Category: Blog

Drought Assistance

With large swathes of Eastern Australia in the midst of one of the most severe droughts in years (indeed Autumn rainfall was the least since 1902). Be mindful that there are a number of assistance measures open to affected clients across a range of Government departments. On the ATO front, they can help by giving affected taxpayers more time to pay, waiving penalties or interest charged at a time a client was affected by drought, offering payment plans with interest free periods, and adjusting PAYG instalments to better suit the circustances. Furthermore, in special circumstances the ATO can release clients from paying some taxes, if the paying of those taxes would cause serious financial hardship.

Key Dates for Business Mar-Apr 2018

March 2018

21 March
February monthly Activity Statements – due for lodgement and payment.

April 2018

21 April
March monthly Activity Statements  – due for lodgement and payment.
21 April
Quarter 3 (January-March) PAYG instalment Activity Statments for head companies of consolidated groups – due for lodgement and payment.
28 April
Quarter 3 (January-March) Activity Statements – due for lodgement and payment (if lodging by paper).
28 April
Quarter 3 (January-March) PAYG instalment notices (forms R and T) – final date for payment and, if varying the instalment amound, lodgment.
28 April
Quarter 3 (January-March) GST instalment notices (forms S and T) – final date for payment and, if varying the instalment amount, lodgement.
28 April
Quarter 3 (January-March) superannuation guarantee contributions to be made to a complying fund on behalf of your employees.
30 April
Quarter 3 (January-March) TFN Report for closely held trust for TFNs quoted to a trustee by beneficiaries – fiinal date for lodgement.


Where one of these dates falls on a weekend or a public holiday, the due date is extended to the next business day.

Key Dates for Business Jan-Feb 2018

January 2018

15 January 
Due date for lodgement of income tax returns for companies and trusts that were taxable medium to large businesses in the prior year and are not required to lodge ealier. If you fail to lodge by the due date, your 2017/2018 income tax return will be due on 31 October 2018.
21 January
Due date for lodgement and payment of December 2017 monthly Activity Statements.
28 January
Due date for October-December 2017 Superannuation Guarantee contributions to be made to a complying fund on behalf of your employees.
31 January
Final date for lodgement of october-December 2017 TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries.

February 2018

21 February
Due date for lodgement and payment of January monthly Activity Statements.
28 February
Due date for lodgement and payment of October-December 2017 quarterly Activity Statements, including electronic lodgments.
28 February
Due date for lodgement and payment of Annual GST returns or Annual GST information reports – if you do not have an income tax return lodgment obligation.
28 February
Due date for lodgement and payment of income tax return for self-preparing entities that were not due at an earlier date. If you fail to lodge by this date, your 2017/2018 reutrn will be due by 31 October 2018.
28 February
Due date for lodgement and payment of income tax returns for medium to large businesses (taxable and non-taxable that are new registrants)
28 February
Due date for lodgement and payment Superannuation Guarantee Charge Statement if you failed to pay Superannuation Guarantee Charge on time for the October-December 2017 quarter. Superannuation Guarantee Charge is not deductible.

Where one of these dates falls on a weekend or public holiday, the due date is esxtended to the next business day except in the case of October-December 2017 Super Guarantee contributions – these are due on Sunday 28 January 2018.

Key Dates for Business Nov-Dec 2017

Many key dates are looming for business including those relating to Activity Statements, superannuation, and more

November 2017

11 November July-September quarterly Activity Statements – due for lodgement and payment (if lodging electronically)
21 November October monthly Activity Statements – due for lodgement and payment
28 November Superannuation Guarantee Charge (SGC) Statement – due for lodgement and payment if insufficient contributions or late contrifutions were made for the July-September quarter

December 2017

01 December Due date for income tax payment for companies that were required to lodge by 31 October 2017
21 December November monthly Activity Statements – due for lodgement and payment

SINGLE TOUCH PAYROLL

Information for employers

Single Touch Payroll reporting starts from 1 July 2018 for employers with 20 or more employees.

