Published 30 November 2018
Superannuation Guarantee Amnesty
The announced Superannuation Guarantee amnesty is not currently in effect. The legislation has not yet passed. The proposed Amnesty will apply for twelve months from 24 May 2018 to 23 May 2018.
Royal Commission into Banking and Financial Services
The Royal Commission into the financial services industry has revealed many instances of financial misconduct. If you are planning on using the services of a professional financial planner you should ensure that:
- They have the relevant professional qualifications.
- Do not sign or agree to anything that you do not understand.
- Ask questions if you do not understand anything
- Be mindful if there are any conflicts of interest. For example, the banks providing financial advice and ‘selling’ their own internal products.
- Listen to your instincts. If you feel you are being pushed into something you do not need to sign or agree to anything. Take the time to think it over.
If you require a financial planner we can refer you to those who will act in your best interest.
Medicare Levy Surcharge (MLS)
You have to pay the Medicare levy surcharge if your income for MLS purposes is above the income threshold and you do not have appropriate private health insurance.
The base income threshold is $90,000 for singles and $180,000 for families.
For singles, an appropriate level of cover must have an excess of $500 or less.
For couples, an appropriate level of cover must have an excess of $1,000 or less.
‘Extras’ cover only does not satisfy the requirements for the Medicare levy surcharge.
Rental Property Travel Deductions – Reminder
From the 1 July 2017, expenses for travel to residential investment properties are no longer deductible. You cannot claim a travel deduction if you are an individual, Self Managed Super Fund (SMSF), partnership or private trust.
Couriers and Cleaners – Taxable Payments Reporting System
It was announced that the taxable payments reporting system will be extended to contractors in the courier and cleaning industries from 1 July 2018.
This legislation has not yet passed and is currently before the Senate.
Businesses in these industries will need to ensure that they collect information from 1 July 2018.
The ATO has indicated that businesses supplying courier or cleaning services are not required to report payments made to contractors via a Taxable payments annual report until the amending legislation introducing the requirement becomes law.
The ATO expects affected taxpayers to have kept sufficient business records to enable the report to be prepared and lodged as soon as is reasonably practicable after the Bill is enacted. After the Bill is enacted, these taxpayers will need to review their payments made to contractors from 1 July 2018, and complete and lodge the Taxable payments annual report for the 2018-19 income year.
Single Touch Payroll (STP)
Single Touch Payroll started on 1 July 2018 for employers with 20 or more employees.
You will report payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information from your payroll program each time you pay your employees.
STP will be expanded to include employers with 19 or less employees from 1 July 2019.
Small Business Instant Asset Write Off
The current instant asset write-off threshold is $20,000. This threshold applies until 30 June 2018.
Small businesses can deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30PM on 12 May 2015 and 30 June 2018.
ATO Tax Time Scams
Be careful of tax time scams! People contact you pretending to be from the Australian Taxation Office and try to obtain personal information. Scammers can contact you by phone, email, text message or online.
Most often these scammers will say that you owe a debt or have a refund owing in order to obtain your personal banking information. Some of these scammers may say that they have spoken to your tax agent or pretend to dial your tax agent and have someone pretending to be from the tax agent’s practice confirming that you owe a debt.
Do not provide credit card details or bank details over the phone. Again, if you are not sure that it is the ATO please call us.
Self Managed Super Funds – New Transfer Balance Cap reporting
From 1 July 2017, superannuation fund members are subject to a $1.6 million transfer balance cap (TBC) which limits the tax exemption for assets funding superannuation pensions.
The TBC encompasses a significant amount of monitoring for an individual. This monitoring is to be facilitated by the Australian Taxation Office’s (ATO) event-based reporting framework.
Why events-based reporting?
Event-based reporting is required for the ATO to track an individual’s transfer balance account across all their funds including public offer and defined benefit funds and administer the appropriate consequences if an individual exceeds their cap.
An SMSF is only required to report if one of its members has an event that impacts their transfer balance account.
When to report – Annual versus Quarterly
From 1 July 2018, timeframes for reporting are determined by the total superannuation balances of the SMSF’s members:
- where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its annual return is due.
- SMSFs that have any members with a total superannuation balance of $1 million or more must report events affecting members’ transfer balances within 28 days after the end of the quarter in which the event occurs.
**Disclaimer: Be advised this information is of a general nature only. Specific advice needs to be obtained for your individual situation. Neither the firm nor any of its employees accepts any liability for any loss or damage to any person as a result of reliance on the rates and information set out on this newsletter.