Author: Glance Consultants

 

There has been a recent change in the regulatory requirements for Rollovers and certain Release Authorities.

It is now mandatory to use SuperStream from 1 October 2021 if any benefits are being rolled in or out of an SMSF in cash as per the new regulations.  Also, certain release authorities may be processed in SuperStream.  Please click on the below link for more detail.

ATO SuperStream Rollover v3 requirement for SMSFs

For SuperStream, you will need:

• an electronic service address (ESA) – you can get an ESA from an SMSF messaging provider
• an Australian business number (ABN), and
• to ensure your SMSF’s details held by the ATO are up to date, including your SMSF’s unique bank account.

One of requirements of SuperStream is to make the rollover via SuperStream no later than 3 business days after receiving the request.  This will involve bringing the accounts up to date to determine the member’s balance before making the payment.  Therefore, the Fund Trustee should delay requesting benefits to be rolled over until the member’s benefit calculation has been finalised to avoid breaching the 3-day requirement. The auditor would be verifying if the payment was made within 3 days as part of the compliance audit.

If you have any questions regarding the above, please contact our office on 03 98859793.

 

Although we know that the Australian economy is in relatively good shape, the current lockdown situation, following previous disruptions does take its toll on businesses & individuals and as a result, recovery can be slow. 

Therefore, thankfully, the Australian Banking Association has declared that they will support both Australian businesses and individuals suffering as a result of closed businesses and reduced working hours.

There is no need to tough it out on your own and if you are finding your situation difficult, your bank may have ways to help you get through it. By assessing your situation on a case by case basis, whether you be an individual, a small business or a larger scale one, options will be made available to ensure that the necessary lockdowns do not pose a significant and lasting detrimental impact on your financial wellbeing. 

We urge you to feel comfortable with contacting support either directly with your bank or by contacting our office to discuss your current situation, if any government assistance is available, forecast your future prospects and potentially pivot to make positive change.

You would be made aware of packages that are available to you through the government or relief can be offered to you by your bank to provide respite as lockdowns continue for the wellbeing of the health system and our communities.

Support from banks include business banking payment deferrals, which can extend for up to 3 months and is available only to loans that are good standing. Some 98% of small businesses can receive this support, designed for those lending less than $3 million with a turnover of less than $5 million. 

Everyday banking support and home loan support is also available to both individual and business customers which include refunds of merchant terminal fees for up to three months, waiving of fees and notice periods and home loan deferrals on a month by month basis, depending on your situation. 

Speak up and receive the support that is available to you so that you do not need to suffer through any detrimental financial impacts that the lockdowns may otherwise impose on you and your business.

Call Glance Consultants located at 217A High Street, Ashburton VIC 3147 today on 03 9885 9793 or email us at enquiries@glanceconsultants.com.au

On the road – How to treat work-related travel and living away from home costs.

The ATO has released new guidance to help clarify the tax treatment of costs and allowances incurred when an employee travels – or spends time living away from home – for work.

Certain conditions need to be met to ensure an allowance can be considered a travel allowance:

■ None of the individual absences from the employee’s usual place of residence exceed 21 days.

■ The employee is not present in the same work location for 90 or more days in an FBT year.

■ The employee returns to their usual residence once their period away ends.

See the table on the following page for a breakdown of the characteristics of travel allowances versus living away from home allowances.

Where the applicable allowance type remains unclear, certain questions can be asked to discern further, such as:

■ Has there been a change in the employee’s regular place of work?

■ Is the duration of the employee’s period away from home relatively long?

■ Is the nature of the accommodation such that it becomes the employee’s usual place of residence?

■ Can the employee be visited by family and friends?

Of course, for a travel expense to be deductible, the employee must be able to demonstrate that it was incurred while travelling for work. Unless exceptions apply, the employee must maintain written evidence of the expenditures and keep travel records for work- related trips that involve an absence of six or more consecutive nights from their usual residence.

The ATO does allow for the not-uncommon scenario where an employee attending a conference, for example, is accompanied by their spouse and stays an extra few days for leisure purposes – although reasonable apportionment is required in these cases.

