The ATO will be doing further crackdowns this year- even more reason to have a registered accountant do your 18/19 tax return.
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.
All entities in construction industries must report payments to contractors on the Taxable Payments Annual Report (TPAR).
The TPAR is due by 28 August so cannot be part of the tax return preparation.
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.
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.
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.
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.
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.
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.
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 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:
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.
