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ATO payment arrangements

Circumstances will sometimes get in the way of your ability to pay a personal or business tax debt on time.

If this is the case, it is vital to go on the front foot and put a payment arrangement in place with the ATO. For larger business debts, this is now more important than ever with new legislation allowing the ATO to disclose the business tax debt information of a taxpayer to credit reporting bureaus in certain circumstances. […]

Employee or contractor?

Do you run a business and have or are thinking about hiring workers? If so, it’s important to understand the difference between contractors and employees, as you have different tax and superannuation responsibilities depending on the status of the worker.

What’s the difference between contractors and employees?

Generally speaking, an employee works in your business and is part of your business. A contractor is a person who is typically running their own business and the business engaging their services has little direction or control in respect of how that service is supplied. […]

More super for lower-income workers on the way

Did you know that lower-income earning individuals who earn less than $450 per month are currently not eligible for superannuation guarantee (SG) contributions from their employer?

The $450 per month threshold also applies if an employee has more than one part-time or casual job and they earn more than $450 per month from all jobs combined. It simply comes down to the amount earned per job which can disadvantage many younger or lower-income workers.


But not for long …

The good news is that the $450 threshold will be abolished from 1 July 2022 due to recent legislative changes. This means that all employers will have to pay SG contributions for all employees, regardless of how much they earn per month.

The removal of the $450 per month threshold will benefit an estimated 300,000 people or 3% of employees[1], who are mainly young and/or lower-income and part-time workers, approximately 63% of whom are female[2]. These changes will help these workers start accumulating super earlier as well as help address the gap in super savings between women and men. […]

Benefits of a corporate trustee structure for your SMSF

Thinking about setting up an SMSF? Or do you already have an SMSF with an individual trustee structure? If so, now might be the time to consider adopting a corporate trustee structure for your fund.

With over 60% of all SMSFs having a corporate trustee structure, there are many benefits in setting up a company to be the trustee of your SMSF.

For background, each member of an SMSF is required to be a trustee of the fund. Alternatively, you can choose a corporate trustee model (ie, a company to act as the trustee of the fund), which means each SMSF member must also be a director of the trustee company. […]

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. […]

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. […]

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. […]

Regulator Roundup March 2020

Increasing maximum SMSF members to six is still official policy
The SMSF Association held its annual conference recently, which was addressed by Assistant Minister for Superannaution, Senator Jane Hume, who stated that it remains government policy to see an increase in the maximum number of SMSF members from four to six. Implementation of the Hayne banking commission recommendations was however a priority, she said. (See full speech here.)

“This proposed change is significant,” Hume said, “because it increases the flexibility of our self-managed superannuation sector. It will allow situations such as families with up to four children to be part of a single family superannuation fund.” […]

SMSF contribution paid this year, but you want to allocate to it next year

The ATO has in place a ruling that can allow a superannuation contribution to an accumulation account made in one financial year to be deemed to “take effect” (that is, allocated to a particular year’s contribution total) in the financial year that follows.

Importantly, the ATO requires a form to be lodged, which serves to notify it that a member of a self-managed superannuation fund (SMSF) has made a concessional contribution in one financial year (year 1) but the SMSF did not allocate this to the member until the next financial year (year 2).

Most SMSFs use provisions in their trust deeds concerning contribution reserves to enable this strategy, commonly referred to as a “contribution reserving strategy”. Typically, SMSF members will have made these arrangements to allow contributions to be recognised for income tax deductibility and other purposes in year 1 while not being counted towards their concessional contributions cap until year 2. […]

If you think the ATO got it wrong, here’s what you can do

You are allowed to take issue with the ATO if it disagrees with your self-assessment of your tax position.

If you believe the ATO’s assessment is incorrect, the first step is straight forward and fairly informal. You contact us and we start making inquiries. If it still seems the assessment is wrong, or if you can provide us with extra information that may change it, we can lodge an amendment with the ATO.

But if the ATO disagrees, we can lodge an objection on your behalf (in other words, we can disagree with the disagreement). We can also object if the ATO amends an assessment and has taken a different stance to us on particular things (for example, we thought you were eligible to claim a deduction but were allowed only part of it). […]