The ATO also recognises that where employees regularly travel to the same location they may choose to rent or even buy a property there rather than stay in a hotel, motel or AirBnB. The associated costs will be deductible provided they are not disproportionate to what would have been paid had the employee elected to use suitable commercial accommodation instead.

It’s important that allowances paid (or reimbursements made) to cover an employee’s accommodation, food and drink expenses do not form part of a salary packaging arrangement, and must be included in the employee’s payment summary with tax withheld where appropriate. The employer should also obtain and retain documentation establishing that all the circumstances have been met.

 

SMSFs & property development Emerging risks

There has been an increase in the number of SMSFs entering into arrangements where real property is purchased and developed to subsequently be sold or rented out. Such investments can help the fund build up its wealth more quickly than other forms, and from a tax standpoint, any rent or eventual capital gain may enjoy concessional tax treatment.

There are four main ways an SMSF may structure a property development investment or arrangement:

■ Engage an unrelated property developer. The simplest and least risky method, where a developer undertakes the development for payment.

■ Undertake the development itself. For example, an SMSF purchases a house and does its own renovations. The key issues to avoid here are payments to related parties and borrowing funds to finance improvements.

■ Invest in an ungeared related unit trust or company. In this scenario, the trust/company would undertake the development. Such an entity is not subject to the in-house asset rules (unlike a related geared unit trust), but must meet the requirements listed in the Superannuation Industry (Supervision) Regulations 1994 (SIS Act).

■ Through unrelated unit trusts. Where no single SMSF owns 50% or more of the units in a unit trust (as doing so would mean it was in control of the trust and thus a related trust). This has the advantage of allowing the unrelated unit trust to borrow.

SMSF property development is layered with complexity. The sole purpose test, payments to related parties, and the in-house rules are just some of the SIS Act provisions that can lead to an SMSF becoming non- compliant. While the ATO recognises that property development can be a legitimate option for SMSFs, it has flagged the following investment types as liable to raise a red flag:

■ Where they are used to inappropriately divert income into the superannuation environment.

■ Where property development ventures are funded in a way that is inappropriate for retirement purposes.

■ Where they are implemented in a way that can lead to inadvertent but serious contraventions of the SIS Act.

What are some of these potential contraventions?

■ Collateral purposes. Where a property development venture could amount to the SMSF being maintained for a collateral purpose – that is, one other than providing retirement benefits to its members (or their dependants). For example, where the SMSF trustees have other roles within the property development venture (either through other businesses or control of other entities), it is important they can demonstrate that decisions made were solely pursuing the retirement purpose of the SMSF.

■ Related party loans/financial assistance. SMSFs are prohibited from providing loans or financial assistance to members or their relatives. In the property development space, this means not engaging a related party to provide services as a means of providing them with work, and not paying more than market value for their services.

■ Operating standards. SMSF money and assets must be kept separate from those held by a trustee personally; assets must be appropriately recorded at market value; and all transactions carefully documented.

■ Limited recourse borrowing arrangement. An SMSF may borrow money to acquire the land/ property by entering into a LRBA, but the LRBA must be on arm’s-length terms – that is, trustees should consider: repayments and ability to repay; arrangements to provide security to a lender; and related party fees. Also, the amounts borrowed cannot be used to develop or improve the acquirable asset, and if money from other sources is used to fundamentally change the property’s character, it may contravene LRBA requirements by ceasing to be the same/original single acquirable asset.

■ In-house assets. Subject to certain exceptions, an in-house asset of a superannuation fund is an asset that is: a loan to a related party of the fund; an investment in a related party of the fund; an investment in a related trust of the fund; or an asset of the fund that is subject to a lease or lease arrangement between the trustee of the fund and a related party of the fund. Contraventions of the in-house asset rules can occur where the SMSF is deemed to be “investing” in the property development, and thereby potentially exceeding the level of in-house assets allowed (i.e. more than 5% of the market value of the fund’s assets in any financial year).

■ Taxation. SMSFs in the property development game also need to properly discharge their tax obligations, which include income tax matters (such as the non- arm’s length income provisions and general anti- avoidance rules) as well as GST matters (such as registration requirements, correct reporting and the application of the margin scheme).

