible employees, international students and temporary visa holders will continue to not be eligible for the JobKeeper subsidy. However in better news, currently a person whose wages are being subsidised by JobKeeper payments cannot also obtain JobSeeker support. This is because the JobKeeper subsidy is taken into account when assessing the eligibility of an individual for JobSeeker payments. Under the new arrangements it may be possible for such individuals to also claim JobSeeker payments. An individual can earn just over $1,200 per fortnight and still receive the full coronavirus supplement of $250 under the new arrangements. See more

16.01.2022 EARLY RELEASE OF SUPER EXTENDED For individuals affected by the adverse economic effects of COVID-19, the government has temporarily allowed eligible individuals to access their superannuation early and tax-free. The government is extending the application period for the measure from 24 September 2020 to 31 December 2020 to increase the scope for individuals who may still be financially impacted by COVID-19 to access early release in the coming months. ... Eligible Australian and New Zealand citizens and permanent residents were able to access up to $10,000 of their superannuation before 1 July 2020. They can access a further $10,000 until 31 December 2020. See more

16.01.2022 Investment property ownership: ATO data Did you know... Around 71.16% of individual taxpayers who own an investment property limit their holding to one property.... Around 18.96% of property investors hold 2 properties. LARGER HOLDINGS 3 properties: 5.87% 4 properties: 2.14% 5 properties: 0.89% 6 properties: 0.94%

16.01.2022 COMPANY BENEFICIARIES A key plank of the JobKeeper payment is that a minimum of $1,500 per fortnight amount must be paid to employees (which is then reimbursed to the employer at month-end). However, where the recipient of an amount is an eligible business participant, there is no requirement for the amount to be paid to that individual. Instead, it can be retained in the company or trust as the case may be. Where a trust does retain the amount, it will then form p...art of the trust law income to be distributed by the trust to any beneficiary at year-end (see earlier). Where a trust receives JobKeeper payments and distributes these amounts to a company beneficiary, this can have consequences as to whether that beneficiary then qualifies as a base rate entity for the purposes of qualifying for the lower company tax rate. To recap, to qualify as a base rate entity, a company must not only have an aggregated turnover of less than 50 million, but no more than 80% of its assessable income can be base rate entity passive income. This income consists of the following: (a) corporate distributions and franking credits on these distributions (b) royalties and rent (c) interest income (though some exceptions apply) (d) gains on qualifying shares (e) net capital gains, and (f) an amount included in the assessable income of a partner in a partnership or beneficiary of a trust, to the extent that it is traceable (directly or indirectly) to an amount that is base rate entity income under categories (a) to (e). Trust distributions received by corporate beneficiaries need to be dissected into their base rate entity component, and their non-base rate entity component. In this case of cash flow boost, it would not count as assessable income in any case and therefore would be disregarded for the purposes of the 80% test. On the other hand, JobKeeper is assessable income, but not passive income for the purposes of the 80% test. Therefore, the JobKeeper component of trust distributions to a company will improve the chances of the company meeting the 80% test (because it will be assessable income, and not base rate entity passive income). It will therefore qualify the company as a base rate entity for the purposes of accessing the lower 27.5% corporate tax rate (decreasing to 26% from 2020-21). See more

16.01.2022 COVID-19 AND SMSF RENTAL RELIEF The Federal Government announced a 6 month moratorium on evictions of commercial and residential tenants during the COVID-19 health pandemic. This moratorium (and its accompanying code of conduct leasing principles) will inevitably affect SMSFs, which are reasonably heavily invested in real property, according to statistics. Leasing principles ... A moratorium on evictions means that SMSF landlords face the real prospect of tenants falling behind on their rent. However, this does not mean that the tenant is not required to pay rent during the moratorium period. Rather, broadly speaking, parties are encouraged and indeed required to negotiate a rental reduction , deferrals, or rent-free periods if the tenant needs. In terms of commercial rents, a mandatory code has been developed and applies if a tenant or landlord is eligible for JobKeeper payments and has a turnover of less than $50 million. The code includes a common set of principles that must be adhered to, including: landlords must not terminate leases for nonpayment of rent during the COVID-19 pandemic (or reasonable recovery period) tenants must stay committed to their lease terms (subject to amendments) landlords must offer reductions in rent (as waivers or deferrals) based on the tenant’s reduction in trade during COVID-19 benefits that owners receive for their properties (e.g. reduced charges, land tax, deferred loan payments from banks) should be passed on to the tenant proportionately. However, granting rental relief where not carefully justified and documented can present considerable compliance risks for SMSF landlords. This includes fines of up to 12,600 per trustee and/or in serious instances the SMSF being deemed non-complying, in which case the value of its assets as at the commencement of the income year could be taxed at 45%. See more

