Small business immediate asset write-off extended

The federal government yesterday announced proposed enhancements to the instant asset write-off, extending the period of application by a further 12 months to 30th June 2020, and the level at which it cuts out from $20,000 to $25,000.

This scheme allows businesses with less than $10 million in turnover to write-off 100% of a purchased asset worth less than the set level (proposed at $25,000) in their tax return, in the year the asset is purchased.

The government plans to legislate the change when Parliament resumes on 12 February, so best to wait until it is law before relying on the announcement.

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Developers hit with GST credit delays

The ATO has recently issued information to help property developers claim GST remitted on their behalf to the ATO by purchasers.
Since 1st July 2018 all purchasers of new residential property have been required to retain the GST portion of the purchase price and remit it to the ATO, for the ATO to hold as a credit for the developer. This allows the ATO to collect the GST early, and helps guard against rogue developers who do not pay their tax.
Unfortunately, the process involves a series of forms; a complicated process that has resulted in the credit for GST paid not linking back to the developer’s ABN. This has left developers with a GST bill and no credit.
The ATO has reminded developers and conveyancing parties to ensure that all information is provided so that the process can operate effectively, but with such a convoluted series of forms, developers might do well to also keep their fingers crossed!!

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STP gets the green light for smaller employers

Legislation to apply the Single Touch Payroll (STP) system to small employers (those with 19 or fewer employees) has finally been passed by the Senate. This has created a passage for the STP system to come into operation for such employers from 1st July 2019.

In line with previous releases, the ATO has issued an initial list of low cost software providers for taxpayers in the micro business sector (i.e. those with 4 employees or less), who will supply affordable solutions, costing less than $10 per month, take only minutes to complete each pay period, and do not require the employer to maintain the software. The ATO has also raised the possibility of allowing micro employers to report quarterly via their accountant or BAS agent.

The present list of low cost software providers is available here.

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Scammers – as active as ever

The variety of scams designed to take money from the unwary is never-ending. The age old phone call claiming to be from the Australian Taxation Office and threatening jail for an unpaid debt is as popular as ever, with one client recently being asked to call back on 02 6100 4093. If you receive any such call, hang up. If you are concerned and want to check the status of a potential ATO debt we can do that for you on the spot.

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ATO focus on income from car sharing services

The extra income earned by people taking part in car sharing services such as Car Next Door or DriveMyCar has come to the attention of the ATO. These car sharing services work by making private cars publicly available in a similar way to other car hire services – it’s like AirBNB for cars.

Combined, DriveMyCar and Car Next Door state that over $13 million has been paid out to car owners renting through the service.

The community or peer to peer rental can be confusing as many people taking part see it as private. The ATO has taken an interest as some people utilising these services are counting the extra income as a hobby – income from a hobby is not assessable and does not need to be included on your income tax return. But, the ATO is keen to point out that income from sharing services is not a hobby and needs to be declared. The upside is that if you earn income from these activities you might be entitled to claim deductions for things like platform membership fees, availability fees, cleaning fees and car running expenses.

We can help you get your tax position right. Just give us a call.

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Ethical Investing

Ethical investing is rapidly gaining momentum, quadrupling in the last 3 years to approx. $622 billion. The UK and US have a sufficiently deep market to maintain a benchmark for ethical investments, unlike the Australian market which is still in its infancy, with limited choices – currently approximately 40.

In the ethical investment sphere, companies that care about the environment, the treatment of their workers, and have strong social governance, are the ones that are less likely to be affected by changing government regulations or corporate disaster, which could result in a share price decline.

Many investors want a say over where their money is invested, or at least where they don’t want it invested – eg areas such as tobacco, gambling or polluting companies. Ethical investments generally help investors to align their portfolio with their personal values without sacrificing returns. Of course, for many people the return on investments may not just amount to the dollars, but include the resulting environmental benefits and community well-being. Please contact our RDL financial planning team for information on available ethical investments that are right for you.