The ATO is closely monitoring property development arrangements involving SMSFs, and while SMSFs investing in property development will often deal with related parties as part of that development, it’s imperative for trustees to recognise that each transaction must be conducted on arm’s-length terms and recorded as such.

SMSF clients should seek independent advice before entering into property development arrangements, as non-compliance can result in adverse consequences including the forced sale of assets and even closure of the SMSF.

Clients who have already developed property or invested in a property development venture should assess their investment against the issues flagged here – and where contraventions or concerns are identified, disclose them to the ATO so that rectification plans can be put in place.

Claiming GST credits for employee reimbursements

If you are an employer registered for goods and services tax (GST), you may be entitled to claim GST credits for payments you make to reimburse employees (including company directors) or partners in a partnership for certain work-related expenses.

If you are running a business, you will be entitled to a GST credit for an employee-reimbursed expense if the following criteria are met:

■ the employee’s (or associate’s) expense is directly related to their activities as your employee or the reimbursement is an “expense payment benefit”

■ the sale of the item bought by your employee was taxable (that is, not “input taxed”), and

■ your employee is not directly entitled to a GST credit for the expense.

The ATO says a business can claim GST credits where it has relevant documents such as receipts or tax invoices issued to the employee. These will need to be provided to substantiate claims for reimbursement.

A business that is entitled to a GST credit can claim it in a Business Activity Statement once it has been provided with this documentation.

An “expense payment benefit” is made, according to the ATO, when a business makes a payment to, or reimburses, another person “in whole or in part, of an amount of money spent by your employee as part of their employment with you”. Fringe benefits tax (FBT) may apply however.

A business is not entitled to a GST credit if it has:

■ reimbursed “non-deductible expenses”, such as the portion of expenses relating to entertaining clients (usually only half of such expenses are deductible for the provision of entertainment)

■ reimbursed expenses that relate to input taxed sales that are made in the running of the business and it exceeds the special threshold for financial purchases (a reduced GST credit is therefore available on specific purchases), or

■ paid the employee an “allowance”.

The ATO says that if a business makes a payment to an employee based on a “notional” rather than an actual expense, it is not making a reimbursement. For example, if a business makes a cents-per-kilometre payment to cover work-related use of an employee’s private car, it is paying an allowance and not making a reimbursement (again, consider the FBT implications).

MAKING REIMBURSEMENTS

A business makes a reimbursement where it pays an employee for the price, or part of the price, of a particular purchase they made.

For example, if an employee incurs an expense of $220 for a purchase, and is re-paid the whole $220 or even half of that, either payment will be a reimbursement. A business will also have made a reimbursement if:

■ it pays the employee for a particular expense they haven’t paid, provided they have become liable for the expense

■ it pays the employee an advance for an expense they have not yet incurred, providing they have to repay any unspent amount of the advance to the business, or

■ it pays an expense on behalf of the employee, for example, to the business that has made a sale to the employee (the GST legislation treats this type of payment as a reimbursement).

Where any personal use of a purchased item is involved, or the expense relates to non-cash employee benefits, liability for FBT should be a consideration.

Buying a new home before selling the old one: The ins and outs

Sometimes an individual or couple decide to buy a new home before selling their existing one. In such cases, a concession exists that allows for both houses to be treated as a main residence for up to six months – but only if certain conditions are met. Section 118-140 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that both the old and new dwellings can be treated as the taxpayer’s main residence for the lesser of:

■ The six-month period immediately before the sale of the existing home, or

■ The period between the purchase of the new home and the sale of the existing home.

So if it takes a taxpayer less than six months to settle on the sale of their original home after having settled on the sale of their new home, then both homes can be treated as the taxpayer’s main residence during this period.

On the other hand, if more than six months passes between the settlement of the new home and the (later) settlement of the original home, both dwellings will only be treated as a main residence for a maximum period of six months before the settlement on the original home.

In the latter instance, a partial CGT exemption will apply during the excess period (i.e. after the maximum six months) to either the original or new home. Which of them it is will depend on which did not qualify as the taxpayer’s main residence.

