SMSF

Are you the trustee of a SMSF?

The ATO runs webinars which are available for trustees of their own SMSF as well as professionals, here is a link to some previous webinars that are still available to watch and another to sign on for upcoming ones.

https://www.ato.gov.au/super/self-managed-super-funds/in-detail/smsf-resources/smsf-webinars/

https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/Past-webinar-recordings/

Economic response to the coronavirus

The Federal Government have announced an economic stimulus package in response to the coronavirus outbreak to hopefully help stimulate the economy. The measures will include incentives to fast track investment, apprentice wage subsidies and cash payments of up to $25,000 for small and medium businesses to save jobs and help businesses battle supply disruptions. In addition to the business measures there will be one-off cash payments to pensioners and Newstart recipients in a measure aimed at helping stimulate consumer demand.

Business Payments Up To $25,000

The government will include a $6.7 billion funding assistance package for small and medium businesses to assist with; the payment of wages, put on extra staff and invest or prepare for the downturn. Under these measures, eligible businesses with turnovers of up to $50 million will be eligible for tax free payments of up to $25,000.

Businesses that pay the ATO income tax (PAYG Withholding Tax) on employees’ salary and wages either monthly or quarterly will receive a payment equal to 50% of the amount withheld up to a maximum of $25,000.

Business Asset Write-Off Scheme

The current business instant asset write-off scheme will be significantly expanded. The expanded instant asset write-off is expected to operate from today to the 1 July 2020 to help stimulate business investment.

Under the present scheme, businesses with turnovers of up to $50 million can instantly write-off assets valued at up to $30,000.

Under the changes announced the business turnover threshold will increase to $500 million and the asset value that can be written-off will increase to $150,000.

Apprentice Wage Assistance

Wage subsidies will be provided to small businesses who employ apprentices. The package will offer up to $7,000 each quarter as a wage assistance for each apprentice so small businesses can retain existing apprentices & trainees or re-employ apprentices & trainees who lose their position from a small business because of the coronavirus downturn.

Cash Payments to Pensioners & Newstart Recipients

within the stimulus package there will be one-off cash payments to both pensioners and Newstart recipients

If you have any questions or concerns as to how this may affect your business, contact us at cannon accounting and we can go over the finer details with you.

https://treasury.gov.au/coronavirus

Coronavirus stimulus package

A little more information on the governments coronavirus stimulus package.

If you are receiving a payment from Centrelink there will be a one off payment of $750 to boost the currant down turn in the economy, this payment will not be deducted to recoup any outstanding Centrelink debts, as they have been doing with tax refunds for the past few years.

Centrelink have also put it in place measures for anyone that needs to self isolate or go into quarantine to not have to meet job requirements and they can apply for a 14 day exception. Anyone that is diagnosed and needs to take longer time off work can apply for sickness allowance which will be granted straight away.

This may be particularly useful for those in the arts who have had gigs/performances cancelled due to the new laws around social events and gatherings of more than 500 people.

Attached is some more information as to who is eligible and what steps to take if you are affected by quarantining.

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_households.pdf

Special professionals

With the government having announced a ban on events with more than 500 people attending a lot of people that work in the arts- performers, sound engineers, production crews, technicians and operators have been heavily financially affected.

This may be of some assistance to you at this time.

Are you a special professional?

A special professional includes an author of a literary, dramatic, musical or artistic work, an inventor, a performing artist, a production associate,sound engineer or a sportsperson.

There are different tax laws and income averaging applied to these fields, this is an area we at cannonAccounting specialise in, having musicians, singers, actors and producers on our books we have vast experience with getting the best return possible for these professions.

If you think this may apply to you give us a call and we can have a chat to discuss the best way to go about your next tax return.

https://www.ato.gov.au/Forms/Income-averaging-for-special-professionals-2019/

https://www.ato.gov.au/Forms/Income-averaging-for-special-professionals-2019/?page=4#Average_taxable_professional_income

https://www.ato.gov.au/Forms/Income-averaging-for-special-professionals-2019/?page=5#Above_average_special_professional_income

Tax department recouping debts via tax returns:

As of last financial year the ATO has aligned with Centrelink to recoup any outstanding debts owed, if you have an outstanding debt with Centrelink this may affect the tax return you receive back, this is still applied if you have a payment plan in place. No notifications of this will be sent to the agent or client prior to recouping of funds.