15.01.2022 New data matching programs initiated by the Federal Government Over the first quarter of this financial year, the government has initiated 2 new data matching programs, using data that the ATO holds. Data matching involves bringing together data from different sources and comparing it. For example, records from different agencies or businesses are compared, with the results possibly identifying people who are being paid benefits to which they may not be entitled,... or people who may not be paying the right amount of tax. For the ATO’s part, it can collect data from financial institutions or other agencies and match this with its own information, which is sourced from income tax returns, activity statements and other tax records. In the past, data matching activities have focused on, for example: the total credit and debit card payments received by businesses information on sellers using online selling platforms details of payments made to ride-sourcing drivers from accounts held by the ride-sourcing facilitator. The ATO then matches this data with information held in its databases to identify any discrepancies. This time however, the focus is to be on data held by Services Australia (the government body that became the executive agency in February this year in the Social Services portfolio responsible for health, social and welfare payments and services known by most as Centrelink). Of the two new programs, one will be looking specifically at comparing information held by the ATO in relation to the JobKeeper payment and information reported to Services Australia’s customers in relation to social security payments. The aim, as described in the notice announcing the program, is to uncover people who may be registered for both the JobKeeper program and social security payments, and identify social security customers who may need extra support to correctly declare their income, to help prevent them getting an overpayment. A protocol document describing the program was developed in consultation with the Office of the Australian Information Commissioner, where it is stated: This program involves the agency receiving a data file from the ATO which will contain a list of all employees who have been nominated for JobKeeper payment by an eligible employer. The agency will then undertake a matching process of this data against the agency’s social security payment customers and claimants. It says the matching process compares the following fields of data of each payee: tax file number family name given name additional name (other name) date of birth. More on the second data matching program next post! See more

14.01.2022 LEST WE FORGET At the 11th hour, on the 11th day of the 11th month we will remember them. #lestweforget #remembranceday

13.01.2022 Develop an emergency management plan You probably won't get much warning before an emergency. A good emergency management plan prepares you and your business for unexpected disruptions to help protect your business before, during and after an emergency.... Why you need an emergency management plan. In Australia, natural disasters such as floods, fire and even earthquakes can strike without warning. During an emergency, your main aim is to ensure your business continues operating. By carefully researching and planning before an emergency happens, you’ll be ready to act quickly and effectively. An emergency management plan helps you before, during and after an emergency: The continuity plan helps you prepare your business for an emergency by identifying risks to critical areas and how to best protect them. The emergency action plan helps you and your staff know what to do during an emergency situation. The recovery plan guides your business’s recovery after an emergency. After you‘ve completed your continuity, action and recovery plans, support it with: detailed emergency procedures evacuation maps insurance information. Regularly review your emergency management and recovery plan. It's also important to update your plan each time your staff change, or if you move to a new business location. Practice your emergency action plan with your staff. You may find there are things missing or steps you need to change. This is your opportunity to make sure your emergency procedures are as efficient as possible. Would you like to know more? Get in touch

12.01.2022 COVID-19 payments and some issues for companies and trusts cont... TRUST DISTRIBUTIONS What constitutes trust income is determined by the trust deed or by the trustee where permitted under the trust deed. ... It is a common misconception that the trust income available for distribution is equal to the taxable income of the trust. However, this will only be the case where the trust deed defines trust income to equal taxable income, or the trustee, where discretion permits, determines that to be the case. CASH FLOW BOOST When considering payments received under the cash flow boost, if the trust deed or the trustee determine that non-assessable nonexempt income does not form part of trust income, the cash flow boost will not be distributable. However, where such overt restrictions are not present, or where the trust deed or the trustee determine that non-assessable nonexempt income can be distributed, the cash flow boost may be available for distribution to the beneficiaries. JOBKEEPER JobKeeper payments will form part of the taxable income of the trust and would be expected to also be trust income as may be defined by the trust deed or the trustee. Where JobKeeper is received for eligible employees, the amount paid to the employees, and therefore the associated expense/deduction must be equal to or more than the amount of JobKeeper payment. Therefore, no net trust or taxable income would arise. However, JobKeeper amounts received for eligible business participants do not need to be paid to the eligible business participant, as the wage condition does not apply. Therefore, the amounts could be retained within the trust and form part of the trust income distributed at year end. FRANKING CREDITS As the cash flow boost amounts are non-assessable non-exempt income, no tax arises on these amounts and it follows that no franking credits will be generated by these amounts. Whether the boost amounts can be paid out as a franked dividend by the recipient company will depend on the balance in the franking account of the company involved and the amount of its accumulated profits. See more