Other than the fundamental requirement that the new home must become the taxpayer’s main residence, the other two key requirements that must be met for the concession to apply are:

■ The existing home must have been the taxpayer’s main residence for at least 3 of the 12 months before the taxpayer’s “ownership interest” in it ends, and

■ The existing home must not have been used to produce assessable income in any part of that 12-month period when it was not the taxpayer’s main residence.

That said, an absence concession exists that can be used to allow the original home to qualify as a main residence — including where it may have been rented in that 12-month period. This is because the effect of the absence concession is to continue to “treat” the original home as the taxpayer’s main residence — notwithstanding any absence and any income use in this period.

The example on the following page featuring ‘Anne’ illustrates how the “absence concession” can work in conjunction with the “changing main residence concession”.

Note that that purchased vacant land or land with a partly constructed building on it can also be treated as the taxpayer’s new home for the purposes of the concession.

Example scenario

Anne acquired a dwelling on 1 January 2008 where she lived until she went overseas on 1 January 2019. Anne did not rent the home during her absence. She acquired another dwelling on 1 February 2020 and moved into that dwelling on her return from overseas on 1 March 2020. Anne disposed of the first dwelling on 1 August 2020.

The law recognises that Anne continued to treat the first dwelling as her main residence for the period 1 January 2019 until she disposed of it on 1 August 2020.

In fact, from 1 February 2020 Anne would have been able to treat both dwellings as her main residence for up to six months, ending when she ceased to have an ownership interest in the first dwelling.

Trust distributions to non‐residents

When an Australian trust makes a distribution to a non-resident beneficiary, it is often the case that the Australian trust is required to pay tax on the distribution.

The trustee’s payment of tax on trust distributions to non-resident beneficiaries of an Australian trust is a tax collection security measure. It is a type of withholding tax, which is not a final tax in Australia.

When the non-resident beneficiary lodges their Australian tax return, the beneficiary will be refunded some of the tax paid by the Australian trust if the tax paid by the Australian trust exceeds the amount payable by the non- resident beneficiary.

Where an Australian trust makes a distribution to a non-resident trust that, in turn, distributes the amount to a non-resident individual, the non-resident trust is not liable for Australian tax.

Where the Australian trust derives dividends, interest or royalties – and distributes this income to a non- resident beneficiary – the Australian tax law applies a withholding tax to the payments. The rate of withholding depends on the type of income and whether Australia has a double tax agreement with the country to which the amount is being paid.

The payment of the withholding tax by the trustee is a final Australian tax – which means the non-resident beneficiary is not subject to any further Australian tax on the income.

Generally, where an Australian fixed trust makes a capital gain from the disposal of assets that are not directly or indirectly related to real property located in Australia and distributes that gain to a non-resident beneficiary, neither the Australian trust nor the non- resident beneficiary are liable to Australian tax.

Stapling super: Reducing multiple accounts for employees

New legislation will ensure that when an employee moves jobs, the super fund they used with their former employer will be ‘stapled’ and will automatically follow them.

Under current rules, if an employee changes jobs multiple times over their working life and does not nominate a superannuation fund to their employer, they could end up with multiple superannuation accounts, each charging their own fees and insurance premiums.

To prevent this from happening and to stop unintended accounts being created for employees, including for short-term jobs, the Your Future, Your Super legislation will require that a person’s super is ‘stapled’ to them (unless they actively choose to change funds) as they progress their employment.

The changes will apply to employees starting a new job from 1 November 2021.

 

Click here to view our Glance Consultants Newsletter via PDF

 

If you can’t work because you or someone in your household is impacted by COVID-19, support is available.

There are two payments accessible to individuals: the COVID-19 Disaster Payment; and, the Pandemic Leave Disaster Payment.

How to apply for support

You can apply for the COVID-19 Disaster Payment through your MyGov account if you have created and linked a Centrelink account. Apply for the Pandemic Leave Payment by phoning Services Australia on 180 22 66.

COVID-19 Disaster Payments

The COVID-19 Disaster Payment is a weekly payment available to eligible workers who can’t attend work or who have lost income because of a lockdown and don’t have access to certain paid leave entitlements. If you are a couple, both people can separately claim the payment.