To find out if you need to be ready by then, you will need to do a headcount of the employees you have on your payroll on 1 April 2018 (see How to count your employees).

If you have 20 or more employees on that date you will be a ‘substantial employer’. You will need to report through Single Touch Payroll from 1 July 2018. This is now law.

If you have 19 or less employees, Single Touch Payroll reporting will be optional until 1 July 2019. It will be mandatory from that date, subject to legislation being passed in parliament.

How your reporting will change

Your payroll solution will need to be updated for Single Touch Payroll reporting.

When you pay your employees through your Single Touch Payroll-enabled solution you will be reporting payments such as their salaries and wages, allowances, deductions (for example, workplace giving) and other payments, pay as you go (PAYG) withholding and super information to the ATO at the same time.

Your payroll cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly. You may have different pay cycles for different employees.

It simply means that when you complete your payroll, the tax and super information for each employee will be sent to us. This is a more streamlined way of reporting to us.

https://www.ato.gov.au/about-ato/about-us/in-detail/strategic-direction/streamlined-reporting-with-single-touch-payroll/?anchor=Employers1#Employers1 

Trust Resolutions That Don’t Make The Grade

A recent decision by the Full Court of the Federal Court has shone a spotlight on year end Trust Resolutions that should be a reminder to all Trustees of the importance of taking the time to prepare a valid resolution to distribute the annual income of a trust.

The decision in Lewski Vs Commissioner of Taxation (2017) FCAFC 145 whilst a “win” for the taxpayer has been deemed a “lucky” outcome by many commentators.

In Brief:

The Commissioner of Taxation sought to amend the income of 2 trusts by disallowing carry forward losses of approximately $10 Million and $3 Million respectively. In disallowing these losses, it meant the commissioner then assessed Ms Lewski to this additional income as the presently entitled beneficiary of each trust.

Ms Lewski sought to have the Commissioner’s determination set aside and either reduce or deflect any tax liability to either the trustee of the trust or to alternate beneficiaries under a variation clause in the original trust resolution. In either case, there would have been less tax payable than had Ms Lewski been the beneficiary of that amended income.

The Outcome:

The ultimate outcome determined by the court hinged on the resolution documents prepared by the trustee in each of the relevant income years.  In each resolution, there was a “variation of income” clause that indicated that should the Tax Commissioner disallow any amount as a deduction or include an amount as assessable income of the trust, there would be a deemed distribution to a default beneficiary.

This variation clause effectively made the trust resolutions contingent upon an event that may occur after the end of an income year. The court ultimately found that because the income distribution was subject to a contingency after the end of an applicable income year, this defeated the present entitlement of Ms Lewski to the income of the trust and as a result she was not assessed to that income.

Takeaway:  Avoid variation clauses in trust resolutions.

Whilst the taxpayer had a favourable outcome in this case as a result of the invalidity of the trust resolution, normally, this can result in significant problems for a taxpayer as the trustee would be assessed to that income at the highest marginal tax rate.

NON-COPRPORTATE TAX CUTS – SBITO

The Government has passed legislation increasing the rate of the Small Business Income Tax Offset (SBITO). This article details this change and its tax impact.

INCREASED OFFSET
Along with companies, the more than 70% of small businesses that are not incorportated will also enjoy additional income tax relief from 2016/2017. In 2016/2017 income and later income years, a higher rate of SBITO will apply:

  • For 2016/2017 to 2023/2024, the SBITO is 8% of an eligible individual’s basic income tax liability that relates to their total net small business income (up from 5% in 2015/2016).
  • For 2024/2025, the SBITO is 10% of an eligible individual’s basic income tax liability that relates to their total net small business income.
  • For 2025/2026, the SBITO is 13% of an eligible individual’s basic income tax liability that relates to their total net small business income.
  • For 2026/2027 and later income years, the SBITO is 16% of an eligible individual’s basic income tax liability that relates to their total net small business income.
Furthermore, the aggregated turnover test for access to the SBITO has been increased from 2016/2017 to $5 million (up from $2 million).

