Superannuation Amnesty

There is currently a superannuation guarantee (SG) amnesty which allows employers to disclose and pay previously unpaid employee superannuation guarantee for quarters between 1 July 1992 to 31 March 2018.

Disclosures made under the amnesty will not incur the administration charge ($20 per employee per quarter) or the Part 7 penalty.

Also, payments made under the amnesty and before 7 September 2020 will be tax deductible.

Employers seeking to participate in the superannuation amnesty need to apply by 7 September 2020.

Eligibility

To be eligible for the amnesty, you must meet the following criteria:

  • you have not been advised that the ATO is examining or is intending to examine your SG obligations for the quarter(s) your disclosure relates to;
  • you have disclosed an SG shortfall for an employee you haven’t already disclosed to the ATO;
  • you disclose a shortfall for the quarter(s) starting from 1 July 1992 to 31 March 2018;
  • you lodge your completed SG amnesty form with the ATO so it is received no later than 7 September 2020

You will also need to pay the amount owing to the ATO (or set up a payment plan) after lodging the SG amnesty form.

Benefits of the amnesty

If you qualify for the amnesty, you:

  • Will be able to claim a tax deduction for SG amounts covered by the amnesty that are paid by 7 September 2020;
  • Won’t be required to pay the administration component ($20 per employee per quarter)
  • Won’t have a Part 7 Penalty applied.

Failure to disclose unpaid super

The ATO will continue to conduct audits of employers not paying their employees’ superannuation.  If these employers are identified (before they voluntarily disclose their liability), they will not be eligible for the benefits of the amnesty.  They will be required to pay:

  • The superannuation shortfall
  • The nominal interest charge of 10%
  • The administration charge ($20 per employee per quarter)
  • The Part 7 penalty (up to 200% of the superannuation guarantee charge)

What should affected employers do?

You need to act immediately to determine whether you have underpaid your employees’ superannuation for any previous quarter.

For unpaid quarters within the amnesty period, you apply for the amnesty by lodging an approved SG amnesty form.

If you are eligible, you will receive written notification from the ATO within 14 days of lodging the amnesty form. 

In order to claim a tax deduction for amnesty-related payments, you must make the relevant payments by 7 September 2020.

Free ATO Online Course – employer SG obligation

The ATO also have a free online course designed to educate employers about their superannuation guarantee responsibilities for their employees.  You can access the course here.

If you would like to discuss how to apply for the amnesty, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

2020 End of Year Tax Planning

Now is the time for taxpayers to consider their current tax positions to see if there are steps they can take to minimise their tax liability prior to 30 June. 

We have outlined below some of the main tax planning ideas that you can consider.

$150,000 instant asset write-off for businesses

The instant asset write-off threshold for businesses increased to $150,000 for the period 12 March 2020 to 30 June 2020 (with a further extension to 31 December 2020 pending the passing of the relevant legislation).  See our separate article about the $150,000 instant asset write-off.

Superannuation contributions

The June quarter superannuation guarantee liability is required to be paid by 28 July.  However, a business can only claim a tax deduction for employees’ superannuation when it is actually paid.  As such, to ensure you get a deduction in the current year, you need pay your employees’ June superannuation guarantee liability prior to 30 June (cashflow permitting).  We recommend that the payment be made by 20 June (to ensure it is processed by the recipient superfund). 

If you use the ATO’s superannuation clearing house, they have recommended paying no later than 23 June.

Personal superannuation

You may also want to make personal contributions to super.  For the 2019/20 financial year, the maximum concessional (deducted) contribution is $25,000.

However, for the 2019/20 financial year, if your superannuation balance was less than $500,000 as at 30 June 2019, it may also be possible for you to take advantage of the new unused concessional cap carry forward rules.  Please see our separate article regarding personal superannuation contributions.  

Trade debtors

You should review your trade debtors as at 30 June.  You must ensure that any debts that are uncollectible are written off prior to 30 June in order to claim a tax deduction for the write-off in the current financial year.  This is particularly important given the effect of COVID-19 on many businesses. It is likely that many businesses will have higher bad debts during the 2020 financial year than in prior years.