Timing of the payment

The disaster payment is generally accessible if the hotspot triggering the lockdown lasts more than 7 days as declared by the Chief Medical Officer (you can find the listing here). However, the disaster payment will also be available:

• In NSW from 18 July 2021, to anyone who meets the eligibility criteria. The requirement to be in a Commonwealth declared hotspot has been removed and the payment will apply to anyone in NSW impacted by the lockdowns who meets the other eligibility criteria.

• In Victoria from 15 July 2021, to anyone who meets the eligibility criteria. The requirement to be in a Commonwealth declared hotspot has been removed and the payment will apply to anyone in Victoria impacted by the lockdowns who meets the other eligibility criteria. And, the 7 day requirement has been removed so that the payment will be made for the period from 15 July 2021 (paid in arrears from 23 July 2021).

 

How much is the payment?

The COVID-19 disaster payment amount available depends on:

• How many hours of work you have lost in the week, and

• If the payment is on or after the third period of the lockdown.

The payment applies to each week of lockdown you are eligible and is taxable (you will need to declare it in your income tax return).

Eligibility

The COVID-19 disaster payment is emergency relief. It is available if you:

• Live or work in an area that is subject to a state or territory public health order that imposes restriction on movement and is declared a Commonwealth COVID-19 hotspot, or

• Have visited an area that is a Commonwealth COVID-19 hotspot and you are subsequently subject to a restricted movement order when you return to other parts of New South Wales or interstate.

And you:

• Are an Australian citizen, permanent resident or temporary visa holder who has the right to work in Australia, and

• Are aged 17 years or over, and

• Have lost 8 hours or more of work or a full day of your usual work as a result of the restrictions – losing work includes being stood down by your employer, not being assigned any shifts for the week of restrictions and being unable to work from home. Losing a full day of what you were scheduled to work but could not work because of a restricted movement order. This includes not being able to attend a full time, part-time or casual shift of less than 8 hours, and

• Don’t have paid leave available through your employer (other than annual leave), and

• Are not receiving income support payments, a state or territory pandemic payment, Pandemic Leave Disaster Payment or state small business payment for the same period. Income support payments include Age Pension, Austudy, Carer Payment, Disability Support Pension, Farm Household Allowance, JobSeeker Payment, Parenting Payment, Partner Allowance, Special Benefit, Widow Allowance, Youth Allowance and Income Support Supplement, Service Pension or Veteran Pension from the Department of Veterans’ Affairs.

A liquid assets test of $10,000 previously applied to the disaster payment but was removed from Thursday, 8 July 2021.

Pandemic Leave Disaster Payment

The Pandemic Leave Disaster Payment is for those who have been advised by their relevant health authority to self-isolate or quarantine because they:

• Test positive to COVID-19;

• Have been identified as a close contact of a confirmed COVID-19 case;

• Care for a child, 16 years or under, who has COVID-19; or

• Care for a child, 16 years or under, who has been identified as a close contact of a confirmed COVID-19 case; or

• Care for a person who has tested positive to COVID-19.

How much is the payment?

The payment is $1,500 for each 14 day period you are advised to self-isolate or quarantine. If you are a couple, you both can claim this payment if you meet the eligibility criteria.

Eligibility

The Pandemic Leave Disaster Payment is available if you:

• Are an Australian citizen, permanent resident or temporary visa holder who has the right to work in Australia; and

• Are aged 17 years or over; and

• Are unable to go to work and earn an income; and

• Do not have appropriate leave entitlements, including pandemic sick leave, personal leave or carers leave; and

• Are not getting any income support payment, ABSTUDY Living Allowance, Paid parental leave or Dad and Partner Pay. Income support payments include Age Pension, Austudy, Carer Payment, Disability Support Pension, Farm Household Allowance, JobSeeker Payment, Parenting Payment, Partner Allowance, Special Benefit, Widow Allowance, Youth Allowance and Income Support Supplement, Service Pension or Veteran Pension from the Department of Veterans’ Affairs.

The payment is taxable and you will need to declare it in your income tax return.

If you are uncertain of your eligibility, talk to Services Australia. If you are concerned about the impact of disaster relief payments on you, talk to us.

NSW Child-care gap fee

From 19 July 2021, the Government is enabling childcare services in NSW Local Government Areas subject to stay at home orders to waive gap-fees for parents keeping their children at home due to current COVID-19 restrictions. The gap fee is the difference between the Child Care Subsidy (CCS) the Government pays to a service and the remaining fee paid by the family.