Single Touch Payroll

Another Government mandated nightmare is heading your way if you have employees (even yourself as an employee of your own company).

From 1 July 2018 you must use Single Touch Payroll if you have 20 or more employees. That may not be a problem as with 20 employees you probably use a computerised payroll system anyway which you would expect to be compliant by that date.

The real problem is 1 July 2019 when at this stage ALL employers must use Single Touch Payroll even if it is just you as an employee of your own company.

So what is Single Touch Payroll? It is a “new, simpler way to report your employees’ payroll information”, well according to the Government anyway. It means your payroll must be computerised, or you contract it out to a commercial supplier, and all wages, tax and super is reported to the ATO in real time.

Superannuation Certainty

We finally have some short term certainty about superannuation:

Superannuation Guarantee:

The Superannuation Guarantee requires your employer to make superannuation contributions for all employees both casual and full time earning over $450 per month, and for contractors in some cases, at the rate of 9.5 % of ordinary time earnings until 30 June 2021. The rate is set to increase after this date.

No increase in tax on super fund investment earnings:

Superannuation fund investment earnings are taxed at 15 per cent in accumulation phase, and are tax free when the fund is paying an income stream (previously known as “pension”)

As from 1 July 2017 the government has imposed a cap of $1.6 million on the value of assets that you may take into pension phase, so if you intend to start an income stream and expect to have more than $1.6 million in superannuation as at 1 July 2017, you will need withdraw or transfer the excess.

Concessional contributions caps:

The concessional cap is $25,000 for all age groups fro m1 July 2017.

Non-concessional (after-tax) contributions caps:

The non-concessional contribution cap is $100,000, and if you’re under the age of 65, you can bring forward another 2 years’ worth of contributions, which means you can make up to $3000,000 in non-concessional contributions in a three year period.

Tax-free super benefits for over-60s

If you’re aged 60 years or over, you your superannuation income stream is tax free from most funds (some old style untaxed funds do not provide tax free income streams).

If you are aged under 60 but have met a condition of release your income stream is taxable and has a 15% tax offset available.

Tax exemption for TRIPs remains until 30 June 2017

The Government has removed the tax-exempt status of earnings supporting a transition-to-retirement pension (TRIP) as from 1 July 2017. Until 30 June 2017, the investment earnings on super assets financing a TRIP are exempt from tax.

Low Income Super Tax Offset (LISTO):

LISTO will provide continued support for low-income earners and ensure that generally they do not pay more tax on their super contributions than on their take-home pay.

Eligible individuals will be paid via a contribution benefit into their fund. The effect of the LISTO payment to the individual’s account is to offset the tax their superannuation fund pays on their contributions.

Co-contribution scheme remains in place

If you’re a low or middle-income earner and make personal (after-tax) contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.

The amount of government co-contribution you receive depends on your income and how much you contribute.

Tax treatment of death benefits

The tax treatment of death benefits is unchanged with dependants under the tax laws (such as spouses and children under the age of 18), continuing to receive death benefits free of tax, and non-dependants (such as financially independent adult children) liable for a 15 per cent tax on the taxable component of the death benefit.

Contractor Payments

Contractor payments 2016-19

The ATO will acquire data from businesses that it visits as part of its employer obligations compliance program during the 2016-17, 2017-18 and 2018-19 financial years.

Data to be collected include: ABN of the payer business; ABN of the payee business (contractor); name, address and contact details of the contractor; dates of payment to the contractor; and amounts paid to the contractors (including details of whether the payment included GST). It is estimated that records for 25,000 of entities will be obtained, including the records of 12,500 individuals.

The program aims to:

  • assess the integrity of the information held on the Australian Business Register to assist the Registrar develop educational and compliance strategies;
  • obtain intelligence to identify risks and trends about contractors that may not be complying with their taxation obligations;
  • ensure compliance with registration, lodgment, correct reporting and payment of taxation and superannuation obligations;
  • promote voluntary compliance and better tailor educational products and services.

The ATO noted that the program has been ongoing since the 2008-09 financial year and has resulted in improved compliance with obligations and additional income tax, GST and PAYGW liabilities being raised.