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Voluntarily repaying JobKeeper and the ATO’s approach to tax treatment

The ATO has stated that eligible businesses that received JobKeeper payments do not need to repay those amounts. However, some businesses may choose to voluntarily repay an amount. This amount can be equivalent to some or all the JobKeeper payments received.

The ATO says that voluntary repayments do not reduce the amount of JobKeeper a business received, and these payments must be included in a business’s assessable income.

A voluntary repayment of JobKeeper may be deductible only in limited circumstances and only if the voluntary payment is clearly appropriate to achieve, or directed at achieving, the business objectives of the business. […]

Director resignations have new laws to follow

ASIC has announced that the Federal Government has introduced new laws to help combat illegal phoenix activity. From 18 February 2021, a company director will not be able to backdate their resignation more than 28 days or resign if it means the company would be left without a director. Backdating resignations was a common tactic used by directors to engage in illegal phoenix activity. […]

ATO says it will not impose penalties for SMSF asset valuations during COVID-19 due to lack of evidence

When SMSF trustees prepare the financial statements and accounts for their fund, they must report the fund assets at market value to comply with regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994 (SISR). Before this came into force on 7 August 2012, unless the fund was paying a pension or held in-house assets, trustees could provide a valuation for fund assets every three years. This was considered no longer sufficient, and assets must now be reported at market value every year with evidence to support the valuation. […]

ATO to allow extended time for minimum yearly repayments on Div 7A loans

In these COVID-19 times, concerns about Div 7A applying are understandable. Some borrowers are facing circumstances beyond their control, and even making the minimum yearly repayments required under complying loan agreements may be out of reach.

The ATO has now announced that it is going to allow extensions to the repayment period for those borrowers who are unable to make their minimum yearly repayment (MYR) by the end of the lender’s 2019-20 income year under section 109RD. […]

SG penalty remissions: How not to trip up, post-amnesty

The ATO has published draft law administration practice statement PSLA 2020/D1 – remission of additional superannuation guarantee charge.

With the SG amnesty now expired, so too has the ability of the ATO to remit part 7 penalties in full (which can otherwise amount to 200% of the SG charge). To provide guidance to its staff around the remission of Part 7 penalties post-amnesty, the ATO has released this practice statement. […]

Top 5 ways to trip up with SMSF annual returns

The ATO has compiled, from many years’ worth of annual return data supplied by self managed superannuation funds, what it says are the top five errors committed by SMSF trustees when lodging their annual tax return.

Knowing where other SMSF trustees have tripped up in the past can go a long way to make sure you don’t commit the same mistake. […]

FBT and vehicles under COVID-19 restrictions

The pandemic period under which we labour continues to have outcomes that may at first have not been obvious, but as time and lodgement considerations come to pass, more taxation consequences edge their way out of the woodwork.

One such outcome is where employees have been garaging work cars at their homes due to COVID-19, and the affects this will have on employer fringe benefits tax (FBT) obligations. […]

JobKeeper payments to get data match scrutiny between ATO and Social Services

Notice was posted recently in the Commonwealth Gazette (C2020G00570) of a data matching program that is to be launched between the ATO and 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).

The notice of the new data matching program notes that the exchange of data involves 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. […]

Planning tool to help businesses reopen

The government’s National COVID-19 Coordination Commission (NCCC) has released an online planning tool to help businesses develop a plan to keep their workers, customers and the community safe as they reopen or increase their activities in the weeks and months ahead.

The NCCC tool, in the form of a template called “My business’s COVIDSafe plan”, brings together information from across the government on the range of help and assistance available to support businesses. This tool complements the Safe Work Australia website, which is a central source of information for businesses to understand their work health and safety obligations. […]

GST obligations now come under the director penalty regime

The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 received assent on 17 February 2020. The legislation includes a range of measures targeting illegal phoenixing including penalties for directors related to GST liabilities (making directors personally liable for unpaid GST if the unpaid liability is not paid within 21 days of a director penalty notice being issued) and retaining tax refunds.

The legislation, which lapsed at the dissolution of Parliament in the lead up to the last federal election but was revived months later, had been the topic of much debate in the lead up to its expected enactment last October. […]