11.01.2022 GENERAL COMMON RENTAL PROPERTY MIS-STEPS Capital works and repairs Repairs or maintenance to restore something that’s broken, damaged or deteriorating in a property you already rent out are deductible immediately. Improvements or renovations are categorised as capital works and are deductible over a number of years. Initial repairs for damage that existed when the property was purchased can’t be claimed as an immediate deduction but may be claimed over a number of ...years as a capital works deduction. Incorrectly claiming loan interest Taxpayers that take out a loan to purchase a rental property can claim interest (or a portion of the interest) as a tax deduction. However directing some of the borrowed funds to personal use, such as paying for living expenses or going on a holiday, is not deductible use. The ATO uses data and analytics to look closely and ensure that deductions are only claimed on the portion of the loan that relates directly to the rental property. Travel to rental properties Residential property owners can’t claim any deductions for costs incurred in travelling to residential rental property unless they are in the rare situation of being in the business of letting rental properties. See more

11.01.2022 BUDGET 21/22: KEY HOUSING MEASURES ___ First Home Super Scheme to be extended for withdrawals up to $50,000 The Budget confirmed that the maximum amount of voluntary superannuation contributions that can be released under the First Home Super Saver (FHSS) scheme will be increased from $30,000 to $50,000 .... Voluntary contributions made from 1 July 2017 up to the existing limit of $15,000 per year will count towards the total amount able to be released (which includes voluntary concessional and non-concessional contributions). Currently, the FHSS scheme allows for future voluntary contributions up to $15,000 per year (and $30,000 in total) to be withdrawn for a first home purchase. To be eligible, a person must be 18 years or over, have not used the FHSS scheme before and have never owned real property in Australia. Withdrawals of eligible FHSS contributions (and associated earnings) are taxed at the individual’s marginal rate less a 30% tax offset. Effectively, the scheme provides a 15% tax saving on money channelled via super for a first home purchase . Home Guarantees for single parents and new homes Other first home buyer measures, announced as part of the Budget, include: New Home Guarantee - to be expanded for a second year, providing an additional 10,000 places in 2021-22. First home buyers seeking to build a new home or purchase a newly built home will be able to do so with a deposit of as little as 5%; and Family Home Guarantee for single parents - to be established with 10,000 guarantees made available over 4 years to single parents with dependants. The Family Home Guarantee allows them to purchase a home sooner with a deposit of as little as 2%. Would you like to know more? Get in touch.

10.01.2022 SHORT-TERM RENTALS In circumstances where COVID-19 has adversely affected demand, including the cancellation of existing bookings for a short-term rental property, deductions are still available provided the property was still genuinely available for rent. If owners decide to use the property for private purposes, or offer the property to family or friends for free, offered it to others in need or stopped renting the property out, the ability to claim deduction...s is lost for those respective periods. To determine the proportion of expenses that can be claimed for short-term rental properties affected by COVID-19, or indeed bushfires and other natural disasters, a reasonable approach is to apportion expenses based on the previous year’s usage pattern. That is unless an owner can show it was genuinely available for rent for the relevant period. See more

09.01.2022 Happy Monday! We hope everyone is enjoying the long weekend in Perth. We are back in the office tomorrow. @anton.wilk

09.01.2022 COVID-19 payments and some issues for companies and trusts With many having received cash flow boost and JobKeeper payments, there can arise some unique issues where these amounts are received within a trust or company. The cash flow boost and JobKeeper payment have been flowing to eligible businesses for some time now. These stimulus payments have differing tax treatments, which are: ... the cash flow boost is paid as a credit and is nonassessable non-exempt income, and also free from GST (because it does not represent consideration for a supply) the JobKeeper payment is paid directly into a recipient’s nominated bank account on completion of monthly reporting obligations. JobKeeper is assessable income, not subject to GST, and not included in activity statements.