The child-care gap fee waiver is only applicable where the childcare service opts in.

The current Local Government Areas are: Bayside, Blacktown, Blue Mountains, Burwood, Camden, Campbelltown, Canada Bay, Canterbury-Bankstown, Central Coast, Cumberland, Fairfield, Georges River, Hawkesbury, Hornsby, Hunters Hill, Inner West, Ku-ring-gai, Lane Cove, Liverpool, Mosman, North Sydney, Northern Beaches, Parramatta, Penrith, Randwick, Ryde, Shellharbour, Strathfield, Sutherland Shire, Sydney, The Hills Shire, Waverley, Willoughby, Wollondilly, Wollongong and Woollahra.

NSW Eviction moratorium

The NSW Government will introduce a targeted eviction moratorium to protect residential tenants who have lost 25% of their income due to COVID-19.

60 day freeze on evictions

Tenants who can’t pay their rent in full because they are impacted by the recent COVID-19 outbreak can’t be evicted between now and 11 September 2021.

Financial support for landlords

Residential landlords who decrease rent for impacted tenants can apply for a grant of up to $1,500 or land tax reductions depending on their circumstances. The land tax relief will be equal to the value of rent reductions provided to financially distressed tenants for up to 100% of the 2021 land tax year liability.

The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information. If expert assistance is required, professional advice should be obtained.

Updated 19 July 2021

 

Click to view our What lockdown support is available PDF

 

For those businesses that have found mid-July come about exceptionally quickly, thankfully, the ATO has extended the initial deadline for the expected Single Touch Payroll changes. Rather than the usual 14th July due date, you now have until 31st July to make any end-of-year STP finalisation declarations.

This is due to the continued impacts of the Covid-19 pandemic and subsequent restrictions taking place across Australian communities, giving a much-needed reprieve for some to ensure that they can assimilate all necessary documentation in time.

However, if you can complete declarations at an earlier date, the ATO does urge you to do so. We also remind businesses to ensure that they inform all of their employees that they have finalised their data so that they can lodge their income tax returns.

It is pleasing to see that the ATO is reacting to pressures that both businesses and agents are facing when faced with deadlines that are heavily impacted by the different phases of lockdowns and the unknown future that each week brings.

By providing a further two weeks grace to make any end-of-year STP finalisation declarations, businesses and their supporting professionals can take the necessary time to ensure that documentation is filed correctly and remains compliant with the new laws that have come into play this financial year.

At this point, the due date of 30th September for those with a mixture of arm’s length employees and closely held payees remains the same. Those small businesses that only have closely held payees need to complete all documentation by that given payee’s tax return due date.

If you are unsure when any of your finalisation documentation is due, or are unsure what new information you are expected to provide this financial year, then please get in touch with us as quickly as possible to remain compliant and within these reformed due dates to avoid complications.

We understand that this is a particularly stressful time of year for most businesses, and the impact of the Covid-19 reactions by the government these past 18 months have placed further pressure on everyone.

Thankfully, the regulatory bodies are recognising this and providing support where possible to ease anxiety and tension throughout the Australian community.

For those small businesses and sole traders that continue to be affected by the necessary restrictions for the continuing health of the public, there is additional funding from the Victorian government to the sum of $8.4 million designed to provide relief.

This comes with praise from many, especially businesses significantly impacted by lockdowns and cannot operate online to significant effect.

There are approximately 3700 small businesses that are set to receive this support, with eligible sectors including gyms, yoga studios and dance schools. Unfortunately, as we know, these businesses have been unable to operate during the Covid-19 lockdowns imposed upon the state as the community works together to ensure the safety of those living within the border, as well as those outside of it.

Although a creative approach to operating remotely is encouraged, such as with online classes, there is no hiding the fact that most of these businesses have been unable to bring in the cash flows necessary to remain in a healthy financial state for when business resumes.

This additional support comes on top of the already provided $2500 to $5000 that is available to such businesses through the Business Costs Assistance Program Round Two, bringing the total support to date at about $7000 to those eligible businesses.

