In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.
Bushfire Tax Relief
The ATO has a announced a package of tax relief and assistance for those affected by the recent bushfires in New South Wales, Victoria, Queensland, South Australia & Tasmania.
The ATO estimates that approximately 3.5 million taxpayers have been impacted by the bushfires and has granted an extension to the 28th of May 2020 to lodge and pay BAS and income tax returns.
A list of postcodes identified for automatic deferrals can be found here.
The ATO is also fast tracking refunds to people located in affected areas and will defer recovery action for those with tax debts.
Research & Development (R&D) Changes Deferred
The Government released the Mid-Year Economic & Fiscal Outlook (MYEFO) on the 16th of December and have announced a number of tax changes. Amongst those announcements is a decision to defer the start date of the foreshadowed R&D changes from the 1st of July 2018 to the 1st of July 2019.
The changes are contained in Treasury Laws Amendment (Research & Development Tax Incentive) Bill 2019 which was introduced to the House of Representatives on the 5th of December 2019. The changes included in the Bill include:
– Increasing the R&D expenditure threshold from $100 million to $150 million;
– Linking the R&D tax offset for refundable R&D tax offset claimants to the company’s tax rate plus a 13.5% premium;
– Capping the refundability of the R&D tax offset at $4 million per annum; and
– Increasing the targeting of the incentive to larger R&D entities ($20M+ turnover) by linking the incentive rate to the intensity of R&D investment as a proportion of the company’s total expenditure.
The changes had originally been slated to start with effect from the 1st of July 2018. However, with the start date looming and the changes yet to be passed into law, the Government has taken a decision to defer the start date.
The Government has previously included these changes in Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia & Other Measures) Bill 2018 which was introduced to Parliament back in September 2018. That Bill didn’t proceed through the legislative process and eventually lapsed in April 2019 when the Federal Election was called.
It will be interesting to see if the Government can get more traction with the changes this time around.
We encourage businesses to get in touch at email@example.com or 1300 328 855 if they need assistance to understand the proposed changes or if they would like to know more about the R&D Tax Incentive.
Salary Sacrifice & Mandatory Employee Superannuation Contribution Changes
Changes have taken effect from the 1st of January which affect the calculation of the mandatory employee superannuation contributions payable by employers.
Previously, salary sacrificed amounts would reduce the base upon which the mandatory 9.5% employee superannuation contributions are calculated.
The changes that took effect from the 1st of January alter this such that employee contributions must be calculated on the earnings base prior to deducting salary sacrifice amounts.
In our experience, most salary sacrifice arrangements have historically been set-up in a way that is consistent with the new rules. For those arrangements, there will be no change to the amount of employee contributions payable. However, the dissection between what are considered mandatory contributions and what are considered voluntary will change.
Salary sacrifice arrangements that are in place that calculate the employee superannuation contributions on the lower earnings base under the old rules will need to be reviewed and adjusted.
New Fair Work Information Statement
Employers are required to supply new employees with a copy of the Fair Work Information Statement as soon as practicable after the commencement of their employment. Failure to do so can expose the employer to significant penalties.
The Fair Work Ombudsman (FWO) has recently issued an updated Fair Work Information Statement. Employers must ensure that this updated statement is given to new employees.
Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Sunbury & Gisborne
Phone: 03 97444522
Sunbury Office Address: Suite 13, 33-35 Macedon Street, Sunbury, Victoria 3429, Australia
Gisborne Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437