09.01.2022 JOBKEEPER - ADDITIONAL TURNOVER TESTS In order to be eligible for the first JobKeeper extension period of 28 September 2020 to 3 January 2021, businesses will need to demonstrate that their actual GST turnover has significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019). Very important to note is that because the... September turnover must be based on actual GST supplies, the accounting for relevant businesses will need to be kept up-to-date. In order to be eligible for the second JobKeeper extension period of 4 January 2021 to 28 March 2021, businesses will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019). The ATO will have discretion to set alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019. We may be able to provide assistance should your circumstances require such application. Businesses will generally be able to assess eligibility based on details reported in your BAS, with the ATO stating when it announced the JobKeeper extension that alternative arrangements will be put in place for businesses not required to lodge a BAS (for example, if a member of a GST group). As the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO). Again, the ATO will have discretion to extend the time to pay employees in order to meet the wage condition, so that businesses have time to first confirm their eligibility for JobKeeper. And just to be clear, in case there is any doubt, if a business fails a decline in turnover test in respect of the June, September and December 2020 quarters, this does not mean that a business that has been claiming the JobKeeper subsidy needs to repay any of the money that has been paid to it. See more

09.01.2022 EOFY tips for your tax plan The financial year is almost over , but there are still effective strategies you may be able to put in place. The aim is to make sure you pay no more tax than you have to for the 2020-21 year and maximise any refunds you may be entitled to . This is still the case, if not more so, in the on-going COVID-19 environment .... While the best strategies are adopted as early as possible in a financial year and not at the end, it’s worth remembering proper tax planning is more than just sourcing bigger and better deductions. The best tips involve assessing your current circumstances and planning your associated income and deductions from income year to income year. Not all of the following tips will suit everyone’s specific circumstances, but they should provide a list of possibilities that may get you thinking along the right track for your tax planning . Temporary full expensing The temporary full expensing regime is now operable for depreciating assets acquired after 6 October 2020 and before 30 June 2022. The full cost of acquiring depreciating assets is deductible in the year of income in which the asset is first held, provided the item is first used, or installed ready for use, by 30 June 2022. The cost of improvements made to a depreciating asset is also deductible in the year of income the improvements are made (no later than 30 June 2022). In contrast to the instant asset write-off rules, there is no upper limit on the amount that can be fully deducted in respect of any asset. This may enable some effective tax planning between the 2021 and 2022 tax years where there are assets you have been looking to acquire or improve. Use the CGT rules to your advantage If you have made and crystallised any capital gain from your investments this financial year (which will be added to your assessable income), think about selling any investments on which you have made a loss before 30 June. Doing so means the gains you made on your successful investments can be offset against the losses from the less successful ones, reducing your overall taxable income. And while there may be many opportunities to realise capital losses in the current circumstances, you should be aware that the deliberate realisation of capital losses for the purpose of reducing capital gains in some circumstances may trigger a response from the ATO. Keep in mind that for CGT purposes a capital gain generally occurs on the date you sign a contract, not when you settle on a property purchase or share transaction. When you are making a large capital gain toward the end of an income year, knowing which financial year the gain will be attributed to can be a handy tax planning advantage. Of course, tread carefully and don’t let mere tax drive your investment decisions but check to determine whether this strategy will suit your circumstances, and whether you risk attracting the attention of the ATO in any way.

08.01.2022 BUSINESS CAN CLAIM PREVIOUS YEAR TAX LOSSES If your business has made tax losses in years to the current one, but you haven’t yet offset all those losses, you can still carry these forward and claim a deduction for them in a later year as long as you meet all the requirements of the tax law. Your business structure will affect how you can claim business tax losses from the current year or previous years. ... If you are: a sole trader or an individual partner in a partnership, you can generally offset your current or prior year business losses against other income in the same income year (subject to the noncommercial business loss rules that may prevent you from doing so); operating your business through a trust, losses must be carried forward by the trust indefinitely until they are offset against future trust income (they cannot be distributed to beneficiaries) and, furthermore, there are strict requirements that must be met for the trust to be able to use the losses itself; operating through a company, you must meet fairly onerous continuity of ownership tests or the same business test in order to be able to claim current and/or prior year losses. It is important to be awarethat the ATO expects taxpayers to consider each tax loss separately if you are looking at more than one tax loss across multiple years. If you carry forward a prior year business loss to the current year or a future year, make sure you have correctly applied your past business losses before lodging a tax return. Check that: you have accurately reconciled carried forward losses from a prior year to a later year (errors can occur when poor record keeping of losses accumulate) you haven’t mis-characterised expenses such as capital expenditure and CGT losses as normal business expenses (because, for example, CGT losses can only be offset against CGT gains) if your business is a specific entity, such as a private company, that you have considered the relevant tests linked to same or similar business tests when applying prior year losses to a current year, where the business ownership or the nature of the business activity has sufficiently changed (as indicated above). Remember, we are here to help if you have any questions about claiming business losses. See more