The total support for businesses that have been announced recently has gone beyond the $500 million mark. This includes this extra funding, the Business Costs Assistance Program, the Licenced Hospitality Venue Fund and the Regional Tourism Support Package.

As the names of each of these suggest, the different financial support packages are designed for other sectors of business that are seen to have been significantly affected by Covid-19 restrictions within the community. In total, over 90,000 different businesses across many sectors will be offered support through these schemes over the next three weeks.

With some applications restricted to deadlines, it is important that you act swiftly to obtain the support that you and your business is entitled to as we all continue to do what is necessary to keep Covid-19 out of our community.

Please call our office on 03 9885 9793 or email us at enquiries@glanceconsultants.com.au if you have any questions.

 

After a couple of years, the STP (Single Touch Payroll) initiative rolled out by the ATO has been going strong, supporting businesses to deliver real-time digital payroll reports. This includes Gross wages, PAYG withholding tax and superannuation information. As this process has been a gradual change from the previous process, there have been exemptions for certain smaller businesses from the initial deadlines. Until now, that is.

If you are facing the transition into STP for the first time this financial year, our team here at Glance Consultants are more than capable to assist. It may seem a little daunting, needing to utilise a new digital payroll system for the first time. Our team are familiar with its requirements.

As of July 1st 2021, businesses that were previously not required to report through the STP, such as micro-businesses and seasonal employers or those with closely held employees, will need to transmit wage information through Single Touch Payroll.

What is a closely held employee?

This is another term for employees directly related to the business, such as family members of a business owner who are being paid for their time, beneficiaries of a trust, directors and shareholders. So, for example, if you employed your uncle for the use of his truck or a cousin you will need to process payroll and submit the information via STP.

You can either submit the information directly yourself or outsource this function to your bookkeeper/accountant, depending on how involved you wish to be in the financial matters of your business. We will also discuss the timeframe you are given, whether you need to be declaring wages weekly, monthly, quarterly or yearly, as businesses will be faced with different circumstances.

If you are one of the small businesses having to adapt to STP, embrace the digital transformation as a positive experience, especially when you have us on your side. The STP process allows you to simplify matters when it comes to EOFY.

Contact our office located at 217A High Street, Ashburton VIC 3147 on  03 98859793 or email us at enquiries@glanceconsultants.com.au for assistance your STP obligations.

 

The Superannuation Guarantee (SG) increase is set to go ahead. However, we advise business owners to ensure that they understand the changes that are progressively being rolled out over the coming years and prepare for them to avoid penalties.

From July 1st, 2021, the base rate is set to rise from 9.5% to 10%, and this will be followed by incremental half per cent increases until the base rate sits at 12%, beginning July 1st, 2025.

Since late payments, underpayments or non-payments will attract the attention and potential penalties from ATO, in as little as 24 hours, it is best to have practises put in place as early as possible to ensure that your business isn’t red-flagged.

We understand that, in general, businesses operate in the interest of their bottom line. However, what is essential during this change is that you are transparent with your employees about how it will affect their take-home pay from month to month. Whether you as a business are looking to meet the total cost of the superannuation guarantee increases over the coming years or leave your employees to bear the brunt of the change within their pay packages, we implore you to be transparent about these changes and the impact that it will have on your business and those who work within it.

The superannuation guarantee, although legislated for some time, was still up in the air as late as March this year due to the precise impact that it will potentially have on wage growth in the country and the impact on employers and their profit margins. Larger profit margins generally result in business growth, which enables job opportunities within the community. The extra 0.5% yearly increase is likely to come at the cost of reduced wage growth and new jobs in the market over the coming years.

Since this is not a once-off payment, rather an incremental change spanning several years that will ultimately impact profit margins, it is imperative that we include the SG increase into forecasting models to allow you to properly budget, especially if you are a business that has a large workforce.

Should you wish to discuss these or any other considerations regarding the superannuation guarantee increases, then get in touch with one of team here at Glance Consultants on 03 98859793 or at enquiries@glanceconsultants.com.au .

Our office located at 217A High Street, Ashburton VIC 3147 is open Monday to Friday 9:00am – 5:00pm and Saturdays: by appointment only.