In this update:
Businesses
$20,000 instant asset write-off extended
Is your business Single Touch Payroll (STP) ready?
ATO Small Business benchmarks
Superannuation obligations
Key dates coming up
Individuals
ATO focus on work related expenses - The 3 Golden Rules
Concessional superannuation contributions
Data matching for online accommodation platforms
Pledging and donating to online crowd funding campaigns
If you have any questions about any topic in this update or would like to discuss anything further, please don’t hesitate to contact Marko.
$20,000 Instant Asset Write-Off Extended
The instant asset write-off deduction for assets costing less than $20,000 HAS BEEN extended to 30 June 2019.
Your business is eligible to use simplified depreciation rules and claim the immediate deduction for the business portion of each asset (new or second hand) costing less than $20,000 if:
you have a turnover less than $10 million, and
the asset was first used or installed ready for use in the income year you are claiming it in.
Any assets costing more than $20,000 will be depreciated using the small business General Pool diminishing value depreciation rates of 15% in the first year and 30% for future years.
Is your business Single Touch Payroll ready?
For employers with more than 20 employees, Single Touch Payroll (STP) started on 1 July 2018. For all other employers, the change will happen on 1 July 2019.
STP will mean that every time an employee is paid, information will be sent from your accounting software (e.g. MYOB / Xero / QuickBooks) to the ATO. As a result of STP, businesses will no longer be required to complete payment summaries at the end of the financial year as it will have already been done and available to employees through myGov. You will report your employees’ payroll information (including salaries, wages, PAYG withholding and super information) directly to the ATO from your accounting package. This will provide real time information to the ATO and other government agencies (Centrelink) about payments being received by employees.
If the change doesn’t affect you until 1 July 2019, it’s a good idea to start looking at your payroll processes in the coming months to ensure that you’re compliant and ready to report under the new reporting rules.
ATO small business benchmarks
The ATO publishes its small business benchmarks, providing over 100 different industries with average cost of sales and average total expenses.
In addition to helping businesses to see if they are performing within their industry average, the benchmarks are one of the tools the ATO uses to identify businesses that may be a higher risk - that is, the ATO use the benchmarks to pick their audit targets. Please contact us if you would like us to check whether your data is within the average benchmark range for your industry.
Superannuation OBLIGATIONS
Employers are required to make superannuation payments on at least a quarterly basis to comply with ATO requirements. Quarterly superannuation payments are due as follows:
PAYMENT DUE DATE
28 October
28 January
28 April
28 July
QUARTER
1 July - 30 September
1 October - 31 December
1 January - 31 March
1 April - 30 June
You can make payments more regularly than quarterly if you want to (for example, fortnightly or monthly) as long as your total superannuation obligation for the quarter is paid by the due date.
If you haven't paid the minimum amount on time and to the correct fund, you may have to lodge a Superannuation guarantee charge statement and pay the superannuation guarantee charge (SGC).
WARNING: Superannuation not paid by the quarterly due date is not tax deductible.
Key Dates Coming Up
21 December 2018
21 January 2019
28 January 2019
21 February 2019
28 February 2019
21 March 2019
31 March 2019
Lodge & pay November 2018 monthly activity statement
Lodge & pay December 2018 monthly activity statement
December 2018 quarter superannuation contributions due
Lodge & pay January 2019 monthly activity statement
Lodge & pay December 2018 quarter activity statement
Lodge & pay February 2019 monthly activity statement
2018/19 FBT year ends
Individuals Tax Update
ATO focus on work related expenses - the 3 ‘golden rules’
This year, the ATO is paying close attention to what people are claiming as 'other' work-related expense deductions, so it's important when claiming these expenses taxpayers keep records to show:
they spent the money themselves and were not reimbursed;
the expense was directly related to earning their income; and
they have a record to prove it.
If the expense is for work and private use, you can only claim a deduction for the work-related portion. Importantly, taxpayers are not automatically entitled to claim standard deductions, but need to be able to show how they worked out their claims.
Concessional super contributions
A reminder that the concessional contributions cap is now $25,000 for all individuals.
From 1 July 2017, most people, regardless of their employment arrangement, will be able to claim a full deduction for personal super contributions they make to their super until they turn 75. Employees will no longer be required to salary sacrifice super contributions but can make direct contributions to their fund and claim a deduction. Individuals who are aged between 65 and 75 will need to meet the work test to be eligible to claim the deduction.
If you wish to claim a tax deduction for personal contributions, you must complete and lodge a notice of intent with your super fund and have this notice acknowledged (in writing) by your fund.
Data matching for online accommodation platforms
A recent release from the Commissioner of Taxation has stated that a data matching program will commence between the ATO and online accommodation platforms.
Online accommodation platforms are websites where an individual can list their primary residence (or rental property) for short-term rental income. For example, listing your house when you are away on holidays.
The ATO will collect the data, including the bank details linked to the accommodation account, for the 2016/17 to 2019/20 income years. Through the bank details, the ATO will get a list of individuals who should have declared rental income during those years.
What’s important to note is, if there is some rental income earned on your principal place of residence, there is potentially some capital gains tax which may be payable on your eventual sale.
If you have used these platforms in the past, you may be required to amend your tax returns to declare this income. If so, please let us know and we can get that process started. The ATO generally looks favourably on individuals who have made a genuine mistake.
Pledging and donating to crowdfunding campaigns
Recent years has seen a noticeable uptake in money pledged and donated through crowdfunding campaigns, as noted by the ATO and other media. When making donations to crowdfunding campaigns, the following should be considered:
Deductible Gift Recipients (DGR) – The regular rules relating to DGRs apply to crowdfunding websites. In order for you to claim a tax deduction, you must be notified that the amount you have donated is deductible. Many charities use crowdfunding websites for specific campaigns and drives, and will ensure that they notify you that an amount is deductible.
Usually, the charity will tell you before you make the pledge. However, as crowdfunding websites aren’t necessarily regulated, in particular overseas websites, it may be a lie. To be assured that you are making a legitimate donation, review the DGR details on the ABN Lookup website. The search function on that website gives you the ability to find the charity you are donating to.
Pledges – Making a pledge doesn’t necessarily mean that you have made a deductible donation. Many crowdfunding pages are contingent on hitting a set figure before your pledge turns into a donation. In this case, you may not actually make a donation at all; even if your credit card has had a charge “reserved” from the crowdfunding website.
Also, as pledgers in certain circumstances may be able to get a refund or cancel their pledge, any amount will not be considered a donation until such time as you are notified as such.
Before claiming a donation to a crowd funding campaign as a tax deduction, ensure you are donating to a DGR and that you have physically made a donation.
DISCLAIMER | This update is issued as a helpful guide and is not intended to, and does not cover all aspects of the topics discussed. Professional advice should be sought before any action upon these topics is undertaken. If you have any questions or would like further information please do not hesitate to contact us
Liability Limited by a scheme approved under Professional Standards Legislation