06.01.2022 VEHICLES & THE BOOSTED INSTANT ASSET WRITE OFF The extension of the instant asset write-off from $30,000 to $150,000 until 31 December 2020, as part of the Federal Government’s COVID-19 stimulus measures, provides an opportunity to look at its application to motor vehicles. Note that in addition to the higher write off amount, the business turnover threshold test for eligibility was increased to also apply (from March 2020 until 31 December 2020) to businesses wit...Continue reading

06.01.2022 JOBKEEPER AMENDMENTS There have been some changes made to JobKeeper. Businesses will need to meet one of the decline in turnover tests for the September 2020 quarter alone (rather than for both the June and September quarters as announced in July) to be eligible for JobKeeper for the period 28 September 2020 to 3 January 2021. Beyond that, businesses will have to meet the decline in turnover tests for the December 2020 quarter to be eligible for JobKeeper for the... period 4 January to 28 March 2021. For the eligible employee test, the reference date for assessing which employees are eligible for JobKeeper is now 1 July 2020 (previously 1 March) with effect from fortnight 10 (3 August 2020). The reference period for employees regarding their hours worked to determine their tier of payment will be the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020. The ATO had already extended the wage condition deadline to 31 August for fortnights 10 and 11. See more

06.01.2022 Independent audit review for small businesses From 1 April 2021, the ATO’s independent review service has been made permanently available for eligible small businesses with a turnover less than $10 million . The service provides an additional option to achieve early and fair resolution of an audit dispute . The service was locked in after a successful pilot period and consultation with the business community. Disputes covered by this service include: income tax... GST excise luxury car tax wine equalisation tax fuel tax credits. All independent reviews are conducted by an ATO officer who has not had any prior involvement in the audit. Requesting a review does not affect objection rights. Eligible small businesses who have an audit in progress will be offered the opportunity to request an independent review. Would you like to know more? Get in touch

05.01.2022 JobKeeper rules, conditions and payment rates continued Businesses will need to retest their eligibility with reference to their actual turnover in the December quarter 2020 to be eligible for JobKeeper fortnights 21 to 26 (4 January 2021 to 28 March 2021). As with the first version of JobKeeper, the ATO will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnove...r in a quarter in 2020 with actual turnover in a quarter in 2019. The wage condition, based on the tier into which the eligible employee or business participant falls will continue to be required. For JobKeeper fortnights 14 and 15, the ATO has extended until 31 October 2020 the time a business has to pay employees in order to meet the wage condition, so that they have time to first confirm their eligibility for the JobKeeper payment. And note that businesses that did not previously join the original JobKeeper scheme can join the new version of JobKeeper if they meet the eligibility criteria. The new JobKeeper is a two-tiered payment arrangement based on average hours worked, on an employee-by-employee basis, in the 4 weeks of pay periods before either 1 March 2020 or 1 July 2020. The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility. Payments for eligible business participants will be based on the same two-tiered payment arrangement, however the hours of active engagement to determine the payment rate will be based on the month of February 2020 only. Businesses will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants). Employers must notify eligible employees of the payment to which they are eligible within 7 days of notifying the ATO. The ATO will have discretion to set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference periods. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020. Other eligibility criteria for employees and eligible business participants will be consistent with the first version of the JobKeeper rules, bearing in mind the 1 July 2020 amendments (about eligible employees). See more

05.01.2022 RENTAL PROPERTY: TAX APPROACH ADJUSTS FOR COVID-19 The COVID-19 pandemic has placed property owners, and tenants in many cases, in unfamiliar territory. Many tenants have been paying reduced rent or ceased paying because their income has been adversely affected. While rental income may be reduced, owners will continue to incur normal expenses on their rental property and will still be able to claim these expenses in their tax return as long as the reduced re...nt charged is determined at arms’ length, having regard to the current market conditions. This applies whether the reduction in rent was initiated by the tenants or the owner. Also remember that many banks have moved to defer loan repayments for stressed mortgagees. In these circumstances, rental property owners are still able to claim interest being charged on the loan as a deduction, even if the bank defers the repayments. See more