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Good news on Single Touch Payroll for “micro” employers

The ATO has recently confirmed that micro employers (i.e. those with less than 5 employees) will not need to purchase payroll software to enable them to comply with the Single Touch Payroll reporting obligations, which are due to commence on 1st July 2019 for employers with less than 20 employees.

Assistant Commissioner and STP lead, John Shepherd is quoted as saying that such employers “… won’t need to buy payroll software, that’s why we’re looking for those alternate solutions – some of which might be an app, something that’s fit for purpose to get the STP information in but is easy to use, doesn’t take much time and doesn’t cost that business money to do so.” He also stated that “there are obviously lots of other benefits from using payroll software but we’re not saying for STP that you need to go out and buy a product to do STP.”

The ATO has been seeking expressions of interest from software providers to develop a no cost or low cost solutions for these smaller employers that will enable them to carry out their STP reporting within no more than 5 minutes. The ATO has received responses from over 20 software providers, and it expects to publish a list of “tailored micro solutions” by 10th November.

The legislation to extend the STP regime to employers with less than 20 staff is currently before the Senate.

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ACNC Annual Information Statement lodgement extension

The ACNC today announced an extension to the due date for lodgement of 2018 Annual Information Statements, due to the delay in the release of the AIS.

All charities that have a due date between 31 December 2018 and 28 February 2019 will now have until 31 March 2019 to submit their 2018 Annual Information Statement. The 2018 Annual Information Statement will be available in October 2018, after the launch of the new ACNC website and Charity Portal.

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Casual employee granted leave entitlements

The recent judgement by the full Federal Court in the case of WorkPac Pty Limited V Skene has opened the way for staff employed on a casual basis to potentially access leave and other entitlements, which are normally the domain of permanent staff.
The case, which was handed down in August this year, concerned a Queensland mine worker who was employed through a labour-hire firm on shifts similar to full-time mine workers, but at the casual rate of pay. When his employment was terminated, Mr Skene put his hand up for leave entitlements and requested that penalties be imposed on WorkPac, which after some legal jousting, the Full Federal Court granted.
The case has shocked the employment world, with casual workers now contemplating back-claims for leave entitlements, and employers seeking solutions to avoid this apparent double-dipping by what some have called a new class of “super employee”.
Employer bodies have made representations to government, urging for the law to be tightened to clearly define the term “casual” employee, and create certainty, so that that employees remunerated at casual rates cannot also claim leave entitlements, for which it is considered that they have already essentially been compensated by means of a premium hourly rate.
We will have to watch developments in this area. Clients may wish to discuss this with their employment law advisors, as it is not something that we specialise in at RDL. I found this article on the case to be very informative.

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ACNC Legislation Review Report released

In June this year, the Panel charged with reviewing the ACNC Act presented its report to the Government.  After much anticipation, this report has now been tabled in Parliament.  It makes thirty recommendations, including the following:

  • Basing financial reporting thresholds on a rolling three-year average of revenue, increasing the thresholds to a minimum of $1 million revenue for medium entities, and $5 million revenue for large entities from 1 July 2019.
  • Requiring related party transactions to be disclosed by all charities.
  • Requiring large charities to disclose remuneration paid to senior executives and responsible persons.
  • Removing the Governance requirement to comply with Australian laws.
  • Developing a mandatory Code of Conduct for fundraising and amending the Australian Consumer Law to clarify its application to the charity sector.
  • Amending the ACNC Act to require self-assessing income tax exempt Not-for-profits (such as sporting clubs) to be registered with the ACNC when their annual revenue exceeds $5 million, as a condition to gaining access to tax concessions.

During the consultation period, there were many calls for the current financial and governance exemptions for Basic Religious Charities to be removed.  This creates complexities because it potentially interferes with provisions in the Constitution addressing religious freedom.  As a result, the report recommends that the financial reporting exemption be reviewed only if the changes to reporting thresholds are made, and reviewing the governance exemption only if the following recommendations are also adopted:

  • The ACNC’s power to replace a responsible person is removed.
  • A registered entity be presumed to comply with the ACNC governance standards if it already complies with other comparable governance requirements.

The Government has not yet indicated how it will respond to the recommendations.

The full report is available here.

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