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April 2019

‘Big awareness push’ underway as STP deadline approaches

Hundreds of thousands of businesses have been prompted by the ATO to get started with their Single Touch Payroll provisions, and its project lead at the tax office believes the business community is better prepared than it was for last year’s deadline.

         

 

Through email and national advertising campaigns, the ATO is drilling in the 1 July deadline for STP, which applies to businesses with 19 or fewer employees.

Assistant commissioner at the ATO John Shepherd thinks accountants, bookkeepers and their small business clients are better prepared for this deadline than they were for the first one in 2018, which applied to businesses with 20 or more employees.

“The knowledge levels have come up… bookkeepers are helping with that message and that preparation,” Mr Shepherd told Accountants Daily at the Accounting Business Expo on Wednesday.

Many software providers weren’t ready for last year’s deadline, which had a knock-on impact on the business community.

“Last year, a lot of the products were only just ready. This time, a lot more are ready, and they are ready with options for smaller employers,” Mr Shepherd said.

However, at this stage, there are more STP products in development and slated for release than there are products that are ready for implementation.

At the beginning of April, information for and access to deferrals for STP will be published on the ATO’s website. There are quarterly reporting options for micro-businesses as part of the transitional arrangements.

 

Katarina Taurian
21 March 2019
accountantsdaily.com.au

GST collection on overseas goods at 300% of forecasts

GST collection for low value imported goods is tracking at 300 per cent of forecasts, as overall GST collection continues to grow.

       

 

Since new laws kicked in on 1 July last year, GST will apply to sales of low-value, imported goods valued at $1,000 or less, to consumers in Australia, in a bid to ensure that such imported goods receive the same treatment as goods purchased domestically.

Deputy Commissioner Tim Dyce said latest revenue figures show that digital marketplaces and lower value international online sales were not an impossible nut to crack.

“The digital services measure has already achieved $272 million GST in the first year or 180 per cent ahead of forecast. We’ve collected $81 million from the low value imported goods measure in the first three months of operation, already above our full year revenue estimate of $70 million. We’re tracking at over 300 per cent of forecast,” said Mr Dyce.

“There was a lot of discussion prior to their introduction about whether these kinds of measures could possibly work, and in many ways it is the most significant change in the way we have collected GST since its inception almost exactly 20 years ago.

“Not only have we had high levels of registration for these measures and well above forecast revenue, we’ve even had feedback from some online sellers that the registration has improved their business processes and given them greater insight into their sales performance.”

The measure, first announced in the 2016–17 federal budget, was expected to raise $300 million over three years.

The ATO’s GST administration annual performance report for 2017–18 showed that the agency raised $63.1 billion in GST cash, 5.5 per cent higher than in 2016-17.

A further $3 billion in GST liabilities was raised through the ATO’s direct compliance activities – a 5.6 per cent increase on last year’s outcome. The Department of Home Affairs raised a further $31.1 million through its compliance activities.

 

Tax&Compliance Reporter
28 March 2019
accountantsdaily.com.au

 

The problem with getting to 53 years of age.

Here's some food for thought and another reason why getting professional help from a financial planner is worth serious consideration.

         

 

Previous articles in this series, which are based on research conducted by Vanguard Investments Pty Ltd, show that a financial planner adds around 3% to what would be the expected return of an investment portfolio. In other words, they provide the expertise and time needed to help you attain your retirement goals and they can help cover their costs at the same time.

However, more research from the Vanguard Investments stable focuses on the significance of the age of 53.

53 is when most of the costs of parenthood are on the decline, a cause for great celebration, but, sadly, it seems declining also is our 'financial capability'. This research has its fair share of confusing terms and definitions such as 'crystalised intelligence' (‘wisdom’ to you and I), 'fluid intelligence' (which peaks, unfortunately, in our early 20's); and 'financial capability'.

When all this is mixed together and the graphs and charts have been drawn the result is that 'the peak age for financial decision-making is…53!'. Ouch!!, and at a time when most of us need the opposite to be true, ‘c'est la vie’.

While many of us are still capable, this research indicate that after we reach 53 another benefit of employing the expertise of a financial planning practice is that their input is provided when we need it the most. That is, during the final 10 year run up to retirement, when there's still time to generate the retirement outcomes you want.

The following are some of the big decisions to be made around the age of 53.

• How do we make the transition to retirement?

• How do we structure our finances to generate an income and deliver capital gains?

• How do we maximise our government entitlements?

• What tax issues need to be considered?

• Will we have enough given our current financial position?

These are big decisions and when relying on your own resources, it’s worth remembering that sometimes we just don’t know, what we don’t know!

 

Peter Graham 
BEc, MBA
General Manager
PlannerWeb / AcctWeb

 

Lost Beneficiaries

How does an executor trace a missing beneficiary?

           

 

Under the Administration of Estates Act, the law says there is a legal obligation to find and distribute estates of people who die without making wills.

But Centrelink insists that identifying anyone, even to a lawful estate trustee, is an invasion of privacy.  So, one government department will not report to another.

Apparently, it is easier than the alternative of helping people get what is rightfully theirs.

Do you have an up to date will or might your executor face extra costs and beneficiaries miss out?

 

 

AcctWeb

New quarterly STP reporting method for closely held payees revealed

The ATO has shed light on how employers will be able to report quarterly for closely held employees under the new single touch payroll regime, including the ability to make amendments before an extended finalisation due date.