05.01.2022 Has your super fund got you covered for insurance With COVID-19, maybe not. From 1 July 2019, the government adopted new rules that aim to prevent the unnecessary erosion of people’s retirement savings through inappropriate insurance arrangements. As part of the rules, super providers, excluding SMSFs and small APRA funds, are unable to provide insurance by default when an account has been inactive for more than 16 months. ... Generally, a member holds an inactive super account if the account has not received any contributions or rollovers for 16 months or longer. From 1 April 2020, additional rules were introduced to stop super providers automatically providing insurance cover on an opt-out basis to members where: a new member is aged less than 25 years old the member holds an account with a balance below $6,000 However, the dangerous occupation exemption recognises that certain occupations carry a higher degree of risk, such as (but not limited to) emergency service workers. This exemption allows trustees to continue to provide insurance on an opt-out basis where: the member is employed in a dangerous occupation it is reasonable to expect that the contributions paid into the product will be for the member’s employment in that occupation, and the fund trustee has notified APRA in writing that the exception will apply to the product and the election is in force. Prior to those changes coming into effect, most super funds (other than SMSFs and small APRA funds) automatically provided life and TPD insurance cover to members upon joining the fund. Some of those funds also automatically offered income protection insurance as default insurance and required a member to opt out of it if the member didn’t deem it necessary for them. Under the new rules, if a member with an inactive low balance super account (below $6,000) in a large APRA regulated super fund wants to keep their insurance, they will need to tell their super fund (that is, ask for the insurance to be provided) or contribute to that super account. If no action is taken, their insurance will be cancelled automatically, and the member’s super account will be transferred to the ATO to protect their account from fee erosion. Also, insurance cover will not be provided by a large APRA regulated super fund for a new member aged under 25 unless they: write to their fund to request insurance through their super work in a dangerous job and the trustee determines that the dangerous occupation exemption applies. The new member can, however, choose to cancel this cover if they do not want it. See more

01.01.2022 SHORT TERM RENTAL PROPERTY MIS-STEPS The ATO reports that it often finds taxpayers with short term rental properties claiming for % of their expenses when they actually use the property for their own use or provide it to family and friends for free or at a reduced rate. Properties need to be rented out or be genuinely available for full rent to claim a deduction. Factors such as reserving the property or leaving it vacant over peak periods, not charging the ma...rket rate and the types of terms and conditions of the bookings are all taken into consideration when deciding if active and genuine efforts are being made to ensure a property is available for rent. If a property is not genuinely available for rent, the ATO expects that deductions will be limited to the days when it is. If you are allowing friends or family to stay in the property at a reduced price, you need to limit your deductions to the amount of rent received for these periods. Don’t forget to include all your rental income, especially from sharing economy platforms. The ATO matches data received from these providers to information in tax returns, and has in the past followed up on discrepancies uncovered. And one last point is to not to forget any possible CGT implications on sale. See more

25.12.2021 Take the opportunity Enjoy a lamington or two today and let’s all appreciate the great outdoors we are so lucky to have ... We’ll be back at it tomorrow (Pic: @komoceanphoto)

21.12.2021 Organise your finances When starting a business, there are things you'll need to consider to organise your finances, such as bookkeeping, payments and your budget. ... Follow these steps to organise your finances and keep your business on track. Set up a business bank account If you operate as a sole trader you don’t legally have to have a separate bank account for your business you can use your personal account. However, to easily track your business income and expenses, consider opening a separate business account. If your business operates as a partnership, company or trust then you must have a separate business bank account for tax purposes. Set up a bookkeeping system There are many manual and electronic bookkeeping products that could suit your business. If you’ve employed a financial professional, have a chat to them about the products that will best work with their systems. Learn why setting up a basic bookkeeping system helps you keep your books in order. Prepare a budget Preparing a budget outlining your forecast income and expenses helps you manage your cash flow when starting and running your business. Payment types and invoicing templates You'll need to decide on your payment terms and payment types your customers can use. You may also need to set up an invoicing template and receipts to give your customers when selling goods and services. It’s important to provide a correct invoice for your goods and services. Make sure to include a clear due date and follow up on payments that fall behind. If your business provides subscriptions or memberships, consider setting up an automatic payment system or direct debit. This will save you the hassle of chasing payments. Manage your cash flow Keep track of the money that’s coming in and going out of your business. An easy way to do this is to use a cash flow statement. A cash flow statement allows you to track your income and plan your expenses. This lets you plan ahead and feel comfortable in the knowledge that you’ll have the money to pay your bills. Would you like to know more? Get in touch