BACKGROUND
By way of background, individuals are entitled to the SBITO if they are an SBE (i.e. sole trader) or they have a share of a smaill business’ net income included in their assessable income (for example, distrbutions from a partnership or trust which themselves are SBEs) provided the small business is not a corporate tax entity (i.e. company). An individual can only claim one SBITO for an income year irrespective of the number of sources of small business income that an individual receives. The maximum amount of the SBITO from all sources of SBE income is $1,000 for an income year which will be claimed in your year-end tax return. 

Although capped at $1,000 per individual, serveral individuals within the one structure can enjoy their own SBITO (not just the business owner) provided at the end of income year they are assessed on income from an SBE. The discount is applied to your net small business income’ as follows:

To contine reading this article in full, log into the members area and see the July/Aug 2017 Newsletter update:- https://www.mytaxsavers.com.au/2017-page_jul-page_aug-page_17/       
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DEPRECIATION FOR NON-BUSINESS TAXPAYERS

For individuals not in business, who are preparing their tax return over the coming months, depreciable items you acquire for work purposes can in certain circustances be claimed outright. This means you get an immediate deduction for the cost of the asset to the extent that you use it to generate assessable income during the income year:

The immediate deduction is availasble when you start to hold a depreciating asset in an income year and the asset costs $300 or les, and:
  • Is used predominantly for the purpose of producing assessable income that is not derived from carrying on a business
  • Is not part of a set of assets you start to hold in that year that costs more thant $300 , and
  • Is not one of a number identical or substantially identical assets acquired in the same year that together cost more than $300.

Examples of depreciating assets which could be eligible for the immediate deduction are:
  • Tools of trade acquired by a tradesman
  • A briefcase purchased by a salary and wage earner for their job; and
  • Furniture purchased for a rental property.

Key Dates for Business Sept-Oct 2017

Many key dates are looming for business including those relating to Activity Staterments, GST, Superannuation, Income Tax Returns, and more….

September 2017 

21 September 
August monthly Activity Statements – due for lodgement and payment.
30 September Annual TFN withholding report for closely held trust where a trustee has been required to withhold amounts from payments to beneficiaries during 2016/2017 – due for lodgement.

October 2017

21 October September monthly Activity Statements – due for lodgement and payment.
28 October Final date for eligible quarterly GST reporters to elect to report GST annually.
28 October Due date for Superannuation Guarantee contributions for July-September to be made to employee funds.
31 October PAYG Withholding Where ANB Not Quoted – Annual Report – due date for lodgement. These amouns are also reported at W4 on your Activity Statement.
31 October Due date for 2016/2017 individual tax returns (unless you are lodging via a tax agent and are on their lodgement list by this date).

Where the due date falls on a weekend or public holiday, it is deferred until the next business day, (except in the case of Superannuation Guarantee deadlines).

Key Dates for Business July & August 2017

Many lodgement and payment deadlines are looming for business including those relating to Activity Statements, Superannuation, and more….

July 2017

1 July First day of the 2017/2018 financial year
14 July 2016/2017 Payment Summaries – due date to issue to employees
21 July Monthly Activity Sttements (July 2017) due for lodgement an payment
28 July Quarterly Activity Statements (April-June) due for lodgement and payment (if lodging by paper)
28 July Superannuation Guarantee Contributions (April-June) due for payment to superannuation funds or clearing houses

August 2017

11 August Quarterly Activity Statements (April-June) due for lodgement and payment (if lodging electronically)
14 August PAYG Withholding Payment Summary Annual Reports due for lodgement
21 August Monthly Activity Statements (July 2017) due for lodgement and payment
21 August Final day for eligible monthly GST reporters to elect to report annually
28 August Contractor Taxable Payments Annual Report due for lodgement