         
 
The Tax Office previously announced that the closely held group will be granted a one-year exemption from STP reporting, with employers due to start quarterly reporting from 1 July 2020.
 
The ATO’s definition of a closely held employee is one who is a non-arm’s length employee, directly related to the entity from which they receive payments, including family members of a family business, directors of a company and shareholders or beneficiaries.
 
Recognising that closely held payees are not always paid on a regular basis or a regular amount, ATO director Michael Karavas said the agency will adopt several methods for employers to make reasonable estimates to report on a quarterly basis.
 
The ATO will allow employers to calculate the amounts through actual withdrawals, not including payments of dividends or which reduces the liabilities owed by the business entity to the closely held employee; 25 per cent of the salary or director fees from the previous year per quarter; or by varying the previous years’ amount within 15 per cent of the total salary for the current financial year.
 
“If you lodge quarterly using one of the methods, then the ATO will accept that you made a genuine effort to meet your STP obligations and that will allow you to do that finalisation and make any adjustments at the time you do your tax return at the end of the year,” said Mr Karavas.
 
While other businesses will have to provide a finalisation declaration by 14 July each year, the ATO has granted an extension to closely held payees to the due date of their income tax return.
 
“We are not saying that you need to know your final position by 14 July but we are saying you have made a reasonable estimate, each quarter reported throughout the year and by doing that you are able to make reasonable adjustments at the end of the financial year,” said Mr Karavas.
 
“You'll be able by the due date of your tax return, make that finalisation of what your actual final salary and wages or directors fees are. That finalisation will then make information available through pre-fill for that person's tax return”
 
Legislation to introduce STP across businesses of all sizes was passed last month, with the ATO granting a three-month buffer to 30 September 2019 for small businesses to transition to the new regime.
 
The ATO has also released a detailed register of STP products for micro-businesses, with several options currently available.
 
 
Jotham Lian
19 March 2019 
accountantsdaily.com.au

Some Australian figures to help on Budget night.

       

 

One great source of data about Australia. Become better acquainted with the country we love.

An up-to-date snapshot of Australia's vital statistics.  

Please click on the following link to see all this interesting information. The areas covered are:

  • Overview
  • Markets
  • GDP
  • Labour
  • Prices
  • Money
  • Trade
  • Government
  • Business
  • Consumer
  • Housing
  • Taxes
  • Climate

 

Access all this data here.

 

Federal Budget 2019 – Overview

The Government’s economic plan and this Budget are building a stronger economy and securing a better future for all Australians. This Budget and our economic plan are:

  • Returning the budget to surplus
  • Delivering more jobs
  • Providing lower taxes
  • Guaranteeing essential services like Medicare, schools, hospitals and roads

 

The following video outlines Australia's plan for a bright and robust future for all Australians.

   

 

Source: www.budget.gov.au

 

Employers hit with rolling SG audits as ATO toughens stance

Employers are increasingly being subjected to a rolling series of audits by the ATO where they slip behind on their SG obligations as the Tax Office now taking a harder line on non-compliance, warns a technical expert.

         

 

Insyt chief executive Darren Wynen said the focus by the federal government on SG non-compliance has seen the ATO taking a much tougher approach towards non-compliant employers.

“[In the past], when the ATO audited an employer to check whether they had SG obligations, it would almost be like a self-correction so their view was that if the employer paid it and fixed it up then it would be okay. Now when they audit employers, they’re applying the full suite of penalties,” said Mr Wynen.

Mr Wynen said he has also seen some situations recently where the employer has been subjected to an audit and in the finalisation letter there has been a requirement for them to provide evidence that they have also met their obligations for the latest quarter.

“If that evidence is not provided [to the ATO], then they will effectively commence another audit,” he warned.

“They may have had a year's worth audited for let’s say the 2018 year and if they then haven’t complied with the obligations for the December quarter then the ATO will open up the file and audit their obligations from July 2018 through to December 2018.”

This means that an employer who is continuously not meeting their obligations could be subject to a continuous or rolling series of ATO audits to make sure they’re complying with their super guarantee obligations, he warned.

“Businesses need to check they are satisfying their SG obligation because it will be a whole lot of cost down the track in the event they are audited or subject to a review by the ATO,” he said.

“Businesses are having to spend a lot of money challenging these assessments – particularly if they’ve paid it – to try and get these penalties and so forth remitted.”

While the ATO confirmed that it will waive Part 7 penalties for clients who voluntarily disclose historical underpayment of the superannuation guarantee, despite the proposed amnesty measure not yet being law, employers must still pay the interest amount and the $20 administration component per employee per quarter, in addition to the SG they owe.

“In relation to SG, the ATO only has the discretion to remit the Part 7 penalty. With regard to those taxpayers who made a voluntary disclosure in anticipation of the proposed amnesty, we will remit the Part 7 penalty in full,” the ATO previously told Accountants Daily.

 

Miranda Brownlee
28 March 2019
accountantsdaily.com.au

How the 2019 Federal Budget affects you

The following links take you to that section of the 2019 Budget that affects you most.

     

Easy to watch videos and written detail covering the four main areas of the 2019 Federal Budget, plus, for those who like to read, a link to the Budget documents themselves.

Your Budget:

Lower Taxes

Guaranteeing Essential Services

Investing in our Community

Budget Documents

 

 

Source:  www.budget.gov.au