12.12.2021 BUSINESS ACTIVITY STATEMENT Your business may need to complete business activity statements (BAS) to report on taxes and make payments.... Your BAS helps you to report on taxes like: goods and services tax (GST) pay as you go (PAYG) withholding PAYG instalments fringe benefits tax (FBT) instalments luxury car tax - external site wine equalisation tax The fields you need to complete in your BAS will depend on: your business registrations whether you’re completing a monthly or quarterly BAS. Tips for getting your BAS right: reconcile the BAS figures with your records check your purchases and sales are reported in the correct period only complete the sections that apply to you The Australian Taxation Office (ATO) will send your activity statement about 2 weeks before the end of your reporting period. Complete and return by the due date on your BAS, along with any payment due. Use a registered agent. Make sure anyone doing your BAS is a registered agent with the Tax Practitioners Board. There is no protection if you use an unregistered tax or BAS agent. Would you like to know more? Get in touch

01.12.2021 Super: ASIC warning SMSFs and crypto-currencies ASIC has warned that it has noticed an increase in marketing recommending Australians switch from retail and industry superannuation funds to SMSFs so they can invest in a high return portfolio - especially cryptocurrencies. ... It has stated that crypto-assets are a high risk and speculative investment. Australians who decide to self-manage their super should consider the risks before using their SMSF to invest in crypto-assets. As the trustee of your SMSF, you ultimately bear responsibility for the fund’s decisions and for complying with the law even if you rely on other people’s advice licensed or otherwise. If you decide to set up an SMSF, you should seek professional advice to determine what investments to make. There are rules governing investments the SMSF can make and taxation consequences for investments, including cryptocurrencies. Would you like to know more? Get in touch

23.11.2021 Dutiable Value of Used Vehicles Under the Duties Act 2008, duty applies to the grant or transfer of a vehicle licence based on the dutiable value of the vehicle at the time of the grant of transfer.... The dutiable value of a used vehicle is the amount for which the vehicle might reasonably be sold, free of encumbrances, in the open market. When a person applies for the grant or transfer of a vehicle licence, they must include a signed statement setting out: their estimate of the dutiable value of the vehicle at the time of the application and if they have purchased the vehicle, the purchase price. The person may be required to give evidence of the dutiable value of the vehicle. Although the WA Department of Transport assesses duty when an application form is submitted for the grant or transfer of a vehicle licence, the Commissioner of State Revenue will reassess the amount of duty if an investigation reveals the dutiable value was not accurately assessed. Penalty tax will apply when the Commissioner determines the dutiable value was under declared. Would you like to know more? Get in touch

03.11.2021 Need to use the SMSF early engagement and voluntary disclosure service? The self-managed superannuation fund (SMSF) early engagement and voluntary disclosure service provides a single-entry point for SMSF trustees and professionals to engage with the ATO early in relation to any unrectified contraventions.... If you voluntarily disclose unrectified contraventions before the ATO commence an audit, your disclosure will be considered in determining the action the ATO takes. When making a voluntary disclosure you must provide the ATO with: all the relevant facts supporting documentation rectification proposal or proposed Enforceable undertaking. You also need to actively engage with the ATO throughout the resolution process. When a contravention has occurred, you should continue to work with your appointed SMSF professionals, including your SMSF auditor, to develop a plan or undertaking to rectify them as soon as possible. Would you like to know more? Get in touch

25.10.2021 TBAR lodgement reminder The transfer balance account report (TBAR) is used to report events that affect a member's transfer balance.... The quarterly TBAR for self-managed super funds (SMSFs) is due on 28 January 2022. You are required to lodge your TBAR by this date if: a transfer balance account (TBA) event occurred in your member’s SMSF between 1 October and 31 December 2021, and any member of your SMSF has a total super balance greater than $1 million. You're not required to lodge if no TBA event occurred during this time frame. Would you like to know more? Get in touch

05.10.2021 Appointing an SMSF auditor You need to appoint an approved self-managed super fund (SMSF) auditor to audit your fund each year. This needs to happen at least 45 days before the lodgment due date of your SMSF annual return (SAR).... The auditor examines your fund's financial statements and assess your fund's compliance with super law. Your approved SMSF auditor must be: registered with the Australian Securities and Investments Commission (ASIC) - you'll need to provide their SMSF auditor number (SAN) on your SAR independent, as auditors shouldn't audit a fund in which they hold any financial interest in, or where they have a close personal or business relationship with members or trustees. They also shouldn't audit a fund where they work for a firm who provides your fund with other services such as certain accounting services, tax, super or financial planning advice. The role of an approved SMSF auditor is to review your fund's financial statements and accounts, and to assess your fund's compliance with super laws. You can find a list of approved SMSF auditors on the ASIC website. Your SMSF's audit must be finalised before you lodge your SAR, as you'll need some information from the audit report to complete the SAR. You must also ensure the correct auditor details are provided in the SAR, otherwise you may be penalised. Approved SMSF auditors can be busy so it's a good idea to start this process early. Would you like to know more? Get in touch