Prepay or bring forward your expenses

Make sure you review all of your expenses and bring forward any expenses to June (where possible).  For example, stock up on stationery and office consumables, prepay your insurance and interest (if applicable) and look at any other expenses you may be able to pay in June.  By bringing these expenses forward to June, you are obtaining a tax deduction in the current financial year which will reduce your overall tax bill for the 2020 year.  However, depending on the status of your business given the impact of COVID-19, if your business is in a loss position, bringing forward expenses may not be advantageous.

Defer assessable income

Consider whether it is possible to defer the derivation of your assessable income (being mindful of cashflow implications).  Again, depending on the effect of COVID-19 on your business, you may want to realise more income in the 2020 financial year to utilise losses from COVID-19.  This will vary from business to business.

Motor vehicles

If you are using a vehicle for a high percentage of work-related travel, make sure you keep a logbook.  Without a logbook, an individual is limited to claiming a maximum of 5,000km at $0.68 (or $3,400).  If you keep a logbook, you can claim the business percentage of the operating costs of the vehicle (petrol, registration, servicing, depreciation, interest etc).

Working from home

If you worked from home during the 2020 financial year (which is very likely during the COVID-19 pandemic), you may be able to claim a deduction for a percentage of the running costs of your home.  The ATO have provided a shortcut method for you to calculate the deduction for your operating expenses using a cents per hour calculation:

  • $0.52 / hour from 1 July 2019 to 29 February 2020
  • $0.80 / hour from 1 March 2020 to 30 June 2020

If you would like to discuss end of year tax planning for your personal situation, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

2019 End of Year Tax Planning

Now is the time for taxpayers to consider their current tax positions to see if there are steps they can take to minimise their tax liability prior to 30 June. 

We have outlined below some of the main tax planning ideas that you can consider.

$30,000 instant asset write-off for businesses

The instant asset write-off threshold for businesses has increased to $30,000.  There are different eligibility criteria and write-off thresholds throughout the 2019 financial year.  We have summarised these criteria here.  If you want to take advantage of the instant asset write-off, you will need to make sure you acquire the asset prior to 30 June.

 

Employee superannuation

The June quarter superannuation guarantee liability is required to be paid by 28 July.  However, a business can only claim a tax deduction for employees superannuation when it is actually paid.  As such, to ensure you get the deduction in the current year, we recommend that you pay your employees’ June superannuation guarantee liability prior to 30 June (cashflow permitting).  We recommend that the payment be made by 20 June (to ensure it is processed by the recipient superfund).  If you use the ATO’s superannuation clearing house, they have recommended paying no later than 24 June.

 

Personal superannuation

You may also want to make personal contributions to super.  For the 2018/19 financial year, the maximum concessional (deducted) contribution is $25,000.

Please call us if you are considering making personal contributions superannuation to check whether:  

(a) you can claim a tax deduction for making personal contributions

(b) how much you may be able to claim as a deduction

(c) whether it is tax effective for you to make the personal contribution

(d) what process needs to be followed in order to make the contribution

You also need to consider whether making a contribution fits within your overall financial plan as advised by your financial advisor.

 

Trade debtors

You should review your trade debtors as at 30 June.  You must ensure that any debts that are uncollectable are written off prior to 30 June in order to claim a tax deduction for the write-off in the current financial year.

 

Prepay or bring forward your expenses

Make sure you review all of your expenses and bring forward any expenses to June (where possible).  For example, stock up on stationery and office consumables, prepay your insurance and interest (if applicable) and look at any other expenses you may be able to pay in June.  By bringing these expenses forward to June, you are obtaining a tax deduction in the current financial year which will reduce your overall tax bill for the 2019 year.

 

Defer assessable income

Consider whether it is possible to defer the derivation of your assessable income (being mindful of cashflow implications).

 

Motor vehicles

If you are using a vehicle for a high percentage of work-related travel, make sure you keep a logbook.  Without a logbook, an individual is limited to claiming a maximum of 5,000km at $0.66 (or $3,300).  If you keep a logbook, you can claim the business percentage of the operating costs of the vehicle (petrol, registration, servicing, depreciation, interest etc).

 

Rental properties

If you have a rental property, we wrote a blog post for Affinity Electrical outlining some of the main end of year considerations for rental properties.  You can access the blog post here.

 

If you would like to discuss end of year tax planning for your personal situation, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Instant asset write-off

There have been some significant changes to the instant asset write-off over the past few months.  Below we have summarised the eligibility criteria and the write-off threshold for the 2019 year:

If you would like to discuss how your business can make the most the of the instant asset write-off, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,