19.09.2021 RevenueWA from the Western Australian Government are emailing some employers an invitation to confirm their level of taxable wages and whether they need to register for payroll tax in WA. If you receive an email about this, you will need to complete a questionnaire and potentially resolve any issues without requiring a full audit. ?... RevenueWA conducts audits and investigations to ensure the correct amount of tax or duty is paid, and exemptions are applied correctly. To streamline the compliance review process and reduce the burden on businesses and individuals, RevenueWA gather initial information which gives you an opportunity to provide information upfront. If you provide sufficient evidence, RevenueWA may resolve the matter without requiring a full audit. When RevenueWA need additional information for compliance purposes, they will email you. Would you like to know more? Get in touch

12.09.2021 A New Year reminder - an early release of super is illegal. Withdrawing your super early unless you meet a condition of release is illegal.... Generally, you can only withdraw your super when you reach retirement. There are limited circumstances where you can legally withdraw your super early, such as: specific medical conditions if you are experiencing severe financial hardship. Super laws provide specific rules for when you can withdraw your super. These are called conditions of release. You can access your super when you: reach your preservation age and retire reach your preservation age and choose to begin a transition to retirement income stream while you are still working are 65 years old (even if you have not retired). You can also access super in some special circumstances, including: COVID-19 (novel coronavirus) early release of superannuation compassionate grounds severe financial hardships terminal medical condition temporary incapacity permanent incapacity super less than $200 temporary resident departing Australia. Beware of people promoting early release of super schemes. They might tell you they can help you withdraw your super to pay off credit card debt, buy a house or car, or go on a holiday. These schemes are illegal. Illegal schemes will cost you a lot more than the super you withdraw and will get you into trouble. There are severe fees and penalties. Promoters of schemes encouraging the illegal early release of super may face prosecution and civil or criminal penalties. Would you like to know more? Get in touch

29.08.2021 A very Happy New to everyone! Looking forward to working together in the new year to help take the stress out and to help it be a success for all.... We return on Tuesday 4 January, so 2022 we’re ready!

20.08.2021 A new way to invoice in the new year e-Invoicing is the new fast and easy way to automatically send and receive invoices in your software. It doesn't rely on email and attachments, such as PDF files.... Benefits of e-Invoicing include: saving time and money by reducing manual data entry, as invoices appear in your software, ready to be paid not having to fix errors, or chase missing information or lost invoices getting paid faster, improving your cash flow reducing the risk of scams and fraud supporting the environment by reducing printed records. Talk to your preferred software provider or us about how to get started. There are a number of 'e-Invoicing-ready' products available, including free or low-cost solutions. You can only send e-Invoices to businesses that are registered on the e-Invoicing network. Let your trading partners know you're registered and encourage them to get started, so you can all reap the benefits. e-Invoices are transmitted securely by approved ATO service providers. Although the ATO administer the network, it can’t access or view your invoices. Would ypu like to know more? Get in touch

12.08.2021 Reflecting on 2021 and the year ahead This year we've seen a number of changes and updates for SMSFs, including:... trustee membership increase transfer balance cap indexation the move to use SuperStream for SMSF rollovers introduction of the director identification number (director ID) the release of the Law Companion Ruling 2021/2 dealing with non-arm’s length expenditure. Also, this year the ATO commissioned an independent SMSF research study to help it understand what support trustees and SMSF professionals need. The research highlighted the important and significant role professionals play in helping trustees meet their regulatory obligations. The ATO will continue to explore these findings, so you can expect to hear more about this as the ATO move through 2022. With all the challenges of 2021 it has never been clearer that our best success comes from working alongside industry stakeholders across the SMSF sector. Moving forward to 2022, the ATO is committed to continuing to provide support to trustees, existing and prospective, and professionals operating in the sector. The recent release of the ATO’s Starting an SMSF publication is the first in a series of publications the ATO will be delivering in the new year to support trustees throughout the lifecycle of their SMSF. Would you like to know more? Get in touch. We’ll be back 4 January 2022 (Source: ATO)